What Gives an NFT Value

Our ultimate goal is to provide as much value to holders as possible. While this is easier said than done, I’d like to walk you through our thought process on the fundamental value behind NFT collections and what we are trying to accomplish with Original Nomads.

NFTs are valued through a combination of four factors:

1) Artwork

2) Branding

3) Community

4) Cash Flow

1. Artwork

There is inherent, intrinsic value in owning artwork. You may be saying to yourself, “It’s just a profile picture; who cares,” but it represents your digital identity in a much deeper way. Humans spend about a third of their lives staring at screens browsing social media, playing video games, and consuming media. Social media curation is already a phenomenon; as NFT adoption expands to a broader audience, we will see buyers become increasingly selective on how they display themselves. Innovative projects will take this even further by giving holders the intellectual property rights to their particular NFT, allowing consumers to “create their destiny,” so to speak, and build a brand behind it.

2. Branding

The value of the artwork in this context is very dependent on brand perception. A significant indicator of this is the floor price of the collection. They are considered valuable because they are valuable. It’s kind of like how Kim Kardashian is famous for being famous. So, in my personal opinion, BAYC, Azuki, Doodles, etc., have become too big to fail in this regard.

Before reaching that “blue chip” status, an NFT project must separate itself from the competition. Through innovation, execution, partnerships, etc., the public must “buy-in” to the vision and trust the team to execute.

3. Community

If you have ever been in an NFT discord, I’m sure you’ve seen “Delist, Delist, Delist” spammed in the chat. I’ve even seen some projects “burn” NFTs listed below a specific floor price (not naming any names). The idea behind this is to artificially lower the supply, which raises the value of the collection.

The problem is the assumption that demand remains constant, despite no additional value-added.

Someone might have been willing to buy “x” NFT at .15 but not at .50

You can’t force someone to hold an NFT that they wish to sell. You can, however, make it a difficult decision. Holding an NFT gives you the ability to participate in a unique experience. Those friends you’ve made, the fun you’ve had; What’s the minimum amount you would need to be paid to lose access to that experience forever?

4. Cash Flow

Cash flow measures financial incentives for purchasing an NFT, aside from the resale value.

Almost all projects provide alpha or allowlist spots, which indirectly includes cash flow (keep in mind that some are better than others). Staking rewards, given by locking your NFT into a smart contract, are another tactic to reward holders and organically disincentivize listings. It isn’t always easy, but try and estimate how long it would take for you to recoup your initial investment by calculating a project’s cash flow.

Hopefully, this gives you an insight into what we look for before buying into a project and gives you an idea of what we are trying to build with Original Nomads.

Until next time,

Fetty