Latest Rare Candy News

Static image and JPEG NFTs are on the decline. Consumers are tired of purchasing NFTs that can only be looked at, collected, or ones they hope to sell for a higher price. We are past the peak of static image and .gif NFT speculation. In this article, I am going to take a look at some of the recent activity we have seen in the NFT market on BSV that highlights some of the follies in the digital art collectible NFT market. The Frog Cartel flop: The first of many Frog Cartel was an NFT drop that took place on the RareCandy on January 11, 2022. However, the Frog Cartel launch was much different from the previous two NFT drops on RareCandy. While the previous two drops immediately fetched higher prices in the secondary market, the Frog Cartel NFTs immediately dropped below their mint price of 0.36 BSV each. The frogs have still not recovered to their initial mint price, and as of press time, the floor—the lowest price the NFT is selling for—is 0.28 BSV. To add insult to injury, a Frog sold for .06 BSV ($5) on January 25, which is a whopping 83% lower than the mint price of the frog. https://twitter.com/rarecandybot/status/1486008026943348740?s20 Why did this happen? One of the reasons we saw the Frog Cartel NFTs underperform was because the project's creators inadvertently devalued the project. The total collection size of a project should not be multiples higher than the number of buyers in the market. Creators need to consider: How large the market for NFTs on BSV is? How many potential buyers the project has? What is the average amount of BSV that a potential buyer is willing to spend on the project? You can get a rough estimate of metric no. 1 by taking the average number of unique owners on an NFT platform using data from past launches on the platform, and you can get a rough estimate of metric no. 2 from the project's social media following. Now let's apply that methodology to the Frog Cartel launch. For metric no. 1, the average number of buyers in the market for NFTs on RareCandy is 445 unique buyers. The Astro Ape project has 296 unique owners, Oni Society has 457 unique owners, and Frog Cartel has 581 unique owners. 296+457+581 divided by 3 is equals to 444.66 For metric no. 2, the Frog Cartel Twitter account has 1,996 followers as of press time, so let's assume that 1,996 is the total number of potential buyers for the Frog Cartel project. For metric no. 3, the average amount of BSV that each potential buyer has is unknown, but let's play it safe and say that each potential buyer at least had enough BSV to buy one frog and was only willing to buy one frog. And the final piece of information we will need in our analysis is the total size of the Frog Cartel collection, which is 3,690 frogs. That being said, each potential buyer would need to buy ~2 frogs for the collection to sell out. 3,690 divided by 1,996 1.84 But let's look at what actually happened. According to RareCandy, there are 581 unique frog holders, and if we assume that everyone has an equal amount of frogs, then the average number of frogs each individual bought was 6. When a new NFT project is released, and the collection size is multiples higher than the total amount of buyers in the market, it means that market participants will need to purchase multiple NFTs for the collection to sell out or that the project will not sell out within minutes. This is seen as a negative in the NFT world because it shows that there is not a large following or community around the drop and, therefore, there wouldn't be a lot of value in the project. Economically, the total supply of the Frog Cartel launch was way too high for the actual demand for the NFTs, and as a result, prices are being driven down until they reach the point where consumers will have a demand for them. Because this is the case, buyers are selling their NFTs for a loss in an attempt to recoup as much money as they can because they believe there is more value in selling for a loss than there will be from holding the NFT into its uncertain and unpromising-looking future. In other words, Buyers believe there is more value in selling their NFTs for a loss rather than holding onto an NFT and waiting to see what happens to the price in the future. Although the Frog Cartel is only one instance—and the first instance—of the market for NFTs on BSV behaving like this. I believe it indicates that consumer sentiment around NFTs on BSV is changing and that some NFT creators are disregarding the actual size and demand in the market for BSV-based NFTs. I also think that the Frog Cartel launch was the first of many NFT flops. How to prolong the death of NFTs I think it's over for digital art NFTs—especially if creators continue to disregard consumer wants. I think the next iteration of NFTs will be NFTs that have utility, whether that means they can be used in-game or give their owner perks or special access to events—I believe those will be the NFTs that have staying power and that consumers will find desirable. But I don't think digital art NFTs will disappear overnight. I even think there are ways to prolong the inevitable death of JPEG and .Gif NFTs. Suppose creators opt for a smaller collection size, that's roughly the same size as the number of potential buyers in the market, and offer the NFTs at a price that doesn't price-out a significant portion of the BSV community, then the project has the potential to have a strong community that is eagerly anticipating the launch of a scarce collection. Because the collection size is small, there will most likely be some individuals who really wanted in on the project but were not able to purchase them on the mint day for some reason, maybe because of a timezone difference or they forgot about the mint. Regardless, this group will hunt for the NFTs in the secondary market, which creates the perfect economic storm for the floor price to rise. If the supply of the NFTs is less than the demand, it will force the price of the NFTs upward in the secondary market. However, I think that strategy will only be viable in the short term. When we zoom out and look at the macro vision, consumers are almost done with static image and .gif NFTs. Having a digital collection of images that don't have utility and can't be resold in the secondary market is not desirable. The primary use case of NFTs is still speculation. If the components aren't in place to allow for a speculative market, then the end-users will catch on, and there won't be any demand for the NFTs. Similar to what we are seeing with the frogs and hence why the price of them continues to fall. Watch: CoinGeek New York panel, Licensing IP for NFTs: Graphic Novels, Comic Books & Brands https://www.youtube.com/watch?vQ66b2p9g6Tw

Latest Rare Candy News

It’s over for digital art NFTs

Rare Candy is Bitcoin’s newest NFT platform