The 2021-2023 NFT Retrospective - Chapter 4: Against the Mainstream
The 2021-2023 NFT Retrospective - Chapter 4: Against the Mainstream
The final chapter in a deep analysis of the '21-'23 NFT cycle. Let's look towards the future.
In previous chapters, we talked a lot about the madness, the excitement, and the uniqueness of the last NFT cycle. Now, we will turn our eyes to the future and suggest that there may be reason to be optimistic.
I will suggest that most of the approaches, thinking, and goals of the last cycle should be abandoned for progress towards something new: to legitimately pursue experimentation, art and culture as a serious endeavor in crypto while you do your degen activities. This is, in part, a long form rant so be wary.
Before we proceed further, let’s recap the key insights of the last three chapters:
There are likely ~650K users who spent $6.5B on NFT mints last cycle
The small number of participants spending larges amounts mean mainstream adoption was not a major driver of NFT market volume
The NFT user participation curve (high to low) follows a typical pareto rule: top ~20% drive ~80% of the volume
Crypto is difficult to leave and occupies people’s lives, driving extremely high “retention” even during the bear market
The more you spend, the more likely you are to stay in crypto / NFTs
A vast majority of the spend was in BAYC lookalike projects (IP / PFP)
Ultimately, narratives collapsed leading to disparate segments to be combined
Over-financialization was a key driver of the above with a “airdrop” style minting model offered to holders driving an unsustainable project business model (e.g. ~$400M in Otherside mint fees) as well as an increasingly exhausted holder base
There was a surprisingly high density of countless rugs, low effort projects, and middle of the road copycats that followed the leader in narrative collapse
However, there are sparks of meaning, true interest, and value that were established during this period
As we take in these facts, the question is posed… What do we do? How do we push forward towards a future that is better?
The answer is simple: We must refocus on building a culture that is adequate for the future we see in crypto.
We appear to be at the start of the next “Cycle” for crypto as I write this so now is the time to get it right.
Chapter 4: Against the Mainstream
It’s time to create a culture that takes seriously the futuristic vision of crypto
Do you take crypto seriously as a transformation of the world and society?
If yes, then why do we constantly look backwards? Why is our culture represented by NFTs that look backwards — towards retrograde cultural objects?
A Cycle Obsessed with the Approval of 2000s Era Forms
The wins of NFT’s great broader cultural moment are often seen as: a Macy’s Day parade, Eminem, a t-shirt at Old Navy, playerless digital worlds, an “art world” focused exclusively on 20+ year old formalist work, Sothebys sales, Time's Square billboards, and, of course, Access to an Exclusive Party.
On their own, these things are fine. There’s nothing wrong with using familiar, albeit culturally aged forms to draw attention to something new. I enjoy some of these things even! But maybe not every project receiving the majority of capital in the space should look and feel this way?
If I look at our list of “top” NFT projects (not platforms), this problem should be apparent…
Most of these projects are fundamentally looking backwards:
Apes = “IP Brand” — primarily showing up as Mall T-shirts, Blunt Roll brands and featured by paid celebrities of Gen X appeal
Otherside, Pixelmon, & Meebits = “Game / Metaverse” — primarily showing up as projects with no integration into any actual product or relevant broader culture; Meebits are a dupe of the more popular Roblox, Pixelmon — a rug masquerading as the most obvious brand to copy (see: Palworld), and Otherside is a (Fortnite-esque?) open world game that no one asked for.
Azuki / RTFKT = “???” — in some ways, more forward thinking, largely thanks to vagueness around what it is other than a “Brand;” however, losing their path the more “Drops” are dropped in order to keep up the financialization
VeeFriends — does the below look like the future to you?
Why am I brutally attacking all of our collective “bags?” I’m not actually. I think it is completely fine for these to be projects in the NFT world. The Janus face is a powerful metaphor, it actually gains strength by looking in both directions at once.
However, our issue is this: we gave all the money to things that are backward looking. And then we told ourselves those things are the future and celebrated having a non-marketed, generic NFT IP available at a Times Square event as a “huge win.”
Any of these brands can win big and maybe could even somehow gain scale and relevance with mainstream consumers via these things… It’s “possible” I guess. But what happens after that? We have a great brand that can live in a mall. Isn’t the mall dying? Isn’t the retail outlet completely irrelevant for the future we are going towards?
Aren’t these things already RAPIDLY being disintegrated by our actual “competition:” Fortnite, Roblox, TikTok, Instagram, OpenAI, indie games, and others?
Here’s what we are missing:
You don’t need mainstream adoption when you can already get significantly more money than a mainstream consumer can ever spend
The future of crypto is inherently tied to a digital first future — not just in “2021 style throw a QR code on a physical object” but in every aspect of how that would shape reality
The material conditions of the prior two statements create the opportunity to shape a unique and new world that can, if it chooses to, leave behind vestiges of “legitimacy”
Vampires of the Casino
We are chasing Dad’s “institutional” favor when we already have more money, power, influence than Dad. Why else would major projects take on various older B List leaders from struggling industries?
The old world is a vampire. Those who flocked to crypto first were the hungriest and closest to dying without new blood: Billboard, Sotheby’s, Macy’s, TIME magazine, and so many more.
We have more money than we know what to do with. And the number only goes up. Why wouldn’t walking corpses thirsty for capital show up to suck on the blood of the young, beautiful yet immature dude?
Would you sell your soul for five minutes on local TV? I thought you believed this was the future. Or are you fearful?
Against Mainstream Adoption
Oh… it’s all about the mainstream right? Some “exit liquidity” will be unlocked by the Old Navy Apes. I’m sorry the children buying the $10 toys will not be your exit liquidity.
Let’s dwell for a moment on the idea of mainstream adoption driving “exit liquidity.” The narrative often goes “retail is our exit liquidity, we need to be able to sell to them”
This totally misses the entire reason why crypto and NFTs are so powerful. We established earlier that there is no one in the retail CONSUMER world that actually needs to show up to “buy our bags.”
Crypto is a magical community because it is a hot ball of money falling from the sky at everyone’s doorstep. This is often ugly. This is often disturbing. It often feels unjust, but it’s a fundamentally different reality:
Money that enters crypto can come from anywhere.
Here’s the difference between the old and the new paradigm: everyone who has crypto benefits from gain in its value immediately. While there is much more complexity and it is certainly not always a good thing, this is a fundamentally different paradigm.
How did a brand new NFT market full of scams, junk, t-shirt brands, and (sometimes) strong culture destroy Sotheby’s volume in a single year? Because no one needed to beg one of five rich people for money. There are significantly more rich people throwing their money around within the ecosystem. And if you don’t like the current batch of rich people, don’t worry just wait a little bit and new ones will arrive.
It’s a bit brutal to look at it this way, but it’s important. Why does this happen? Why doesn’t this happen in the normal world? Won’t crypto eventually become more stagnant and create billionaires that dominate the space?
Maybe, but there’s a secret here. Recall our stats from earlier…
We saw that crypto retention was 70%-80% amongst heavy usage NFT wallets. I think this number will get higher in a bull market as people return to get a piece of the action, but it’s good to be conservative. And then we have our most startling face from chapter 1: more than 50% of NFT project mint fees go back into the NFT ecosystem.
Those who buy into NFTs, crypto continually put the money they receive back into the space. Yes there is always going to be some amount pulled out to live and exist in the real world, but a significant fraction bounces around the overall ecosystem.*
*Note: someone needs to do a “life of a dollar” exercise for ETH… from inception to current state tracking 1 ETH and all of the hands / transactions its involved in
Enough of the Vampiric Boomer Fantasy
A hijacked future of crypto expressed in a Coinbase ad: Maybe you too can be a Boomer if you buy Bitcoin!
Now could it all be a bubble? Of course. Is crypto necessarily the future? Who knows.
When you look at it as bouncing money, a culture that encourages you to participate, an entire world that you can stay within… you better understand why the bear market is just a temporary slow down in the activity. There really aren’t the massive “exits” you expect.
So if all of this is true, why the hell are we looking to the old path more than the future? I’m asking this question earnestly. We are focused on justifying our existence by looking to institutions that are dying. We can respect them. We can enjoy them. We can even wax nostalgic about partnering with our favorite childhood Pizza company. But we should not, we cannot be led by them.
Because their goal is simple, to take as much money as possible and have it leave the crypto space.
A billion users in crypto is bullshit. Mainstream adoption is bullshit. Being Boomer 2.0 is bullshit.
Here’s what matters:
You don’t need mainstream adoption when you have a trillion dollars.
You find a trillion dollars in destroying institutions, raiding them, forcing them to die.
Did I mention that trillion dollars is dispersed across a large group where the primary way of culturally interacting is by buying, selling, trading, and doing things with that money?
And did I mention these people aren’t leaving?
Crypto is in control.
What’s the solution? Experimentation, Culture, Art
After lecturing you on why everything that we just did was wrong, I’m not going to provide a grand solution. I think it is simple: Crypto is the ground to bring about a different culture for digital experimentation and art.
The financial components are the ground level, the miasma we breathe. It’s not new, the core thesis of all of this is a networked computer made of money.
The protocol wizardry, the technical challenges, and much more will naturally occur. We are good at this, and we should continue to be excellent in this.
We need to unstuck our money from the Boomer fantasy of 2021. This will happen naturally. The casino will suck the money out of the hands of the last 2021 Cycle Boomer without our interference.
What we need for 2024 is credible and real discourse, difficulty, debate, arguments, thought about what can be done here. And disproportionately that focus needs to be cultural. Culture that does not imitate old forms, old regimes or look for old institutional approval.
How can crypto bring about a new art world? (to steal a phrase from 113)
We can still make money. We can still trade shitcoins. We can still have fun. But…
Let’s leave some space for serious work. Let’s make sure a large amount of the capital also goes towards things that can sustain more than a year of life. Let's look and push for PROGRESSION instead of repetition.
There are so many pockets of this already brewing that it feels wrong to name only a handful as examples.
The cultures that have formed an identity that are not just hyperfinancialized will win in the long run if they remain committed to pushing the boundaries of their area of engagement. And I don’t mean to win economically… if you believe in all of this the money will come to the entire system naturally.
So does this mean we should pay attention to ArtInfluencerPunk420? No, we are not in 2021 anymore. It’s time to start thinking and stop buying. Create a culture without a singular authority to become a mouthpiece for. And god forbid you have the opportunity to become an authority — remind people not to mindlessly repeat you.
We need experts, we need boundary pushing, we need things that can produce a new canon of thinking in all domains. You have the time, you live here. Go learn things. Go take it seriously. Push.
What’s next on poof.gripe?
This is the close of my NFT 2021-2023 cycle work. As we enter into 2024 in a serious way, I’ll be starting to produce new work here in two directions:
A glossary of emerging concepts that may aid in understanding how different structural aspects of crypto may impact our ability to act in more productive ways — starting with the concept of Green Candle Brain Disease
Ongoing data and analysis on what’s actually happening as we enter different parts of the cycle