NFTs: The Power Of Narrative

This post will be focused on dissecting what convinced me to buy a Bored Ape.

NFTs: The Power Of Narrative

Introduction

I'll be upfront. I'm a relative newcomer to the NFT space. I've spent much more time in the world of Liquidity Pools and staking than I have in the world of punks and kitties. This post will be focused on dissecting what convinced me to buy a Bored Ape.

Background

Before I start, it's important you understand a little about me. I am notoriously frugal. It's not my fault - I was raised this way. My mom was the type of woman who would brag about her latest discounted score, savoring each percentage off. This is why it should surprise you (it surprised me!) when I decided to drop $800 on a virtual ape (#1248 in particular).

Bored Ape #1248

Dollar and Cents

When I entered crypto, I was all about dollar and cents, I still am, but I used to be too. - Anon

⚠️ NFTs are a risky investment and you should only put in the money you're comfortable with losing. The NFT market is unforgiving and you could be left with worthless, illiquid NFTs.⚠️️

☝️ Did you see that warning? Just making sure.

If you're thinking that NFTs are easy flips and that "you only need to be lucky a couple times to make it", you're not going to make it. Flipping NFTs is a mixture of luck, foresight, and what we're going to be focusing on for today, narrative.

Historical Narrative

Cryptopunk #7523 - Sold for $11.8 million at Sotheby’s

If you walked up to a random man on the street with a photo of this and asked him for $100 he would laugh in your face and continue on with his day. Yet, when it is brought out for art collectors at a renown auction house it sells for $11.8 million.

Why?

Narrative.

The current narrative I am hearing about Cryptopunks is that it has value by virtue of birthright because it was the first NFT project launched on Ethereum. NFTs are being used by artists to enter in a market place the world has never seen before. NFTs allow artists to interact with fans and to create art pieces that are 100% verified to be the original. Imagine if this NFT thing is not a fad. Imagine if NFTs are truly a new paradigm for art and opens the world up for a renaissance in art and culture. Then imagine we go 250 years in the future. How much is the very first NFT worth now?

...I don't know!

Community-as-a-service Narrative

Not every project can be the very first NFT project ever. This means that not every project can ride off of the "historical" narrative. There's a lot to dissect about Bored Ape Yacht Club (BAYC) so I'm not going to be able to cover all of that today. Today I'll be going over the Community-as-a-service(CAAS) narrative and how it is changing the way NFTs are being priced.

What's CAAS all about? CAAS revolves around the idea that as more "high profile" people start to join a community the floor price rises as more people want to be part of the same community. This is why you may be seeing tweets about artists, rappers, and business directors joining BAYC.

Why? So you can both own expensive monkeys?

Yes, so you can both own expensive monkeys.

It is like noticing that another person has shirt from the same obscure band you liked except you knew that in order to have obtained that shirt you either came in early or paid a hefty fee.

Surprisingly, these apes can be used as immediate ice breakers to any other ape in the community. For example, a marketing director at a well known app company had an ape profile picture and I dm'd him asking his thoughts about BAYC and his predictions regarding the future of marketing and online avatars. I was able to get a little bit of his time when in the real life I would've never had that chance.

So instead of asking, "how much would you be willing to pay for this photo of an ape?", ask instead "how much would you be willing to pay to have access to this select community?". "Yacht Club" may not be as far off as it appears. Exclusivity costs.

How much is the ape worth now?

...I don't know!

Bored Ape #1248

Conclusion

I purchased my ape for .4ETH which was worth approximately $800 at the time. As of the time of this writing, the floor is 2.6ETH. The narrative of CAAS is what led me to investing and holding onto my ape. NFTs are kinda what you make them. Some decide they are historical artifacts, some view them as membership ID cards. Whichever narrative you take, make sure you believe in them. Trading NFTs for beginners can lead to some disatrious conclusions.

Pay for the community, stay for the opportunity.

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