Why community is the most important evaluation metric for any NFT project
I’ve always thought I understood the definition of a community.
Community, /kəˈmjuːnɪti/ (noun):
A term to define a group of like-minded people, I suppose. Pretty straight forward right? Let’s think again.
My first conception of NFT Communities is around Art NFTs. As artists take their works onto NFTs, it’s important for them to already have an audience who would be willing to pay dollars for their art. Therein I deduced that successful NFT artists must either:
While it is a logical deduction, it’s an oversimplification that has failed to capture the nuances of a community.
Consider a traditional art gallery with exhibits from niche artists. The people who show up at the gallery are likely to be: the artists themselves, their friends and families (supporters), or art appreciators. During the exhibition, these participants get to interact with one another and meet fellow like-minded artists or collectors who speak the same language. Therein, a community arises from these organic interactions.
Given that NFT arts are virtual, how would these interactions occur? The answer lies in the typical NFT marketing channels: Twitter, and Discord.
Through Twitter, users are encouraged to Reply, Retweet, and tag one another. They can make use of hashtags like #artistupportsartist or #apesupportsape to reach out to the like-minded group of people. Through Discord, members can discuss, interact, and give ideas to the artists or even amongst themselves. That is the basis of communities in NFTs.
For NFT projects, they succeed not solely because of their aesthetics or utility. They succeed because of their communities, which is why it’s my number one metric. Let me illustrate with several examples.
With over 800,000 Followers on Instagram, and an established style that has grown over the years, Gal stepped into the world of NFTs, attempting to sell 1,000 unique slimes at 0.1ETH each. Granted the price of his NFTs aren’t the cheapest, but they are pretty well priced to sell for the fanbase he has. Not to mention, he has built in additional utilities with BUB tokens, and have fun activities planned in his Discord.
The reason for the underwhelming response? Lack of Twitter marketing, and too little Discord members prior to launch. Gal is accomplished in his own rights, and will continue to build with or without NFTs, so I’m sure his NFTs will sell out eventually but it’s a very important lesson for us — communities are what makes a project. Even for someone of high credibility and accolades, the lack of a NFT community behind him has cost him in early sales.
It also shows how incredibly early we are in the NFT space; most Instagram users don’t understand the implications of NFTs and would not go through the hassle to set up their crypto wallet and buy an NFT.
Gary V’s name stands for something. When he launched his NFT project in May 2021, it wasn’t immediately snapped up. Most people could not see the value of paying 0.5ETH, and guess where we are now? Further, Gary’s NFTs are frankly just doodles (he’s not shy about it) and in terms of aesthetics, they would probably not be what you would expect to cost five figures.
Yet, Gary stuck to his mantra of “continuing to build, and continuing to add value” to token holders. While I didn’t understand what he meant when he said these when he launched his NFT, I now appreciate that the value of VeeFriends is not about being able to speak with or hang out with Gary V himself, but rather it binds you to a community of other token holders .
Have you seen the Loot NFTs? A black background, with randomly assigned traits presented in text.
Loot is so simple, anyone can recreate it. And it appears so silly, it’s hard to imagine why anyone would pay five-figure sums for it. Some say it epitomises the ridiculous NFT bubble, but I say it illustrates the quintessence of NFTs: Primary token value and secondary derivative value.
By itself, Loot NFTs are worthless. Any project can easily duplicate it and run it. Yet, when you throw in the power of the community, it’s what makes the primary token valuable. Loot attracts people who are the imaginative type like Dungeon And Dragons players, and through these plain-looking NFTs, creators have modelled characters out of them and created other derivative projects from it, which is only accessible if you own the original Loot NFTs.
However, a community-driven project is not without its risk. Community members can jump ship to another Loot variation if it’s truly better, and if that happens, the value of the Loot tokens will drop.