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thoughts as a collector (november 2021)

0xB618
November 29th, 2021
me by @jungnft (https://twitter.com/jungnft)
me by @jungnft (https://twitter.com/jungnft)

Hi, you may know me or you may not. My name is robek and I’m an artist and collector of NFTs. As the former most important collector on Foundation (I was recently displaced by a man who likes to fish in real life and not just metaphorically like me), I thought I’d finally write out some of the thoughts I share often in chats around the web.

I’m not qualified to write this and my view of the NFT marketplace is very different from people who are here collecting to get rich or make speculative investments. I spoke at a panel during NFT.NYC in the beginning of November (2021) and while the panel was not the topic I asked for, the sentiment of my original panel idea will exist here. Originally, I wanted to speak on this topic: “Nobody knows shit about anything”.

I definitely don’t know shit. But if you need a quick intro to me, I guess watch the five minutes above.

With that out of the way, I’ll remind you that the following smattering of ill-defined thoughts are not financial advice or therapy or really anything of substance or value so please leave if you’re expecting a roadmap for any of that. Though, that was mostly posturing so read on.

The Artist:

I didn’t mean to start collecting NFTs. When I re-entered the NFT space in 2021, I expected to participate for a month and then disappear. You can read those original thoughts below. The basic gist is “Artists are guinea pigs for web3. I can’t collect all art. I will support the artists I collected for as long as I can. Thank you for participating in this experiment.”

Things change. I’m stuck here now forever because I’ve had a really great time actually getting to connect with artists and builders from all over the world. I still think that artists go through a lot by participating in this great experiment. It takes a lot of risk to enter the space. Toxic greed may kill it before the glory days of digital spa’s and metaverse dive bars - but I’m hopeful we’ll get there.

My focus is on artist exposure and growth. My mindset on how to achieve this has changed pretty dramatically from March.

The original flavor for pricing

If you are an artist and you’ve connected with me early on, I talked a lot about two things:

  1. Laddering
  2. Community

Community is really still quite important. Most discovery is either going to come from artists and collectors connecting via social channels or discords or wherever and having conversations, while sharing work and process. For the artists that don’t get discovered through this -- there are collector networks that share art discovered through this method and this expands reach for an artist. The most valuable thing an artist can do for discoverability is to engage authentically with the people participating in the space. Be yourself. You’re going to find others who vibe with you if you present as yourself.

There’s two ways to grow. Top-down or bottom-up. People think that a blue-tick on Twitter or someone with a billion followers are the people they need to attract. This isn’t correct. You can spend your entire life trying to create works to appeal to a specific collector or speculative investor and never be seen. It’s incredibly difficult to approach this space from a “Top-down” approach. In reality, bottom-up is going to work out 99% of the time. Meet people that share your principles and vision, collaborate with them, join their circles, and grow upwards together. You can set the trends through the power of friendship.

Laddering is a different story.

The ladder approach is basically, “I list a piece for .10 eth. It sells for .20. I list my next piece for .15. It sells for .25. Rinse and repeat.” I used to be a huge fan of this approach because in a bull market it seems to work. It signals to collectors that there’s some growth and competition required to secure a piece and if you’re getting frequent sales, sure it looks great on your profile.

But as we’ve shifted into multiple bearish NFT cycles and as I’ve connected and met many more insightful collectors than myself, I’ve come to realize that the ladder approach is more likely to cause long-term stagnation for an artist than growth.

Let’s break this down a bit.

Value as a metric

Money isn’t real. The USD is just a piece of paper and cotton. It is assigned value because a large amount of people believe that it has it. This is basically all markets. The more people that see ‘value’ in an asset, the more the hivemind simulation solidifies what that value is in the reality we experience.

But NFT markets are young. Value fluctuates. Let’s say you entered during the Beeple saga. Some insane marketing collector decides to drop 100 ETH on your piece. AMAZING! Congratulations on your sale. So now is your “floor” 100 ETH? No. It’s not because your next piece just sold for 3 ETH to some speculator hoping to sell it for 100 ETH. The first buyer just launched a music business or an NFT platform and they aren’t in the market to actually buy more NFTs. They’re in the market now to sell you what they own or sell you on their product.

Keep in mind, I’m talking primarily about auction mechanics here. Though you can apply some of these principles to set price listings.

I’m going to continue… but first I want to say what I say to all artists before moving forward. Never list something for less than you believe the time you spent creating it took. Undervaluing yourself is possible. But as the price of ETH continues to go up we need to have a serious conversation about 1 ETH = 1 ETH (which we’ll do in the following section).

The ladder approach seems to only work for artists that have had significant volume of sales. This isn’t the majority of new participants. Even the ‘popular’ artists still set a consistent listing price after they’ve hit a solid floor.

Reminder: The floor isn’t real. The floor is not the value of an asset. Value is derived from the buyer.

I think one of the most important wake-up moments for me was Naoki Saito’s entry into the space. I believe he’s transformed the Japanese NFT scene and I think his approach to NFTs will continue to be a bit of a roadmap for JP artists entering (as well as many others across the East). Saito-sensei has a very realistic perspective of both the marketing requirements involved with NFTs and the reward/game mechanics. In my circles, the term “Stamp” has become a very huge incentive for participating in an auction. A stamp is a reward to participants in an auction and it has changed how I think about laddering. Not because the reward mechanism exists but because of the price action it creates at the beginning of an auction.

Saito-sensei also closes an auction very differently than Western artists. I believe he has a very solid grasp on “value” as a concept. Instead of saying “Thank you to the winner, the piece has sold at XYZ eth!” he says “Sold! This work has been given a value of XYZ by ABC!”

This is a significant difference in mindset.

First of all, Saito-sensei lists each piece at .10 ETH. He is a popular illustrator and teacher but the cult of personality does not impact the price of the reserve. As a bonus, he airdrops “Thank you” stamps to all bidders. This creates a new game mechanic on top of just the regular auction. Bidders have the chance to collect a piece simply by participating or they can try to create scarcity by very quickly increasing the bid from .10 to something much higher (like 4.2069). So, not only does this create Fear Of Missing Out (FOMO) on the piece being auctioned. It also creates FOMO for the reward stamp.

Stamps aside, setting the minimum or low reserve is the best way to see a realistic perspective of your real floor value. If you’ve listed a piece months ago using the ladder approach and it hasn’t sold, you’ll either never sell it or you won’t sell it unless future sales volume increases to a point where your old listings are seen as a bargain. Both of these outcomes can be incredibly demoralizing.

Reminder 2: not selling within a few days of listing is not failure. Art shouldn’t be treated like trading cards. This isn’t a race. Burning unsold works usually only works as a FOMO mechanism but doesn’t often result in a sale. Front page mindset is engrained in us but as a lot of discovery happens through social channels and networking - it shouldn’t impact artists too much. On some other networks maybe it makes sense to refresh mints to ‘boost’ front page discovery - but on Ethereum I don’t think it’s worth the cost.

I am NOT advocating for every artist to list at minimum reserve (.10) or even need to add incentive mechanisms like stamps. I’m advocating for consistency. Here’s a short case study on an artist that’s recently come onto the scene in the end of October. Their name is Benangbaja. I’m a big fan of their style and consistency in work. I’m also a huge fan in their consistency of reserve prices.

They’ve listed a large number of pieces in a relatively short time frame. Some collectors will argue this devalues work. I don’t think that’s the case if you remain realistic about expectations. Benangabaja’s not a unique case in this practice and there are others that follow this strategy - but I’ll focus on them because it’s fresh on my mind. They’ve listed each of their static pieces at .30 ETH. As of now there is currently one piece available in their inventory which is animated and listed at .50 ETH. The reserve price point is fairly accessible for many people already participating in Ethereum NFT markets. When you take a look at the DATA - you can see some interesting things happening.

  • Out of their 20 sold pieces, only 6 sold at the reserve.
  • The average value across all the pieces lands at .48652 ETH
  • They’ve sold every piece.

When you start to pull back and look at total sales/volume it becomes a bit more granular on where “value” is defined. An artist’s value is not the average sales point - the idea of a floor price for an artist is a bit wonky. Each piece is assigned its own value by the collectors. Overtime these valuations will go up and down depending on artist output, volume of collectors, and volatility of ETH markets. Defining one’s true value is probably an exercise in driving yourself crazy.

There’s an added bonus to lower reserve listings in that more bids can benefit things like “front page” discoverability. Many trending algorithms are based on number of bids. If you set a high reserve and don’t usually have bid wars - discoverability is most likely going to only happen through social promotion.

The final point I want to make here is that if your goal is to sell - selling more often for “less” seems to be more effective than selling less often for more (at least in the scheme of growth visibility. I know many collector’s tend to like to see a lot of sales on a profile).

1 ETH = 1 ETH

It doesn’t.

There’s a heavy weight on the shoulders of artists participating in NFTs that is put on them by the diverse pools of collectors that exist in the space. In general, I’d advise against trying to accommodate a majority of collector’s complaints. Some insight may be useful for strategy but the artist should never feel obligated to appease some lunatic on a tear. I’m going to define a few of the collector archetypes but know that I’m probably missing some here.

  1. The speculator - Sometimes “understands” art, often doesn’t. Buys art intending to resell it later. May copy trade, compulsively lists if flip doesn’t happen fast enough.
  2. The investor - Buys art for long-term hold. Similar to the speculator but much more patient and considered in how/when they list.
  3. The supporter - Buys art from artists they like. May list later or sell to fans of the artist in a considered way.
  4. The fan - Fan of artist. May not always have the same level of capital available. Usually buys lower listings or editions. Needs accessibility to participate.
  5. The marketer - Buys a lot of art very quickly to boost social profile. Does not consider implications of purchase. Stops buying after a few weeks/months and begins to try to sell their new audience something.
  6. The psycho - Buys a lot of art and no one knows what the fuck is going on.
  7. The agent - Buys art directly from artist to resell to any of the above at a premium.
  8. The artist - you know what you do.

As many collectors entered from the coin-trading side of things, the quick flip and heavy focus on ROI is a pervasive part of the current NFT marketplace. This is a reality that we have to contend with. Long-term and as NFTs become more mainstream, the reality of the situation is that huge insane purchases will become less frequent as the economy shifts to become more accessible for more people (but we’re some ways away from this I think). Because so many have come from a trading background, there’s a lot of expectation for a ROI on an artist’s work. This is why you see things like:

  • “artist’s roadmap” Yeah… you probably don’t need one. just be visible and engaged in the space. SEE: COMMUNITY

  • 1eth = 1eth” This is great for the speculative collector who doesn’t really understand that the floor isn’t a real thing but it really doesn’t make much sense as ETH continues to go up. It especially doesn’t make sense to non-ethereum natives who are just entering the space. I’d recommend for new artists to grow to the point where they can comfortably create work and work on becoming ‘crypto-native’ during this phase

  • “burn all but 1 of your editions! you shouldn’t do editions!!” This doesn’t’ really make sense to me. The person who bought your 1 edition asking you to burn the rest isn’t going to buy out the rest so why would you burn them? Collectibles (think baseball cards, toys, stamps) like profile pictures or “everydays” are often priced lower on primary market. Collectibles are a good way to allow people with less capital to still collect work from an artist they like. Editions work similarly to collectibles though they will typically have a smaller supply (10/10’s - much more akin to fine art prints sold at a comic convention or art show). As you grow in visibility, it may not hurt to consider editions.

  • “721 is optimal PROTOCOL” It’s not - it’s just one of many standards. These people are insane.

  • “XYZ IS THE BEST MARKETPLACE - YOU HAVE TO BE THERE”. This is nuts as well. I think most people obviously have their favorite platform and there’s obviously niches that perform well on some of them - but discoverability isn’t going to improve just because you’re suddenly on some platform that someone else says is amazing. There’s a marketing problem in the space. Most artists aren’t marketers (which is why it’s so important to connect with a community, because that doesn’t require you to be writing pitch decks) and to be honest there’s a major collector shortage as it stands. If you aren’t selling on one platform, you probably aren’t going to sell on another.

    Also, FND, MP, KO, SR all have a 15% primary commission fee on sold work. I see a lot of complaints about Foundation specifically having the 15% but it’s there on all of them. Perhaps capitalism and competition will eventually force them to change this % - but for as long as people tout one or another as the place to be, they’ll keep this power. The gas cost to mint on platforms differs based on contract complexity. I’m more forgiving of the contract costs. Without naming names, a few of these contracts are really robust and can help artists out of jams if shit hits the fan.

  • “Don’t reduce price on listings”. There’s not really an issue with this if you haven’t sold and are looking to. Where it becomes a problem is if you have a habit of lowering reserves over time on most pieces. Collectors are savvy. They’ll wait until you’re desperate and have reduced. Provenance looks a bit better when cleaner. Sometimes by not reducing price, it may increase the psychological value of it. It’s a mixed bag, man. Remember, as I’ve repeated, consistency is really important!

A poor conclusion

The current pool of collectors is still quite small. For artists participating, patience and engagement are important tools. Don’t fear the popular illustrators and artists entering the space. With them come new collectors. Don’t fear the collectors in the space - some are insane but there’s a growing number of people collecting that care about the artist. I’m not an authority - a lot of what I’ve said here I’ve learned over time from actively listening to collectors and artists.

To wrap up, I think this has focused a lot on auctions but I believe similar principles apply to static listings. Just because a piece has sold on secondary for 100eth doesn’t mean you can’t list new work at .50 ETH. Consider themes across editions, collectibles, and 1/1’s if you choose to explore these. Markets are fluid. Cycles exist in asset markets and trends exist in fads and fashion. There is very likely artist cycles as well. Sometimes things slow down and we can learn from these periods by trying new things. Mechanics are fun sometimes but don’t overextend what you can do. You’re the best person to understand your own limitations. NFTs should be an opportunity to explore the work you want to make and experiment with and not just another Artist Alley at a comic convention where everyone is selling prints of Spider-Man.

okay. i’ll do another one of these maybe some time. ily.


other collectors with more nuanced and intentional perspective than me (not a comprehensive list - there are many more):shiomu, palis, kaijuking779, justaziz, morello, kiwi, omar, impostor. I’ve learned a lot from them.

if you want to learn more about me, my friend JL Maxcy wrote an amazing article through curating my collection:

My friend Adam McBride interviewed me early in the year about my participation in 2017 and now:

Arweave TX
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Ethereum Address
0xB618aaCb9DcDc21Ca69D310A6fC04674D293A193
Content Digest
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