NFT projects have died one after another. We asked practitioners and diamond hands where the future is

What are the survival rules for NFT project parties? Is NFT still worth investing in? When will the market inflection point occur? With these questions in mind, PANews interviewed a number of NFT practitioners and diamond hands, and let’s listen to their views on the way out of the bear market and its future development.

Two years ago, celebrity giants entered the game, high-priced transactions appeared frequently, and NFT was all the rage. With the continuous rise in popularity and the vigorous development of diversified ecology, the overall scale of NFT has also ushered in a period of rapid growth. However, as NFT ushered in its first deep bear market, projects closed down one after another, blue-chip NFT encountered Waterloo, the crisis of trust intensified, and players rushed to flee…

Under the tragic and deserted winter, what are the survival rules for NFT project parties? Is NFT still worth investing in? When will the market inflection point occur? With these questions in mind, PANews interviewed a number of NFT practitioners and diamond hands, and let’s listen to their views on the way out of the bear market and its future development.

**The NFT market has shrunk greatly, but the time for buying bottoms has come? **

NFT is facing a sharp decline in the ecological scale, as well as the continuous loss of popularity and funds. Even the blue-chip NFT with the highest market recognition, still failed to escape the dilemma of continuous plunge. According to the data of 10 famous NFT indexes Blue-Chip-10 tracked by the data analysis platform Nansen, as of August 29, the index has fallen by about 50% year-to-date, and the highest point has fallen by about 74.8%.

Not only that, but as the market has entered a freezing point, trading enthusiasm has also cooled significantly. According to NFTGO data, in the past year, although the number of holders has increased by 56.4%, the number of NFT traders has dropped by more than 32.7%, and the number of buyers has dropped by about 48.4%. At the same time, compared to the high point, the number of traders has dropped by more than 86.2%, and the number of buyers has dropped by 84.4%.

“There will be no sign of a rebound in the market in the short term, and more and more start-up companies will not be able to sustain it, and the challenges of NFT are still in the early stages, including Web3 business is not easy to do, investment is not easy to get, and the economic situation of Web2 is also very difficult. Poor.” Sleepy, founder of Weirdo Ghost Gang, said bluntly in an interview with PANews.

Facing the big discount of NFT assets, some people choose to sell them regardless of the cost, and some people take advantage of the situation to buy the bottom. Different from paper hands who buy and sell quickly in the short term, groups such as diamond hands can often provide strong confidence to the NFT market. They are regarded as the most strategic NFT investors. Bear the risk in the middle and finally obtain higher returns.

Encrypted KOL JZ (Twitter @jzinvest_xyz) gave his own bottom-hunting strategy, such as checking the fund reserve in project judgment, analyzing and judging from the primary market public sale, secondary market model and other empowerment; For another example, it can be judged from factors such as the project’s currency issuance, the introduction of innovative gameplay, and the entry of giant whales to determine whether the price can be supported. As for the timing of bottom-hunting, in addition to considering the potential increase, you can also observe the entry strategy of giant whales. Judging from some data, these giant whales usually choose a time range instead of an accurate price. Of course, this price range also needs to be matched with market sentiment to judge the “timing”. For example, the latest SEC enforcement action believes that NFT may be unregistered securities. It also exposes NFT to regulatory risks. However, blue-chip projects are relatively expensive for ordinary retail investors, and are not suitable for bottom-hunting strategies in the price range.

"Volatility in the NFT market is normal. The best time to buy is when the blood is flowing, that is, now. But considering the volatility of the NFT market, we still need to be vigilant to avoid high-risk and excessively speculative NFTs, focusing on investment Long-term value. Only buy projects you trust, communities you like, and find projects with historical delivery performance from your past observations. As investors, you should also adjust your cognition according to market dynamics, and be wary of path dependence and over-reliance on blue-chip historical performance , Focus on the future path and work goals. At the same time, risk management is also very important.” Crypto KOL Annie (Twitter @Annie director) pointed out.

At the same time, Annie also pointed out in the interview that if NFT wants to obtain blue-chip status, it must have the potential for continuous appreciation. Sales must be substantial and the market will justify its high demand. After the current market reshuffle, blue-chip NFT also has some new inspection standards, such as: Does it have a long-term sustainable collection value? This value may be specifically reflected in the dimensions of historical trading activities, cultural attributes, collectors’ needs, art rarity, and strong fundamentals.

**How does the project party save itself under the reshuffle crisis? **

A bear market brings not only a slump in prices, but also a collapse in confidence. At a time when the prices of old blue chips are sluggish, the poor “business” of top projects such as Doodles, Azuki, and DeGods is severely damaging the trust of the community, and even questioning the narrative and value of PFP. Compared with financial losses, a general lack of confidence is fatal to market development.

Source of market performance of different types of NFT from 2022 to now: Nansen

In addition to the inaction of the project party, due to factors such as the overall downturn in the environment and poor business models, NFT has started a “shutdown wave” in recent months. Projects including Recur, Cardinal, Rentable, and Tessera have raised hundreds of thousands of dollars. After 10,000 US dollars, they still failed to withstand the test of the bear market and chose to close one after another.

Facing the test of the bear market, the NFT project MaoDao aimed at the community. KK, the founder of its acquirer Hash Global, told PANews that MaoDao is positioned as the spiritual home of the global Web3 Chinese. The word “spiritual home” sounds a bit “soft”, a bit “Empty” needs to be supported by practical things. For this reason, MaoDao hopes to support a healthy and happy community of mutual assistance and co-construction by providing good content and good entertainment activities (online and offline). At the same time, compared to other projects that introduce common mechanisms such as staking to achieve low turnover rates, MaoDao plans to achieve it through identity recognition, high-quality content output, and economic self-circulation, so that holders value community value and hold it. KK revealed that the MaoDao community will interview cat owners from time to time to talk about entrepreneurship, life, hobbies and ideals, making the MaoDao community a truly global “home” for Web3 Chinese. In addition, MaoDao will also launch fan club products based on Web3 technology in China to support the development of the community.

Weirdo Ghost Gang chose to start from the business model. This is a domestic NFT project, which received US$1.8 million in seed round financing at the beginning of this year. Sleepy told PANews that the bear market has less impact on them, because apart from obtaining this financing at the beginning of the year, they have been focusing on the Web2 business model, including the IP and fashion brand industries, so the bear market did not seriously interfere with business progress, but the bear market Under the general environment, they have further reduced the proportion of development in the Web3 field.

"The NFT project must be prepared for a protracted war, survive first, and stop thinking about the entrepreneurial path of burning financing to increase the scale and valuation, and do business first. The NFT business of Little Ghost has been in a state of delay. We hope to The bullets are played during the bull market to get the maximum benefits, and we also take advantage of the period of the bear market to constantly reflect and summarize and make adjustments to the gameplay and mechanism based on our latest knowledge and the overall ecological development of ManesLAB.” Sleepy further pointed out in the interview.

Sakuragi, the founder of AlienSwap, a multi-chain NFT trading platform, said frankly that the bear market has more positive impacts on the platform than negative ones, and building a platform that can continue to generate protocol income without fear of bulls and bears will be the confidence for a platform to survive for a long time. “If you want to achieve counter-cyclical growth, there are two main points: (1) not to be eliminated, wait for the cycle to pick up, and become a ‘survivor’ who continues to grow counter-cyclically. The bear market is cruel, reduce costs, increase efficiency, increase revenue and reduce expenditure, and live to a new round The bull market is very important; (2) solidly build infrastructure and user experience, and continue to explore more counter-cyclical growth of NFT. Therefore, in terms of infrastructure construction, AlienSwap released a gas-free trading system, creator platform, NFT Mint and LaunchPad The product breaks through the complete closed loop of multi-chain NFT creation-issue-transaction.”

And Annie gave the project side very practical suggestions from the perspective of users. These NFT projects need to start from five aspects if they want to restore the loss of community consensus and maintain competitiveness: (1) Community communication: the project side should communicate with the community Be transparent and communicate project updates, development plans, and goals to community members in a timely manner. Actively respond to community questions and concerns, and establish a good communication relationship; (2) Reward mechanism: design a reward mechanism to encourage community members to continue to participate and contribute. This can include airdrops, token rewards, 1-1 NFT, etc.; (3) Community activities: hold various community activities, such as online Space, AMA, competitions, etc., to enhance community interaction and participation; (4) Partnerships : Seek partnerships with other projects, Web2 brands or creators to expand the influence and audience of the project; (5) Expand usage: explore more uses of the project NFT, such as applications in the virtual world, in-game items, The peripherals of the real world, IP derivatives, etc., make it have more practical value.

In addition, although the prospect of PFP NFT has been questioned, Annie believes that the consensus of such projects will not change, because it is related to core social needs. “Everyone uses PFP, which has become our habit, and PFP as an avatar is also the easiest to become an emotional bond.”

The bear market will continue, and the next cycle needs a variety of narratives

While many NFT data have shrunk severely, investors are facing huge losses. According to NFTGO data, as of August 29, as many as 455,000 investors have suffered losses in the past 30 days, which is 11.5 times the number of profitable investors, which is enough to show the tragedy of the market. It can be said that the current NFT is struggling to move forward in a deep bear environment. Many interviewees also admitted in the interview that the bear market will not end easily, and that incremental users and funds, as well as diversified narratives are needed to start the next cycle, and investors will pay more attention to the long-term value of the project.

“According to historical experience, after the economic recovery, liquidity will eventually flow into the NFT sector, but I don’t think the economic recovery itself will happen within a year, so it is difficult for NFT to pick up at least within this year. In fact, recently Starbucks and McDonald’s have issued their own NFTs, and many users participated, but these new users did not drive the overall NFT price to pick up. To some extent, it is contrary to everyone’s expectations. Obviously, McDonald’s NFT holders It does not mean that you will be interested in Web3 or even participate in NFT investment transactions. However, these attempts have a positive effect on the adoption of NFT and blockchain technology, and can be regarded as the first step in user education. The demonized image of Web3 and blockchain can make people willing to join Web3 in the further future.” Sleepy said,

In this regard, Sakuragi also gave the same point of view, “The prosperity of any market is driven by incremental users and incremental funds, and the NFT ecology is the same.” But he also said that in the early stage, NFT is the outer edge of cryptocurrency. But not entirely, because the NFT ecology will carry much larger incremental users than the TOKEN ecology. Although the current market is very bearish, there are still many persistent NFT builders in the industry. Infrastructure construction and gameplay innovation are building pipelines, and a new round of NFT bull market will still come. And the NFT exploration of RWA and big IP in the real world will become the driving force for a new round of NFT bull market.

In Annie’s view, the next cycle requires new and diverse narratives, such as games, music, and education. Different types of NFT projects may become the focus at different times, triggering wave narratives. New technologies and standards will also promote changes in the NFT market, rediscover value on the asset side, and provide better interoperability, scalability, and security, thereby triggering new trends. The key to the next round of narrative explosion may lie in the secondary creative ability of the community. The project party urgently needs to demonstrate its excellent ability to build a multicultural universe, and shape a unique community ideology through multiple levels such as product, sales, and culture. So as to build a solid brand foundation. As the market gradually matures, investors and project parties may look at NFT projects more rationally, focusing on quality, practical use and long-term value, which may bring about the NFT2.0 era derived from RWA, equity and IP.

“Only when market participants, whether suppliers or demanders, truly understand the value of NFT, can the NFT market recover and reach the next high point.” KK pointed out in the interview.