NFT Roundtable | Out on Open Editions?
Welcome to the Weekly NFT Roundtable, where members of the Lucky Trader team weigh in on some of the most pressing questions, news, and events in the web3 space.
This week, we're talking about the success of Yuga Labs' Dookey Dash, Doodles heading to Flow, Memes by 6529, and IRL NFT conferences.
The commentary below is purely opinion —not financial advice!
Over Open Editions 😑
Question 1: Open Editions have been all the rage over the past few weeks, but the market is starting to see some fatigue. Has the OE Meta already ended? Are there any specifically that you see retaining long-term value?
Jason: With all NFT collections, there is some long-term value for open editions that innovate and build strong communities. Short-term, however, open editions are designed to find the lowest possible price within a set amount of time a community is willing to pay. I’ve seen interesting burn and mint mechanics that deserve praise for the gamification of the collection’s size, but ultimately, open edition mints are a cheaper alternative to collecting an already-famous artist, not a money-making casino.
Whenever the main argument for minting or buying an NFT is “price is going up a lot” with no why in sight, time to sell. Oh, and scarcity + demand = value, and when a collection is missing one or the other, look out below.
Ghost: As much as people like to say it’s about the art, I believe a lot of this hype cycle has been driven by speculators/gamblers — and while that was fine for the low-cost/free OEs, minting prices have started to creep up.
However, I think there are a few that have broken through the noise and could get ‘ingrained’ into the culture — Checks by Jack Butcher and Proceed With Caution by DesLucrece. Both have innovative plans for burns and have seemed to cross into cultural relevance more than the average one-off OE.
Logan: It will quickly become clear which artists overpromised some elaborate plan to capitalize on the Open Editon meta, which artists produced good art for the sake of good art, and which artists lean into something innovative and fun with the newfound ease in dispatching burn mechanics. I think the artists in the latter two categories have a chance at long-term success. But otherwise, expect most to be collectibles with very little financial value.
Tyler: Jason nailed this one. The primary reason to buy an open edition is its lowest price of entry to an artist’s work. The market got way overheated after some success in the past few months with artists leveraging interesting burn-to-redeem mechanisms, but that bubble seems to have burst (financially). I think we topped this week, and this meta will fizzle out in the near future.
Gamers Entering the Sewers 🎮
Question 2: Question 2: Dookey Dash saw a professional Fortnite player at the top of the leaderboard this weekend, with Mongraal (12M followers across social channels) leading the way on his own Sewer Pass. Are you bullish or bearish on professional gamers entering the space via Dookey Dash?
Jason: I’m bullish on professional gamers entering the NFT space, but not because it is going to lead to a surge in floor prices (though, it might). It makes any play-to-earn appeal basically nonexistent and forces projects to focus on making the game fun.
You’re not going to beat Mongraal at online gaming, so if the appeal of the game is to win and make money, there is no appeal for non-professional gamers when Mongraal decides to play. But if the appeal of the game is that it’s fun, professionals can help build a community of dedicated gamers that just play to play (the way it should be). If money is made along the way and rewards those who put in the most time and add the most value to the community, great. But it all starts with a fun game, and we haven’t seen too much of that just yet.
Ghost: Things you love to see — this. Not only does Mongraal have a huge following, but playing on his own pass vs. some of the mercenary-type hired guns we’ve seen play for other accounts is awesome. Remember, the overall sentiment from gamers regarding NFTs was insanely negative — so anything that helps break down that barrier is bullish. It’s also been reported that he has made $300K from his professional gaming — and I’d imagine the Doo-Key top prize will be worth a hefty sum that will grab attention and headlines.
Logan: Bullish. Real gamers playing web3 games... why wouldn’t you want that? The best are always going to gravitate towards areas of financial upside, and this was ripe for intervention. If Mongraal likes Dookey Dash, and then he tells his gamer friends, and then his gamer friends tell their gamer friends, and then those gamer friends tell other gamers, we might get a few more people playing web3 games. And hell, maybe these real gamers will help consult on and build real, playable games? I don’t know.
Tyler: Max bullish, full send. This is how we onboard the gaming masses into NFTs, through pro gamers' Twitch feeds. And if they can win big prizes, that will speed adoption up even faster. I tried to come up with a bearish take on this and I just could not. Yuga nailed it with this one - they built a fun game, which attracted legitimate pro gamers, and they are in the driver’s set in the gaming NFT space now.
Sorare Surging ⚽️
Question 3: Let’s talk Sorare — which announced a major partnership with the English Premier League this week and is quietly dominating the ‘fantasy sports’ NFT space at the moment. 1. Are you playing, and 2. Are you buying or selling this as an onboarding outlet for the space as a whole?
Jason: I’m still not playing Sorare. I hope that Lucky Trader’s onboarding tools will eventually convince me that the process isn’t as daunting as it seems, but the learning curve is still a pretty big time-suck to do it right. I just haven’t had the time. For that reason, I’m also not buying that this is an onboarding outlet for the space as a whole… yet.
Ghost: Playing (shameless plug for our Sorare NBA Primer, the LT League, and the Team Hold! Live Before Lock Stream). As someone who got into NFTs in January 2021 through NBA Top Shot, sports collectibles are right in my wheelhouse. Sorare has built a super fun product — and I’ve been watching more basketball than ever as a result.
The structure is a super-happy medium between the rigors of DFS and more traditional season-long fantasy — and you don’t really need to know anything about crypto or NFTs to start playing. With Sorare finally landing the Premier League this week, I’m curious to see if they tackle the ultimate frontier for US fantasy sports — the NFL — at some point.
Logan: PLAYING. And if you’re not playing Sorare NBA, what are you waiting for? In my eyes, Sorare overcomes a lot of hurdles that other “utility” NFT or web3 projects cannot. 1) It’s easy to join. 2) There is OPTIONALITY with regard to the use of cryptocurrency. It’s not required. 3) Fantasy sports are a familiar concept, one that is universally enjoyed. Now you’re adding in the most popular sporting league in the world? Yeah - I’m buying it as an onboarding opportunity.
Tyler: I’m not playing and I’m not particularly bullish on Sorare or the broader fantasy sports NFT market being an onboarding arm for broader NFTs. Sorare has been crushing it, to be clear. But the crowd playing on Sorare does not care about broader NFTs or digital collectibles in my opinion; they are just a means to an end. The Top Shot onboarding already happened and I don’t see that mass onboarding event happening again, from this sector.
Royalties Re-Emerge 💸
Question 4: Royalties are again in the headlines, with Blur finding a way to circumvent OpenSea’s attempts to block trading on certain collections in the battle for marketplace supremacy. What’s your take on the current royalty situation? Is this good, bad, or indifferent for consumers?
Jason: I’m ultimately indifferent because tech will continue to advance and the market will figure itself out. People will always get around paying royalties, and without strong centralized control of the NFT market (which hopefully will not happen), creators have to live with that.
The focus should be on teaching people why paying royalties is fair and important. There needs to be experimentation with pay-what-you-want models for royalties. The person who makes $10,000 on a picture of a cartoon cat is way more likely to be okay with paying $1,000 in royalties on the sale. The person who buys at $10,000 and sells at $5,000 is upset at the fee, perhaps justifiably so. And as NFTs get more or less expensive, standard 5-10 percent markers make less or more sense. Paying 5 percent on $100 is a lot different than paying 5 percent on $100,000.
Many have experimented with pay-what-you-want outside of web3, including one Radiohead album, Wikipedia, and even Panera Bread a few years ago. The conversation surrounding royalties needs to remain open for debate and creative solutions will follow. Taking a hard stance at this point in time and committing to a dictator-esk royalty requirement without exhausting fairer, more nuanced positions is unwise.
Ghost: I was happy to not hear about the royalty conversation for a bit, and not thrilled that it’s come back into the forefront. I am happy to pay royalties for projects that had set them / blocked alternatives like Blur — but also happy to not pay them when that option exists. I think creator royalties were one of the best attractors of the space for artists, so I hope that continues to be a viable format in some capacity going forward. But until an ultimate solution is reached, it’s going to continue to be a race to the bottom as marketplaces battle for users.
Logan: I’m conflicted and probably indifferent, but I think the consumers are going to be the winners overall. Just today we saw a notable decrease in creator royalties on Memeland’s NFTs, significantly impacting the trade viability and margins when trading NFTs. It will depend on the demographic you focus on, but the “royalties to zero” trend will help consumers first. On the other hand, the lack of royalties may be an impetus to new collections and greater supply, ultimately impacting floor prices to a great enough magnitude that it counteracts the royalty decreases. SO MUCH COULD HAPPEN, I DON’T KNOW.
Tyler: Putting the royalty situation aside (and dodging the question), my primary takeaway is that Blur is here to stay. I’ve become much more bullish on the airdrop coming in a few weeks, and I think they will have legitimate staying power beyond this airdrop farming window. Blur is going to keep fighting OpenSea, and this competition will benefit us. Very bullish Blur.
Meet the Roundtable:
Ghost: Ghost is an NFT analyst at Lucky Trader. He has been in crypto since 2017, and entered the NFT space via NBA Top Shot in January of 2021 before minting Bored Apes and degenning into the broader market.
Tyler: Tyler is a high-volume NFT trader, having reached the top 100 in NFT sales revenue using NFTBank’s rankings, a Pengu maxi (in Luca we trust), and a writer for Lucky Trader. Tyler’s writing spans market analysis, news breakdowns, project ecosystem overviews, and web3 opinion pieces.
Logie: Logan is a content lead at Lucky Trader and is best known for selling every good NFT far too early. He also maintains an irrational exuberance for clay-based NFTs.
Jason: Jason is an NFT lead at Lucky Trader. He has been involved in the NFT space since CryptoKitties in late 2017, and, like most, he lost a lot of money on Top Shot in early 2021. But nevertheless, he persists (with his Series 1 Legendary From The Top LeBron James Block).