NFT 'art' projects are just MLMs
NFT Art and MLMs have two commonalities: obscure acronyms and selling to friends
You can imagine that I’m not a fan of the NFT ‘art’ space, by the fact that I put ‘art’ in ‘ ’. I do so, because I’m a pretentious snob it makes me feel superior. I think my limited and fragmented knowledge about the history of art and aesthetics makes me a true intellectual and connoisseur. I also see limited artistic value in this (Title: Duck #1644):
I’m comparing the NFT ‘art’ space to MLM schemes. What are MLM schemes? Think Amway, Avon, Herbalife etc. The way these work is the following. They will promise you an entrepreneurial life but you’re just a sales rep to them. They make you buy, say, $500 of product that costs them $50 but promise you that you can re-sell it for $2000 and keep some of the margin. If you convince someone to do the same, you can keep a 10% of their profit, and so the pyramid scheme begins. Just that instead of an investment you have overvalued cosmetics or watches. These schemes destroy the social fabric, because these ‘entrepreneurs’ try to sell to friends & family, burning through their social capital. I’ve seen many personal tragedies. I have cut ties completely with one person who tried to recruit me for an MLM.
Anyway, back to web3. Web3 is community-driven. Standard go-to-market strategies do not apply. You build discord servers instead of CRMs and a salesforce. But how does it work? Let’s use an example. Imagine, we do the next samey drop of JPG files with rubber ducks with different fashion accessories. (F*ck. I just googled it. It already exists.)
Anyway, say, I’m the creator. I will invite a few friends who I think could benefit the scheme. Then, we open a discord server, build a website, then we market it as the next huge drop, announce the drop and then finally we mint the NFTs (fancy term for uploading the JPGs to OpenSea).
What’s crucial for my argument that NFTs resemble MLMs is the following mechanic: it’s in everyone’s interest to hype up the NFTs as much as possible, because that hype increases the value of the entire collection. This means that whoever joined will have a strong incentive to sell to friends. The similarity to MLMs is that you hope to be on top of the pyramid.
Another crucial aspect: the earlier you join (with the founders & friends being), the more you’ll be able to win. In MLM schemes it’s only the top 1% or so who make any significant money, the works for less than a bad wage. It’s not as extreme in NFT drops, but it would cool if someone actually ran the analytics for what the pyramid shape is in NFT ‘art’ collections.
Anyway, this is terrible. If you’re in the NFT ‘art’ space, please think about the ethics of selling overvalued goods to friends and the long lasting impact on your social capital.