Thread by @zelicious_z

[1/31] @psychedelic_nft I’m bullish on PA and the DE announcement. In fact, it might have been the best case scenario I could have wanted. That probably sounds provocative, given the range of reactions we’ve seen on Twitter and Discord. Let me explain…

A mega-🧵…

[2/31] First off, some table stakes: I’m a long-term, buy&hold investor. Stocks, real estate, crypto, NFTs. If you’re a flipper / day trader - that’s cool, it’s just not for me (day job and all). Y’all probably have a different lens here, so this take probably isn’t for you.

[3/31] What I do love is open discourse. Opinions welcomed, far and wide. We don’t want an echo chamber - that can lead you into making biased decisions. But that said, respect and empathy are key. Be kind, accept others might feel otherwise, and keep the heat on low.

[4/31] So let’s get into it. Why am I bullish on DE, the future of PA, and @VolturaLabs in general? Let’s start with a summary of my investment thesis, run through the potential upside, and then talk about the risks (no investment is risk free frens!)

[5/31] My PA thesis: mental health awareness is undergoing a major macro trend change, thanks to a host of global, societal, and generational drivers.

1) Global drivers include health crises like the pandemic, ecosystem impacts from climate change, and international conflict.

[6/31]
2)Societal drivers include gun violence, wealth gaps, racial inequality, culture wars, and growing extremism online.

3) Generational drivers include greater acceptance and self-awareness of mental health as a critical component of happiness for rising Gen Z’ers.

[7/31] More than recent generations before it - Gen Z members are more likely to feel stress, be aware of stress, and seek treatment from mental health professionals.

cf: apa.org/monitor/2019/0…
cf: forbes.com/sites/danabrow…

[7/31] This rising generation is aware of the importance of mental health, and are shaping the future of benefits offered by employers: “nearly all (92%) [of students] said companies should offer mental health or emotional health benefits.”

cf: timely.md/catch-2022-col…

[7/31] These are mobile phone natives, with new opinions on what care looks like, and how to receive it. “Gen Z wants to take care of their health on their own terms. And that may just include video chatting with a doctor from the back of an Uber.”

cf: harvardpilgrim.org/hapiguide/the-…

[8/31] So we have the right combination of global, societal, and generational factors coming together. What does the market opportunity look like? One forecaster sees the behavioral health market in the US alone hitting $132B by 2027 (CAGR of 5.3%).

cf: biospace.com/article/u-s-be…

[9/31] Others forecast the global mental health market to hit nearly $538B by 2030, with large growth coming from Asia-Pacific due to increases in awareness, infrastructure development, and increased access.

cf: alliedmarketresearch.com/mental-health-…

[10/31] So what does all of this tell me?
– Mental health is a growing problem across the globe
– The rising generation is more aware, and seeking access for more mental health options
– An updated approach to treatment could be a strong web3 cultural/product-market-fit

[11/31] This is why I first invested in PA. I believe the market opportunity for mental health services represents strong growth potential that is aligned with global trends, and I see a particularly acute need in the web3 space.

Bonus: maybe we can actually help people too. 🤗

[12/31] And we haven’t even covered the whole psychedelics part, with exciting new potential coming from a more open-minded regulatory approach to nature’s original mental health treatments.

I keep this upside out of my calculus though, given the risks and uncertainty.

[13/31] So that is PA - but what about Divine Entities / DE MP? When @BAYC2745 first dropped the DE mega-thread, reactions were all over the chart. I saw a lot of enthusiasm, a lot of questions, and quite a few who immediately started flooring their collections. Let’s peel the🧅

[14/31] My take: DE, in a nutshell, is a marketplace for NFT traits. It will allow collectors to buy or sell traits, for creators to engage with their communities, and provide a utility-driven platform for the exchange of $PSY into assets (that can be priced in other cryptos).

[15/31] The pivot towards building a marketplace instead of another NFT collection is risky - but the potential ROI is very high. IMO, it comes down to three key things:
1) There is demand for customization
2) DE can execute faster than the competition
3) DE can win market share

[16/31] Why very high potential? This move is a classic from the platform strategy playbook. A 2-sided marketplace can generate tremendous flywheel effects - where more demand encourages more supply, and vice-versa, with compounding growth effects.

cf: linkedin.com/pulse/marketpl…

[17/31] This is one of the top strategies in Silicon Valley - where I’ve spent the past decade+ of my career building tech products.

Eg: Apple & Google’s app stores. Amazon & Ebay marketplaces. Uber & Lyft. AirBnB & VRBO. DoorDash & Instacart. OpenSea. All 2(+)-sided platforms.

[18/31] The idea, in many ways, is simple: build the right platform, where owners and developers can bring assets to the market that buyers want, and drive innovation to help all parties generate more revenue and more utility from iterations in the marketplace.

[19/31] So what are the risks?

First is product-market fit. I’ve seen a lot of posts lately with folks saying: “I don’t want to customize my NFT, I like the random rolls.”

While that is a fine opinion, it doesn’t really tell you what the broader market wants.

[20/31] In many of my conversations with NFT collectors, it is not uncommon to see buyers step up to levels above floor prices to secure a specific trait, look, or feel that speaks to them - be it a mask, pin, or zipper.

If a market was available, would they pay to customize?

[21/31] Second is execution.

NFT customization is not a far-fetched idea, when you consider the vials and serums already out there. To the best of my knowledge, something as ambitious as DE hasn’t been done yet - but the competition is well armed…

techcrunch.com/2022/01/04/nft…

[22/31] 1st mover advantage is very real in this space, and whoever lands a fully featured customization platform stands to command a sizable share of the market (this likely explains the secrecy behind DE)

A key risk: is a trait marketplace and a coaching app too much at once?

[23/31] Finally, winning market share. The early days of a platform can be incredibly challenging. You need to bootstrap growth, convincing developers or sellers to use the platform to list items before the buyers and the track record has arrived.

[24/31] Think AirBnB - you won’t bother searching there if there aren’t enough listings, and owners won't list if guests aren’t searching. This is where the web3 accelerator program and @ezu_xyz come into play. These projects, along with PA, are the foundational trait supply.

[25/31] And when it comes to @ezu_xyz, the last thing any PA holder should want is a similarly themed collection. If you want DE to succeed, it needs a diverse audience of buyers and sellers - just like OS. The goal is volume - not uniformity in taste, look, or vibe.

[26/31] The most exciting part for me as an investor is DE MP: the opportunity to participate in the success of the platform. The long-term value of PSY revenue sharing from the marketplace’s transactions is more attractive than any short-term floor movement. Oh, and free mints.

[27/31] So this is the wager:
1) For PA, that @BAYC2745 and team can build a mental health coaching app that gains adoption and market share
2) For DE, that @BAYC2745 and team can bootstrap a marketplace in an unproven growth area of NFTs faster than most (>1 platform will exist)

[28/31] When investing I look for two key things: people/teams with proven track records, and products that capture market share in emerging trends. PA and DE check those boxes for me personally.

Once I invest, I don’t stress over daily floor prices. But there is always risk…

[29/31] It all comes down to:
1) Product market fit
2) Execution
3)Competition

Investing in anything is about assessing the upside, assessing the risk, and making a calculated decision. It really isn’t just wen lambo. The biggest multi-baggers take time.

[30/31] If you decide this project isn’t for you - that is fine, and I applaud your decisiveness. But everyone has their own risk calculus, so if you’re out, respect the fact that others are still in.

No need to burn any bridges on the way out - WAGMI after all.

[31/31] If you made it this far, I owe you a beer.

What did I get right? What did I get wrong? LMK your thoughts!

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