Thread by @TimBaldwin_

I've seen a huge shift in sentiment towards NFTs on twitter lately. Even notable #NFT shillers like @NFTsAreNice are starting to wake up to the fact that "community" is just a buzzword

Here is what has lead to the downfall of NFTs and what you can learn from it to benefit ur biz

FOMO

Crypto and FOMO are best friends. The largest driving factor of asset growth is dreamers. Dreamers are retail investors who mistakenly make trades off of "breaking news"
News Flash: If your favorite twitter personality or analytics site lists an NFT as trending its 2 late

Why is this? Surely the twitter influencers who have amassed a huge following are adept at finding trends before others.
Here is a little secret:
They have access to the same tools as you. They use the same analytics sites as you.

let's dive into the differences

NFTs, like Venture Capital, is a game of informed gambling.
You can think of successful NFT traders as small funds. The difference between you and them is an abundance of capital.
During the rise of @goblintownwtf I was determined to find the secret that #goblintown used to moon

There was no secret. I dove into thousands of txs trying my hardest to find out which alpha groups were responsible for making a useless art project grow exponentially. What I found was that there were no alpha groups supporting #Goblintown until the fomo kicked in.
Who minted?

I traced a couple ENS names back to twitter and slid in their DMs. These people had minted a ton of Goblins very early. What did they know that the masses didnt?

Nothing. They didn't know it was going to moon. They didn't have a friend at Opensea tipping them off.

Instead they had a very simple strategy that can't be replicated unless you are sitting on a small fortune.

Here it is:
They minted everything.

The people I interviewed

1. Watched @nansen_ai for mints that were blowing up
2. Rolled their dice and minted

So this is the basis of the #freemint meta. Large accounts risking little up front capital. Minting large amounts of NFTs then taking profit where they see fit, generally small sales on the way up.

Next they used the fomo to cash out.

Here is how

So at this point the collection is minted out
Buzzz is appearing on twitter. Analytics sites now have the collections trending due to the fact it minted out. Now this where a lot of NFT collections die. This is where you lose money. Even the influencers.

The smart money is already in. Their shotgun method has given them access to the supply of the collection.

You, the smart NFT trader see this trending collection and decide to purchase. You're thinking "So much upside, its only .1 floor. Cant wait to sell at 1 eth!"

You are wrong. It won't get there. Most of the time it will climb a little just because it is now in front of the exit liquidity's face, but you have to remember those people from the beginning are already planning their exit.

It is just too late.

So how has this affected Lebron James legacy?

Makes profits impossible to realize. You are buying a fairytale that each JPEG you buy has a chance to go to thousands of dollars. However, if you are purchasing NFTs using analytics sites then you are just too late.

NFTs are similar to dex arbitrage. In dex arbitrage genius coders spend their time writing efficient contracts to collect miniscule amounts of $eth multiple times a day.

I can promise you that these same geniuses are writing contracts that will genuinely scalp any nft profit

And no they aren't buying rare jpegs for cheap. They are just minting everything they can get their hands on. Then selling on the way up. This is why it takes such a significant amount of capital to break through sell walls. (more sells will be added if more capital comes in)

So you add capital to a project and it will get taken.
You might say "Tim this project has 8000 unique minters, no way one person controls price"

Do you know how easy it is to generate 8000 wallets?
Boom your NFT project is just going to lose money.

Oh yeah forgot to mention

So yes FOMO is killing NFTs because participating in FOMO is literally handing your money to someone else. Someone smarter.
Keep consuming moon stories like BAYC, CC, Goblins. They are just that, moon stories. Fairytales that keep you coming back.

So what do you do?

Only one thing you can do. Be smarter. Spend time in the data. Amass enough capital to adopt the shotgun method. Also think like a project founder. Ask yourself am I buying something worth selling?

Little tip, art projects aren't worth selling so they eventually just crash and fail.

Ok I'm done. Not sure if I helped at all, but this is just a collection of thoughts I have had during my hours of pouring over defi data the last couple of weeks.