Thread by @S_J_L89

@skuxxverse (SV) is effectively an @nftworldsNFT (NFTW) fund. The price should correlate perfectly to the $WRLD emissions from airdrops and rewards.

Is SV undervalued? IMO the 0.65 Eth floor is worth the potential $50.4k USD estimated projection per table 6.

Let’s dive in. 🧵

1/ Disclosure: I own 2 SV passes.

How does SV work?

SV acquires NFTW Land with the intention of distributing the $WRLD tokens back to SV pass holders. So we can fair value the pass as the present value of future $WRLD cash flows.

2/ The token distribution can be established from staking, rental, P2E gaming rewards and airdrop claims.

At 22/2/22 SV owns 27 NFTW land parcels and intends to accumulate future land using royalties from secondary sales. See holdings: 0xF78F59412c9F9cB57227a925018565A3f0CBBc9d

3/ Secondary sale royalties are currently set at 8% of which 50% of this is distributed to the community treasury.

Current sales volume is 2.3k Eth in 14 days which averages at 6.6 Eth to the treasury per day. Per below the acquisition rate is a new floor NFTW every 2.4 days.

4/ So by holding a SV pass the holder will be receiving increasing $WRLD returns in the form of airdrops. It’s an impressive strategy that is derived from a superior Metaverse play. See more on NFTW at:

https://twitter.com/S_J_L89/status/1494473594180894721?s=20&t=jY3SS_qhPZ68-TYaa2nMrg

5/ Let’s analyse this revenue generation and compare to the amount of NFTW SV can accumulate. First let’s look at the tokenomics of NFTW which can be viewed:

docs.nftworlds.com/nft-worlds-usd…

6/ Now let’s apply the above the SV underlying asset holdings assuming no further acquisitions.

7/ The number of each pass is as follows:

8/ The team have built a calculator to work out the monthly $WRLD yield, available within their discord. The following video is a useful guide to the model, which excludes future speculative $WRLD yield and limits forecasts to 6 months.

9/ The 27 NFTW is expected to increase given the SV team announcement to continue accumulating NFTW assets.

If we assumed a new NFTW addition every 2.4 days then at the end of the 5 years (1,825 days) SV would hold 787 NFTW Land parcels (760 new + 27 held).

10/ This assumes that the floor remains the same & secondary sales volume remains consistent which is unlikely to be the case.

So let’s take an arbitrary, conservative 80% discount on this projection (157 land parcels), and assume acquired evenly over the next 5 years.

11/ We therefore apply a 50% assumption on both P2E & staking rewards to get the average.

12/ Lets adjust the $WRLD per owner based on this new estimated NFTW asset holdings.

13/ The current price of $WRLD ($0.42) is expected to be the floor and benchmarking analysis price ($20.6) as the ceiling. Therefore assuming an average yield over the 5 years is worth $50.4k. This is highly speculative, but illustrates the upside potential this project can have.

14/ The project does come with its risks.

The most obvious being the success of the underlying NFTW assets and continued development / adoption.

Concentration risk is large in this project but the strategy is clear so holders should monitor the underlying performance of NFTW.

15/ Secondly the ability for the SV team to accumulate NFTW assets and generate $WRLD yield. The development of the land assets is also important to maximise the P2E yield available.

16/ Assumptions used are my own and will differ from the SV team calculations.

The above calculations have also excluded time value of money / discounting the cashflows so as to keep it simplistic.

17/ The royalty rates are expected to remain constant With a 50:50 split between team and treasury.

Floor price and volume have been estimated to remain consistent on average and an arbitrary 80% discount applied to achieve a conservative estimated NFTW land holding projection.

18/ I have not explicitly considered renting yields in the above calculations, although it can be implicitly assumed based on the total available tokens.

19/ My view is closely linked to the NFTW thread with a target price of $WRLD of $20.6 USD.

Hence IMO the current floor price of 0.65 ETH ($1,637 USD) is more than worth the potential average yield of $50.4k (assumed evenly over a 5 year period).

20/ An alternative investment is to purchase the $WRLD tokens at a current price of $0.42c using the $1,637 USD (0.65 Eth) and hold those 3,898 tokens.

This also has better liquidity and a known number of $WRLD tokens held up front at a potential opportunity cost of 896 $WRLD.

21/ You can also compare the price of a floor NFTW to the SV pass to assess the better priced option based on future $WRLD token forecasts:

22/ IMO the SV pass current price of 0.65 Eth better reflects the current FV of future $WRLD distributions. The NFTW Floor price should be closer to 49 Eth. Once adjusted this should be a better FV reflection.

https://twitter.com/S_J_L89/status/1494473607246151682?s=20&t=FdGZdA3RbK89tG1aMI8fBw

23/ The NFTW also requires a lot more capital to purchase, whereas SV provides exposure for a smaller investment.

What would your NFTW exposure investment strategy be?