🧘♂️REVEALED: Crypto's Huge Problem
Market Meditations | October 26, 2021
And Our Simple Solutions
We have a huge problem in crypto.
People want to get started with buying, investing and trading NFTs but there’s too many marketplaces. How do we buy our first NFT? Which marketplace is best? These are all questions we answer today.
? Top 5 Crypto Headlines of the Day
? NFT Strategies and Marketplaces
? Trading Education Puzzle
? Introduction to Alien Worlds
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Our Market Meditations are longer format educational segments. Each letter features a Market Meditation which will deep dive and analyse a relevant crypto event, theme or tool.
? Packed Market
Thought about buying an NFT but don’t know where to start? Even after reading our NFT guides, you realise there are thousands of projects across dozens of marketplaces. While we can’t tell you what to buy, we can prompt an initial question that will impact where you might go to transact.
Stick or Twist
There are several things you can do with an NFT that you should consider – so what do you want to do?
Quick flip – buying and selling NFTs within a short timeframe with the sole intention of quickly profiting. See our Nansen article for some tips.
Speculate/Invest – buying NFTs with the intention of selling them later. Researching good projects that will appreciate in value is key. See our NFT strategy article.
Collect/Use – buying NFTs for the love of the game, or quite literally to be used in a game. Money is secondary to sentimental or utility value you’ll get.
Rent Out – it may also be possible to lend your NFTs to generate a form of passive income, like with sponsorships in Axie Infinity.
Go to Market
Some NFT marketplaces are dedicated to a specific item, such as NBA Top Shot or Decentraland.
But even excluding these, not all marketplaces are the same – they still differ in content offering, fee structure, and user experience. Let’s explore a few examples:
OpenSea / Rarible / Nifty Gateway – the best-known examples are located on the Ethereum network and all offer a broad range of digital goods, from art to music to in-game items. The focus is on ease of access and a simple user interface.
SuperRare / Foundation – these Ethereum marketplaces are heavily curated, only allowing specific artworks to appear based on the goals and vision of the platform. This can lead to strong communities but also higher floor prices due to the selective approach.
Magic Eden / Solanart – the latest marketplaces are based on the Solana blockchain and have spawned some of the hot trends like Degenerate Ape Academy and Aurory. The focus is on speed and, in particular for Magic Eden, a smooth user interface.
Fees differ across the platforms but consider the following:
Minting / Listing fees – these tend to be based on gas (due to smart contract interaction) and are therefore more expensive for Ethereum marketplaces than BSC or Solana (where they can be free).
Transaction fees – apart from standard gas fees, there are also platform-specific fees that tend to range from 2% – 3% of the sale price. Also note that curated marketplaces include commissions of ~15%, which are passed on to the buyer.
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? The Ostrich Effect
Which of these sentences describe ‘The Ostrich Effect’?
Running around and flapping your arms trying to fly.
Seeking out information, to help come to an informed conclusion.
Deliberately avoiding negative information, even where this information would allow us to reach a more desirable outcome.
? Out of This World
Move over Axie, there’s a new kid in town. Well, out of town, you know, up there in space. This week Alien Worlds took the number one spot for monthly transactions and surpassed 700,000 Monthly Active Users (MAUs). But what is this game and why is it suddenly so popular?
Alien World’s is another NFT metaverse game, which involves choosing a planet, finding some land to mine on and earning the in-game currency Trilium (TLM).
This Play-to-Earn title launched a year ago and has spawned communities working together and encouraging mining on each other’s land with various incentives.
All of the game’s digital assets are minted on the WAX Blockchain. This has a utility token called WAX and a gas token called CPU (which you need to play the game).
Recently the game received a fresh, new user interface (UI) for desktop gamers, as well as a mobile-friendly UI – the latter is thought to have rapidly increased user growth.
It is also possible to play the game without an initial investment as you are gifted 1 WAX on opening account, which you can stake to receive CPU to play and start mining TLM.
Despite the recent success, the game’s tokenomics have suffered over the last six months due to the rapid growth of bots looking to leach value out of the community. This has led to higher tool costs and a suppressed value of TLM. The team are reportedly working hard to mitigate this.
3. Deliberately avoiding negative information, even where this information would allow us to reach a more desirable outcome.
Seems counterintuitive right? But believe it or not, this is more common than you may think. Rather than confronting our issue, just like ostriches, we bury our heads in the sand. Research has shown this happens in several situations:
Where information would require a change in previously held beliefs
Where information would demand an undesired action
If we believe progress to be poor
Where thinking or working on the relevant goal would lead to negative emotions
There are two things that can help us avoid this:
Improving our self-awareness
Remembering to focus on the big picture
If you want to find out more about this effect and how to avoid it check out our article The Ostrich Effect: Getting Your Head out of the Sand.
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Not financial or tax advice. The content in this newsletter is for informational purposes only. Nothing in this email is intended to serve as financial advice. We are not financial advisors. Every investment and trading move involves risk. Do your own research when making a decision. See our important security disclaimers here.
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