Is there a secret formula to success? Many have asked the question, what is your secret? Personally, I do not have one, and to answer the question, I don’t think there is any real secret, or shortcut to success. Not in life, and certainly not in the NFT space.
In fact, when you zoom in, the NFT space probably doesn’t make a whole lot of sense. It can seem unfair, unreasonable, and in many cases, it boils down to the luck of the draw. Hype is paramount to success irrespective of whether the art is good or not. An NFT project will almost always do well if there is hype behind it. Contrastingly, there could be an NFT project that has spent a significant amount of time building the art and utility, and yet still, they would fall on deaf ears. But, hype alone cannot sustain a project in the long term, this has been made evident by a number of celebrity cash grabs, and even high-profile avatar drops, where the hype was blown out of proportion and became too much to sustain. Consequently, it irreversibly damaged the collection, a snowball of flipping begins and a castle quickly crumbles, almost as quick as it took off. I discuss more of this in a previous article.
Although you can claim to know exactly how the market works, what project is the next big thing, who to follow, and what to invest in, the truth is that at this developmental stage the only certainty is that nothing is certain in the NFT space. New projects launching don’t all have the hype or community behind it yet. What’s trendy this week may not have existed last week and there will be a new flavour everyone’s talking about next week. There are certain trends you can follow, for example, 2021 began with art 1/1s on Foundation, avatar collections flourished during NFT summer, and as 2022 approaches, Play-to-Earn (p2e) blockchain games are exploding in popularity.
That being said, a lot of the NFT space is supported by just opinion, with credible knowledge and research still very much undetermined. Take for instance the now-iconic and culturally significant Bored Ape Yacht Club (BAYC) collection. For perspective, the collection dropped in May, a mere 7 months ago. In the real world, you would not be considered an expert with less than a year’s experience in any field, so for people to claim to be an expert at such an early stage is not so plausible. For the vast majority, we are simply figuring it out together.
So if there is no secret to success, why is it that so many of those around us are still able to be successful? It may be because they follow frameworks, certain strategies that you can take from outside, and implement into the NFT space. Stock trading experience is something many have drawn upon as they entered the NFT world, but for the most part, it generally boils down to luck, having an understanding of community, and making rational decisions. If I have learned anything since entering the space in July, it would be to make your own informed decisions in a timely manner. This is of course easier said than done sometimes. But how can you do this?
Take your time. Your research of a project should extend far beyond the basis of whether it is selling or not. Who are the community, who are the team, what are they offering, what is their utility, and what is their plan? It is important that you make informed decisions, as although you can make quick flips when the market is being driven by FOMO, it is the clear decisions that will help you in the long term.
Be inquisitive, be curious and be hesitant. Not only will this help you learn more about the project, it will help you refrain from minting projects every time they launch. Set yourself criteria, does the project meet your required expectations? It will take a lot of will to set boundaries, especially in a space as fluid and fast-moving as NFTs, but having control is important. There is no rush, do not give into hype. Remember that for every good project you may miss taking this approach, there will probably be 5 more.
The NFT space is 24/7. It is impossible to keep track of everything, even if you tried. So don’t. Engage with the community and ask for support and insight. Ensure that you maintain a healthy balance between your work and your rest. NFTs are addictive. Like updates on social media, you’re tempted to scroll your days away. There is no other way to put it.
From the community to sales, to collecting, to Twitter engagement, there is a constant flow of dopamine, both extreme highs and extreme lows. Price volatility is another constant, with massive swings in value and price floors made of lava that often swing both ways resulting in gains and losses in multiples not percentages. This isn’t normal by any stretch of the imagination, and the heightened senses of being in such an unpredictable space can quickly take its toll, for the good and bad. Consequently, it can also be an issue when deciding to sell, when to take profits, or when to accept that a project won’t be revived. An integral part to growth is setting boundaries for yourself.
Again there is no secret to trading NFTs. Is there a right time to enter into or exit a project? If your decision-making is impulsive then you could see short term success, but the likelihood of long term success is lower. But if it’s based on research, information, insight, data, then you’re doing it right. Never invest more than you are willing to lose. You may consider selling if the NFT fails to bring you happiness, if it brings you stress, or if you are unable to keep track of it. It is important to note that everyone’s strategy will differ to your own. Time, size of the investment, risk appetite, etc will almost always be unique to each individual and specific transaction. Consolidating your ideas, your portfolio, and overall strategy should be a consideration.
Irrespective of strategy, it pays to recharge your batteries often. Especially in these COVID times, ensuring you take time-off is critical and necessary. It can be a struggle to step back, especially when the space moves so fast, but burnout is a real issue and it can be detrimental to both your work, and enjoyment of the space if not addressed. It’s something I’ve had to force myself to deal with as I’ve taken on more work and responsibility running a Discord, Twitter, creating, interacting, writing, following and generally keeping up with the space all collectively 24x7 takes up a significant amount my time, focus and patience. My screen-time would be shocking!!
What we are building with TBAC requires full power. I know I don’t want to miss out on this opportunity and I am committed entirely, but it’s equally important to remember that breaks are necessary and this is something I will consider doing more frequently as we kick-off 2022. The space isn’t going anywhere and neither are the incredible opportunities.
So stay informed, stay humble, stay focused, rest and recalibrate, and let’s get after it together.
Disclaimer, these are my opinions and they do not constitute formal financial advise.