Wave Three: Community — Community-Owned Gaming
This is the 6th part of an ongoing NFT classification series.
In the sixth part of this NFT series, we’d like to focus on the prevalence and power of community-driven NFT projects that have transformed and reinvented the face of this nascent industry.
Editor’s Note: This is the sixth part of our NFT series! We’re incredibly thankful for everyone who has followed this series and shown it love along the way. As usual, drop us a line if you’d like to get connected with us or contribute to this wonderful project. Nonetheless, first things first — let’s dive back in.
In our last Medium post, we talked about how NFTs grew to become more than digital collectibles. Utility marked this particular Wave — where NFTs evolved beyond unique tokenised ownership, scarcity and collectability to tokens with greater value proposition.
This shift towards added utility has seen NFTs being used by top sporting organisations in the US like the National Football League (NFL) as game tickets, adopted by music bands like Kings of Leon for their “When You See Yourself” album release which generated US$2million in sales, and utilised as exclusive club membership verification by NFT projects such as Bored Apes Yacht Club.
However, how has the NFT market seen further growth?
Enter the Third Wave — Community.
So, what is so fascinating about the Third Wave?
Well, the most fascinating thing about Wave 3 is that, unlike the previous waves, communities that would’ve otherwise never existed are now forming and rallying around the possession and investment of these community-owned NFTs.
No matter which way we look at it — NFTs are community-driven.
It is the power of community that raises awareness, creates hype, fosters a sense of belonging, and raises the floor price of any burgeoning NFT project. In turn, the crazy sales volume allows the creator of the project to further incentivise long-term holders through added utilities.
Just think of it this way: would Bored Ape Yacht Club or Cyberkongz be successful projects without a strong community?
BAYC offers exclusive members-only access to digital clubhouses where you could possibly rub shoulders with fellow BAYC NFT owners like talk show host Jimmy Fallon, musician Post Malone, NBA superstar Stephen Curry, DJ Steve Aoki, or Mandopop singer JJ Lin.
And Cyberkongz offers dividend-yielding $BANANA tokens to their Genesis collection owners. Genesis CyberKongz holders are now being rewarded with 10 $BANANA tokens a day. This adds up to a passive income generation of USD$480 a day (at time of writing).
These added utilities have propelled these NFT projects to mainstream consciousness and everyone wants a piece of them.
However, this is where Wave 3 takes the element of Community to the next level.
Picture this: eight white words in Times New Roman font, on a black background — publicised via a tweet.
This is Loot — a community-owned, collaborative media NFT project.
It all started with Dom Hofmann — the co-creator of Vine. In an effort to promote blockchain-based gaming and the communities that surrounded it, he wrote a random item generator software that would churn out a list of weapons, pieces of armour, and accessories.
When he was done, he then sat and wondered what would happen next — before releasing the experimental project in a free mint on 28 August 2021.
The 7,777 NFTs (aka Loot bags) on offer were immediately snapped up in a buying frenzy. In the next five days alone, Loot bags were resold for USD$46million, had a market cap of USD$180million, and floor prices of USD$46,000.
Why would people pay five, six, or even seven figures for these plain-looking NFTs? What is the deal with these randomly assigned traits?How do you even begin valuing this “silly” project?
Well, it can be hard to imagine why anyone would pay good money for these NFTs, and some have said that it is the epitome of the “ridiculous” NFT bubble.
By itself, Loot NFTs are worthless. Yet, when the element of Community is thrown in — you get something incredibly valuable.
Like clockwork, members of the Loot community started coming up with a large number of projects of differing varieties at astounding speeds.
First, people started creating art based on the Loot bags — some were hand drawn, others were produced through AI software, and some even came up with video game quality concept art.
Then came the creation of guilds based on the items present in one’s loot bag, like Divine Roles, a guild composed of those possessing divine robes in their Loot bags of which there are only 396 in existence. It also comes with a marketplace for robe purchase (currently a 4 ETH floor price at time of writing).
Think dungeons and dragons but with a twist — the entire community takes part in world building instead of a single game master. Artists and designers create characters, writers and storytellers determine the narratives, gaming aficionados come up with statistics, and everybody else implements whatever they can dream up in this decentralised Web 3.0 fantasy universe.
At the end of the day, community-driven projects do not exist risk-free. Community members can hop over to another Loot variation, interest could take a downturn, and the value of these tokens can plummet.
Again, Loot NFTs are worthless without a strong community backing it, and community is what creates and drives value for NFT projects of this nature.
But this project has definitely unveiled a world of possibilities with community-owned NFT projects.
In the next article, we move on the Fourth Wave! Stay tuned because we’re only getting started!
THIS IS NOT FINANCIAL ADVICE
Cryptocurrencies like NFTs are nascent and in very early-stage startups. They are heavily subjected to speculation on the secondary markets and should never be treated as a form of investment.
Our write-up is a humble attempt to show the technological advancements and innovation that the blockchain technology possesses.
Readers are advised to engage their own financial advisors and do their own due diligence before making their first purchase.
All information expressed here are in the views of the writer based on the date of article.
We are looking for industry leaders to co-create this together. Please write to [email@example.com] for your interest to participate in this community-written project.
LESLIE DANIEL CHAN. Founder, DeFi Singapore