NFT and the economy of attention
When to buy, when to sell NFT. Surely anyone who plays NFT has also had a lot of headaches to answer this question. Is there a mechanism or principle to help us identify effective buy/sell times? Join AntiAntiNFTs Club to learn in today's article about the economy of attention and its application to the NFT market.
What is the economy of attention?
Economics is the study of how scarce resources are allocated, be it food, housing or money. With the change of society and technology, scarce resources will also become changed. In a digital world with endless and easily accessible information, what is scarcity? That is attention.
We are only capable of paying attention to certain things at a time. Attention is limited and in an age of enormous information it becomes scarce and valuable.
Existing business models need our attention to make money and find ways to make the model more relatable. By keeping the user's attention, business models convert it into views, subscriptions, purchases or any kind of revenue. Facebook, Tiktok or Youtube all want to keep us on their platforms as much as possible, because our attention helps them make money from advertising. Brands spend a lot of money on marketing and advertising just to get our attention and convert it into revenue through sales.
Attention becomes an extremely valuable asset for businesses, they are always ready to compete with each other to get it. Naturally, we will pay attention to the most interesting and satisfying things and businesses try to create information and content in a way to attract attention.
That's how the attention economy works.
How does the economy of attention work in the NFT market?
In general, operating an NFT project is like running a business. The NFT project must promote its NFT to users, find a way to sell out and keep the value of the product.
Attention NFT projects will convert it into NFT sales, holders, community trusting and supporting the project, an increase in the floor price. Projects that do not do this well will not sell out NFTs, a decrease in holders and floor prices.
What is the project doing to get the attention of NFT players?
Each NFT project will be different in nature but in general the project will seek to convince the players of the product and the vision of the project. It could be an interesting story revolving around the NFT collection, a profitable product for players, a desirable roadmap or anything promising, etc. These things will be included. to players skillfully through various forms of marketing.
Besides, factors outside the project can also attract attention. Surely everyone who plays NFT has experienced interest in a project because there are sharks buying a lot or a certain KOL is showing a positive attitude about the project.
The above factors have attracted the attention of NFT players for the project. However, in order not to lose and maintain attention, projects will often organize events, announcements, improvements or activities for the community to keep them close to them. A project for too long without user interaction, without new updates will gradually sink into oblivion, which will directly affect the financial aspects of the NFT collection such as volume trading, floor price .
Let's look at an example of Doodles to see how the attention generated by the project has affected the price.
Doodles is a Blue-chip NFT collection on Ethereum, this project was launched in October 2021 and received a lot of attention from the community thanks to its beautiful art and the team behind are all individuals. celebrities (former member of Dapper Labs and Crypto Kitties).
At the beginning before the sale, Doodles' Discord was set to private, only those who can access Discord will receive a whitelist to mint. This way has helped Doodles create a huge FOMO in the community, everyone wants to get the whitelist. As a result, Doodles mint day was very successful, gas increased a lot at that time, floor price immediately reached a high price after minting. In just the first 2 days after sold out, the trading volume of Doodles reached 8,000 ETH, a huge number.
So after the successful sale, what did Doodles do to continue to maintain the "hype" created?
Over the next 2 months, Founder interviews and regular Twitter Space sessions helped maintain the community's interest in Doodles.
Followed by the growth of the entire NFT market in the New Year period has also worked well for Doodle. The floor price keeps hitting new highs and keeps going up because buyers hope this will continue.
However, the attention will not last forever, players begin to reduce the attention for Doodles and continue to look for the next good project. At some point, new things come along that take away all the attention.
The time when the floor price of Doodles dropped was also the time when Azuki appeared, a new breeze of the NFT market and attracted a lot of attention from the community at that time.
After that, the floor price of Doodles has recovered thanks to a number of external events as well as the launch of new Doodles products such as Space Doodles, the second collection of Doodles called Dooplicator, event NFT NYC. These have impacted the community's attention to Doodles and directly impacted the collection's floor price.
Another example is Goblintown, a very popular freemint project in May 2021. This project almost captured the full attention of the NFT community at the time. As a result, from zero and within just 2 weeks, the floor price of Goblintown peaked at 8 ETH.
The story surrounding the Goblins is ridiculous but still interesting, they create a sense of mystery and excitement for investors curious about what will happen next. There are many speculations about the founder of Goblin, who is Yuga Labs, Larva Labs or even Beeple. These things have helped GoblinTown grow extremely quickly.
Many Goblin Town spin-off projects appeared to take advantage of the crowd's response to Goblintown at the time.
However, Goblin is a prime example of a project that only created attention and fomo in the beginning, after that the project failed to hold attention. of the community. When founder information was revealed, it was not the organizations or individuals that the community had expected. To keep the community engaged, Goblintown has launched a second collection, mcgoblin. However, this did not create a positive effect in the community, the release of the 2nd collection so quickly showed that the Goblintown team seemed to just want to make money and have no long-term intentions for the project.
The community's interest began to dwindle. As time passed, the project did not have many interesting updates and information to maintain the attention of the community and resulted in a long slide and decline of the floor price.
What can we learn from this?
Community is an important aspect of the project
For a project to be successful, it needs to get a lot of player attention. The great attention is reflected in the size and activity of the community. A project that owns a large community will be able to receive large cash flows from community members. A project with a quality community that believes in the project will keep the cash flow with the project. That is why community criteria is always a very important criterion when making investment decisions in NFT.
Sell the hype
Interest will be reflected directly through the floor price so a good time to sell NFT will be the time when we feel the interest in the project is at a low level. height. The price may continue to rise but, selling when the project is receiving a lot of interest will be a reasonable and sound strategy. Besides, we can apply this much to bottom-fishing a certain NFT project, we can start buying when the attention for the project is waning.
However, not the NFT collection should catch the bottom, requiring us to learn carefully about the project, determine whether the project's roadmap, products, and future updates can be draw back the attention of the community or not.
Attention to anything will also go away because of it
Players who pay attention to the project for the money will also go away when the project no longer brings in money.
Most of the current projects only get attention in the short term, creating hype in the community right before the launch of NFT. After that, the attention paid to the project gradually decreased, the project failed to retain players. They come for the fomo will also leave when the fomo is gone.
So when investing we must clearly identify what is a short-term investment, the first is a long-term investment, don't confuse these two.
The market is in a saturation phase
With the appearance of countless projects and operating models that are almost 90% similar, the interest of players has decreased. We will usually be interested in what creates excitement and novelty, but currently the market is in the saturation phase of ideas, there are no breakthrough ideas and stories to attract more people's attention. play to the NFT market in general and projects in particular. When new ideas are born and attract the attention of players, it is likely to be the beginning of a new growth cycle for the market.
About AntiAntiNFTs Club (AANC)
AntiAntiNFTs Club (AANC) is a community of NFT collectors and investors in Vietnam. Stemming from the love for NFT AANC always wants to spread that love to everyone through building a quality community, a place that is true to our slogan "Can't help falling in love with" NFTs”.
Aug 25, 2022