Paper 10: NFT Influencers
A disquisition on value and the role of the "influencer"
Beware of false prophets, which come to you in sheep's clothing, but inwardly they are ravening wolves
Matthew 7:15
People tend to place faith in trusted individuals to provide them their thoughts, opinions, and guidance in the absence of their own knowledge, expertise, and wisdom (and the time it might take to develop these attributes properly).
Abrogating responsibility for thinking is not new: religions, political parties, companies, and irl or online communities all contain leaders to whom others look for guidance once the leaders have demonstrated competence and/or hard work (and/or engaged in some subterfuge behind the scenes) to reach the top.
The NFT space operates no differently:
there are a number of new entrants in the space who are figuring out exactly what is going on with this revolutionary technology; and
there are also a number of people who have been elevated to positions of responsibility and wisdom in a very short space of time.
This latter group of people are the “influencers”.
The term has come to contain a negative connotation because it is perceived that those who wield such influence do so without sufficient competence and often manipulate their followers to make money. There has been some evidence of nefarious activity in this way.
In spite of this, I reject the idea that influencers are all bad. In fact, I would argue strongly that it is 100% a legitimate enterprise to produce content of cultural interest to propel our nascent space forward.
In this Paper I look at how “influence” is wielded in the NFT space, why it’s important, and where lie the deathtraps.
Act 1 - The problem of valuation
In Don Thompson’s $12 Million Stuffed Shark: The Curious Economics of Contemporary Art an unspoken truth about the contemporary art market is revealed:
“What is judged to be valuable contemporary art?” is determined first by major dealers, later by branded auction houses, a bit by museum curators who stage special shows, very little by art critics, and hardly at all by buyers.
Don Thompson, $12 Million Stuffed Shark: The Curious Economics of Contemporary Art
This quotation comes moments after:
art collectors are described as aloof, mystified characters who don’t really have the time to “know” anything about art so are entirely dependent on their advisors to judge value on their behalf; and
“contemporary” art is described as predominantly “temporary” - in that most art does not gain the recognition required to be relevant for any significant period of time.
From this set of information we can take away the following (which can also be applied to the NFT landscape):
(i) Very many people in art have no idea what is valuable
(ii) As a consequence, very many people are looking for signs or guidance as to what is valuable
(iii) As a consequence, very many people produce content to advertise and/or market particular work as valuable
(iv) The stories told about particular works help to shape their destiny
Just like irl exhibitions have little booklets of information to provide context to the exhibited work, digital art needs media to support and propel it.
This is even more important in our nascent space for three reasons:
there is no established order for deciding what is valuable - whilst branded dealers/auction houses do exist in a transformed manner as successful platforms/distributors of curated digital art (e.g. SuperRare and Art Blocks), they don’t yet produce the sort of marketing content that traditional houses make to push their artists;
the NFT market innovates quickly and spans such a variety of digital assets - without producing content there is simply no way of keeping up with everything that is going on at one time
digital assets can be bought and sold much more quickly than their physical counterparts - this speed to market creates a bit more of a frantic set of behaviours around buying/reselling digital assets.
As such, there is a fight to decide who determines what is valuable.
Act 2 - The fight for the spotlight
Media and social media are upstream of everything.
Code is how you have machines know what to do and media is how humans know what to do.
Balaji on David Perell’s ‘North Star’ podcast
Media is how humans know what to do: those who have a hand in the production of media create and influence human culture. This is a great power and responsibility.
And yet the production of media is also culturally valuable. It is a legitimate enterprise - even an art form in and of itself - to express ourselves, enter into important debates, and hold ourselves accountable.
There are a few ways influence is won in the NFT space, and to be fair to some individuals, it’s not necessarily something they have specifically sought out.
i) Money
Money talks.
If you make lots of purchases, this attracts a large audience of two types: the artists who view you as a prospective buyer and the collectors/flippers who view you as an authority.
ii) Quality of collection
This is highly subjective, naturally. But the higher the quality of a collection, the more likely it is for the owner to wield influence. (Naturally linked to money to some degree.)
I’ve enjoyed the following galleries:
@schmrypto: https://oncyber.io/smoaca
@_ayyybee_: https://gallery.so/the_ayybee_gallery
@NFTgirl: https://superrare.com/nftgirl/collection
@batsoupyum: http://oncyber.io/bsycave
@iamDCinvestor: gallery.so/dcinvestor
@DeezeFi: https://oncyber.io/deeze
@krybharat: oncyber.io/krybharat
iii) Connections
It isn’t about what you know, but who you know.
Some people seem to personally know artists; the founders of particular projects; people who work at the auction houses; people who have investment opportunities.
When you really need someone to reply to a DM so that you can make a decision, this is pretty helpful.
iv) Competence
As legendary collector @2Yeahyeah replied to me below, being right helps.
Being right demonstrates that (at least some of) your opinions can be trusted.
His thread on how he researched his early cryptoart purchases is a legendary resource.
v) Presence / hard work
I think being online is astronomically important.
All the influencers who grew quickly were online to an absurd degree, which I imagine required significant sacrifice along the way.
Here are some examples of people who have grown rapidly by producing helpful content and putting in the hours (in some cases months / years) with consistency.
This is not an exhaustive list - just a few who have impacted my journey.
@DeezeFi - held Twitter Spaces for long-form discussion
@Zeneca_33 - produced a regularly updated spreadsheet of floor prices of a number of popular projects when the community was trading the most
@artnome - work on his website (artnome.com) and rightclicksave.com is taking the complementary literature of the space to another level
@verticalcrypto - work at residency.verticalcrypto.art is very useful for those wanting to understand the metaverse landscape better
@ohhshiny - hosts a regular show on NFT art and culture
@farokh - interviewed a lot of prominent artists and hosted many Twitter spaces for the discussion of projects - runs @RugRadio
@osf_nft - writes regular detailed analysis of the market in the @DegenzNFT discord and now hosts an NFT show with @greatmando_nft
@hunterorrell - produces Morning Mint on YouYube which analyses the NFT market
vi) Personality
The power of personality is very real.
In a recent poll I asked people about “what makes an NFT Influencer”, and ‘personality’ won out.
I hadn’t expected that. But it shows how much people consider personality relevant to the success of those in positions of responsibility.
If people like you, it appears that your other attributes may not be as important as you may think.
Act 3 - The glory
For to everyone who has will more be given, and he will have an abundance.
Matthew 25:29
The followers keep coming when things are going well.
And so long as influencers say NFA before they say things, followers can keep coming even when things are going poorly.
When projects were proliferating, it appeared possible to quickly increase followings by buying into new projects and changing your profile picture to signal a new allegiance.
Whether this was an authentic move is difficult to say. It could probably only be judged on a case-by-case basis.
So how do the influencers capitalise on their position?
It depends on what capital they are seeking to accrue.
Is it financial capital? Cultural capital? Social capital?
And is their time preference the next year or the next decade?
As your favourite influencer’s numbers rise, it’s worthwhile considering what type of success they are after and their time preference to evaluate their sincerity.
Act 4 - The fall(out)
It seems to be the case that influencers are far more vulnerable to fall the more similar they are to their followers.
What do I mean?
The more that they need to sell things for more than they buy them - like “normal” people - the more likely they can be accused of using their followers as exit liquidity (when people say they like something to pump the price whilst they are selling at the same time).
Although that sounds really bad on the face of it, it’s not an exact science. What if someone buys ten assets, thinks the project is great, but wants to sell a couple to de-risk. Is that ok if they are actively marketing it at the same time? Perhaps so, if you disclose your holdings? And your intentions? Or maybe it's a free market and no-one is obliged to disclose anything if they aren’t being paid by anyone to market?
Or what if someone just likes something and tweets about it, and then it goes down in value. Are they somehow responsible for everyone’s financial decisions? That doesn’t seem fair or proportionate.
Nevertheless, there have also been examples of influencers marketing projects in exchange for payment without disclosing the real nature of their advertisements. My understanding is that this is illegal.
Another potentially “unethical” form of monetisation by influencers is building an audience for the dominant purpose of selling them a personal collection. Again, judgment here is not an exact science. Are people not free to decide how to spend their money? The freedom to transact is an increasingly relevant topic.
In any event, the nefarious activity of some actors and the unregulated nature of our space has meant that certain people have taken it upon themselves to call out bad activity when they see it.
@zachxbt produces some of the most thorough exposés in his twitter threads. I’d encourage you to follow.
I always seek out insight from @0xQuit before interactions relating to airdrops.
@NFTethics have also produced some good investigatory work into some of the shadier dealings of certain NFT operators. Though I would query some of their decisions both regarding the content of their threads and the branding of their account, their existence and following proves that there is enough mistrust in the system to warrant some well-directed investigation.
Final thoughts
“NFT influencers” is a lazy term.
I think it is better to consider those who have risen - rightly or wrongly - to positions of responsibility in the community as “NFT leaders”.
After all, they accrue influence only as a consequence of a reciprocal relationship with their followers.
The best way to reflect on the justness of that ascension is by asking three questions:
how did they rise to their position?
how does what they do now justify their position?
what has been the net benefit/deficit for any amount of their followers?
The people who cannot answer these questions well will probably see Act 4 soon.
Take care out there. Your trust and attention is valuable. Do your own research and take responsibility for your decisions.
Don’t get “influenced” like this.
Have a great day,
B
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Disclaimer: The content covered in this newsletter is not to be considered as investment advice. It is for informational and educational purposes only.
I hold some of the NFTs mentioned in these newsletters.