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21 Feb, 19 tweets, 8 min read
.@nonfungibles dropped an amazing NFT 2020 report recently and I want to highly some of the awesome charts along with some personal commentary.

A long (but worth it if you’re just scrolling anyway) thread on what you need to know about the current state of NFTs.

1/
2/The overall Ethereum NFT (ERC 721s only) market capitalization currently sits around $338 million and IMO will easily double if not quadruple in 2021.

Note: this just includes NFTs by project and doesn’t include tokens of NFT projects or NFT marketplaces like AXS, RARI, etc.
3/Metaverses account for the most sales likely because they have the largest TAM while Art and Gaming come in 2nd and 3rd.

Each category of NFTs has 1-2 projects that make up a large portion of volume. Let’s breakdown some of these categories with Nonfungible and other data.
3/ 1. Art – The breakout use case with a clear product-market fit for artists (aka royalties).

Total crypto art sales have surpassed $120 million with Nifty Gateway and SuperRare accounting for most of the volume.

More on SuperRare: messari.io/article/the-cu…
4/ It doesn't appear that art collectors value one brand over others yet. Wallet interaction between art platforms like Aysnc Art, SuperRare, and KnownOrigin are all very high meaning collectors/artists explore multiple platforms.

But, I expect brand to matter in the future.
5/ However new NFT art platforms like Zora and Foundation are building strong brands and have growing volumes.

I expect continued growth in crypto art as it grows more mainstream. Expect some major artists to issue their first NFTs in 2021 and for there to be strong demand.
6/ If you want to collect art that's awesome, but being an art collector is challenging and historically the best collectors buy lots of pieces across various artists and genres.
messari.io/article/the-ps…
7/ 2. Gaming – Axie Infinity is a breakout game. Gods Unchained still remains strong with MegaCryptoPolis taking 3rd.

Gaming has yet to fully take off largely because of technical challenges and two of the above projects have their own sidechains(Axie and ImmutableX).
8/ However, gaming has the potential to be one of the largest markets and already accounts for the largest number/quantity of sales of NFTs. If we included ERC 1155 I imagine it would be even greater because of @enjin.

Once gaming takes off, NFTS are going to truly explode.
9/ 3. Metaverses

Virtual worlds - with digital property and free markets - will transform our existing digital worlds into vibrant communities governed by their users.
10/ Surprisingly, virtual LAND is one of the most liquid NFT categories ( I wouldn't have guessed this).

This goes to show the strong speculative fervor around metaverses and the potential of having ownership in digital worlds that millions of people will eventually frequent.
11/ Metaverses as a category account for over a third of all NFT sales activity in 2020.

Investors have spent nearly $55 million on metaverse digital land and in-game items.messari.io/article/metave…
12/ 4. Sports – Sorare and F1-Delta ($REVV) are the top sports games on Ethereum while NBA Top Shots remains the top sports collectible across all NFT ecosystems.
13/ Crypto sports games have started to gain a lot of traction and are a mainstream application that will eventually bring millions of consumers into crypto. messari.io/article/fantas…
14/ 5. Collectibles – Cryptopunks, CryptoKitties, & Hashmasks are the most valued collectibles.

Note: Hashmasks ($30 million in sales to date) aren't included because they didn't launch until a few weeks ago 🤯

Hashmask will overtake CryptoKitties in all-time volume today!
15/ There are great returns to be found in collectibles and unique pieces, however, picking winners in the collectibles space is challenging and costly.

But, if you’ve got the eye or cash to commission pieces, then you can be successful.
messari.io/article/the-ar…
16/ Overall, the NFT landscape is going to grow drastically as the infrastructure builds over the next 1-3 years.

Layer 2s will scale some of these games.

Flow and NBA Top Shots are on a mission to dominate the NFT space ($120m Sales and counting).
17/ I'm also super excited about DeFi <> NFT applications like:
• @NFTX_
• @nftfi
• @NIFTEXdotcom
• @UpshotHQ
• @NFTbank_ai

The NFT liquidity space is going to explode over the next two years and will be an amazing opportunity for growth and financialization of NFTs.
Fin/ Thanks for reading and be sure to check out Nonfungible's full report: nonfungible.com/nft-report-202…

Also, check out some of our in-depth NFT reports and research pieces on messari.io

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More from @masonnystrom

Mason Nystrom Profile picture
19 Feb
There’s a problem with how content (songs, blogs, artwork, etc) is valued on the internet.

I call this the Davy Greenberg Dilemma 🧵
The crux of the Davy Greenberg Dilemma is two-fold:

1️⃣Creators sell their early work at a discount to the future value (e.g. Once an artist is famous their work is worth more but they don't get any upside on their prior work)
2️⃣ Good content doesn’t scale and faces power laws where 1 piece outperforms 99% of all the other creations but often this content is equally valued (e.g. a Substack/Patreon/Spotify Podcast subscription values most content equally)
Read 5 tweets
Mason Nystrom Profile picture
16 Feb
The next evolution of content platforms is starting.

Using crypto primitives – like NFTs, permissionless protocols, programmable royalties – content creators are set to control the next era of content – The Ownership Era.

A quick thread on the eras of content 👇
“Content is where I expect much of the real money will be made on the Internet, just as it was in broadcasting.” - Bill Gates
messari.io/article/the-ev…
The Distribution Era

The key value in this era for consumers was aggregation while creators received wide distribution of their content(e.g. songs). However, as users realized that their content had value, beyond views and likes, individuals started to create their own brands.
Read 6 tweets
Mason Nystrom Profile picture
9 Feb
What is Web3?

Web3 is a shift in internet culture.

Empowered by new technologies, the Web3 movement is spearheaded by a shift in how we, the collective, view and value the Internet.

1/
In a one-liner – it’s the next era of the Internet. Web3 is a paradigm shift towards a more democratized Internet – an Internet that is governed by the collective rather than by corporations and special interests.
messari.io/article/web3-e…
Web3 is about rearchitecting internet services and products so that they benefit people rather than entities.

The Web3 world is one that has open-source protocols at the foundation while businesses act as interfaces that provide convenient access and additional features.
Read 6 tweets
Mason Nystrom Profile picture
6 Feb
Governance tokens represent the power to change the rules of the system.

As cryptonetworks grow the value of governing that resource also increases.

Some thoughts on the importance of governance and how the value changes over time. 🧵

1/
2/ Governance tokens typically accrue value in a few ways
• Draw cash flows or fees from the protocol
• Determine protocol incentives and parameters (e.g.
setting inflation/rewards)
• Control key assets on a network (i.e. algorithms, capital, other utility value)
3/ There’s clear value in governance, but, there are currently no clear predictive models for pricing governance tokens without cash flows. It's especially hard to value governance in early networks.

Governance largely holds intangible value, which is hard to accurately price.
Read 7 tweets
Mason Nystrom Profile picture
1 Feb
Web3 – the decentralized internet – requires democratizing many of the existing services and infrastructure.

Key services include:
• Web Hosting and Data Storage
• Domain Name System
• Internet Access

A thread on the protocols creating Web3👇🏻👇🏻👇🏻
messari.io/article/the-or…
In this piece, I examine the existing challenges to decentralizing the internet and specifically the Internet Infrastructure Stack.

Continue in the thread as I briefly review the existing services and protocols tackling these issues, or jump to the piece for the full story.
1. Data storage and web hosting are vital services for companies.

AWS is the elephant in the room, accounting for about 32% of the market. Beyond the concentration, once AWS revokes hosting services other cloud and storage providers are also likely to reject the entity/website.
Read 16 tweets
Mason Nystrom Profile picture
22 Jan
Investing like a venture capitalist in crypto has never been easier.

The world of investing in open-source software means public portfolios.

Beyond investors advocating for their projects, their portfolios and active participation strategies can be tracked on-chain.
At a glance, @placeholdervc is one of the largest portfolios tracked on Nansen with over $55 million in tokens.

Many of Placeholder's investments have performed well especially, numeraire ($NMR) since Placeholder invested in NMR in both Mar 2019 and Jun 2020.
The era of on-chain portfolios is only beginning.

As more data becomes available, funds will likely start to make their portfolios more available in order to control their investment narrative and participate in crypto communities.

messari.io/article/invest…
Read 5 tweets

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