When CryptoKitties was released, it was completely absurd to me. “Wait, a second,” I thought. “So, does that mean that this JPEG could have sex and have a baby JPEG?” Say what?” When CryptoPunks started out in 2017, they seemed silly to many. They were just 128 X 128 pixels. It’s irrelevant. They were not really popular until Gary Vee, a mastermind call , told them, “Crypto punks are going to become huge. Go get some.”
Bored Apes launched his project . at the same time Gary. They got together big influencers and said, “Let’s get those.” The prices rose over the years. At one time, these cost 2 Ether (ETH). It was quite a bit back then. Now the floor is like 80 ETH. These NFTs, CryptoKitties and CryptoPunks, all made huge bucks.
When I chatted with Gary early on in 2021 when he was thinking about NFTs, we discussed launching on Wax, which is a blockchain specifically for NFTs. It’s WalMart for NFTs. NFTs on Wax are cheaper than Ethereum. Gary would go on to do a great job raising $90 million on his own putting them on ETH. It is a huge drain. I don’t like the ETH gas fees so much.
I started to see the implications of what could be with NFTs. Many people view NFTs as images. They are just JPEGs. NFTs can unlock a variety of experiences for you. NFTs are the next step in digital rights management. Essentially, your NFT can be video, images, text, audio, links, AR, VR, 360 video, and they can be a combination of all of those. You can unlock certain places based on your geo-proximity.
An NFT can also evolve over time. A baby NFT can be created, possibly as a small egg or baby NFT. This baby NFT then becomes a baby dinosaur. The baby NFT can then turn into a toddler dinosaur or an adult dinosaur. It can also mate with other dinosaurs to create a baby dinosaur. It repeats the process. The more valuable a dinosaur or lineage of dinosaurs is, the stronger it is. There are many real-world applications for this technology.
There’s also more utilities for NFTs. You might be able to go backstage at a concert if you have this NFT in you wallet. These NFTs can be used to earn loyalty points. You can get something from a band that comes to your area.
An NFT is basically a programmable smart contract that can do anything you can imagine. It’s more than a JPEG. It is proof that you own the item. NFTs are still a relatively new topic.
When you have an NFT you now belong to the community of NFT holders. You can see all the NFT holders on the blockchain. You can also drop them something. These communities work best as DAOs.
A DAO is a decentralized autonomous organization, which has no employees, no boss, no headquarters (physical location), no place you can call up and talk to somebody to complain. It’s a DAO, sorry Karen.
Code manages a DAO. Let’s assume there are three DAO members. Each of us has the right to vote, and can participate in the DAO because we each hold the NFT. That organization can have us participate in its governance. An NFT is not required for every DAO. A crypto token is not required for every DAO. You can vote up to a certain amount of tokens if you have X number of them. You can also get a certain NFT, or a certain amount of NFTs to have a certain level of voting power. This is a reliable voting system that governs an organization like none other.
These types of organizations won’t have just three people in them. These organizations will be home to thousands. You will have more voting power if you are associated with a particular NFT in such an organization. This will correlate to your NFT holdings (either a specific NFT Tier or the number you own). DAOs are a completely different organization from traditional hierarchies that have an employee, a manager and a director. A VP, a president and a CEO may be included. None of these exist in a DAO.
A DAO is an organization that is governed by code and not leaders. This is a paradigm shift, especially when you consider that algorithms and smart contracts are replacing traditional corporate structures. They can be self-executing in many ways. If this happens, then this.
Smart contract should be automated and follow certain rules. Smart contracts are useful for freelancers who need to complete work for clients. Imagine if the smart contract automatically generates and executes the work, and you get paid instantly. How great is that compared to having to wait 30 days for January in accounting to finally get to you thirty plus days later?
Currently, the biggest platform for NFTs and DAOs is Ethereum. It was the first platform for smart contracts to be built. Code can be executed based on what you put into the contract. This eliminates many of the problems that are common in the digital world. It removes trust and intermediaries. Smart contracts will be required by most businesses to allow them to operate their business.
A DAO is secure because it’s programmed into the code and on the blockchain. We know which NFTs and tokens are which, as well as the voter to which they correspond. It’s undeniable, it’s trustless. It is the future of voting in organizations.
A driverless car acts like a DAO. It is autonomous and can drive around the city on its own. It can be directed to go to a specific location. It will follow your instructions and keep you safe by monitoring the road. All managed by code. It will follow your instructions as long as the code is clear. NFT projects can benefit from the DAO’s community component. The project is open to collaboration and contributions.
If you are going to create a DAO make sure you have the right legal governance framework. AndreessenHorowitz has a DAO legal framework you can learn from. You can find it here.
Roadmaps are important. Utility software is important for NFTs. Even if you create an NFT series and the art is cool, very few people will be interested. A roadmap is a way to show people that you have a long-term plan for your project. A roadmap shows that you care about the project, that you have long-term goals and that you are not just looking for quick cash. Many of these NFT projects can be viewed as quick money grabs. People see other people making millions of dollars with NFTs, and they want their share. This is not good for the community.
A plan shows quarter-by-quarter where the project will go. This is what we did in Q1. We’re doing this in Q2. Guess what? You’re not going to believe what we’re doing in 2023. Your community will see that you care about where you are going and have some ideas. Sometimes, very legitimate projects can get huge audiences and sell out. They took the money and ran. They are terrible. The big NFT projects in 2022 will have roadmaps.
Projects will have a roadmap. They’ll also have utility beyond their artwork. Already, we are seeing NFTs that have better capabilities than their predecessors. The idea of NFTs fitting into the metaverse is gaining popularity. They will be more than just a profile photo, as many NFT projects have been.
Note for investors
If you’re an investor, only invest in NFT projects where the team is known and has doxxed themselves. If you go to the social media profiles of individual team members, you can see that they are active and visible — this includes executives and lead developers. The marketing team, for example, is also visible. Many current NFT projects use fake names and avatars. I think that will change.
Whether you are investing or launching a NFT, you don’t have to be familiar with every NFT. Take a deep breath. You might not find many relevant to your business model and business. There is an element of loyalty and ownership that can engage many-an audience, so don’t miss this opportunity.
This article does not contain investment advice or recommendations. Each investment and trade involves risk. Readers should do their own research before making any decisions.
The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Travis Wright is a top marketing technologist, author, keynote speaker, blockchain advisor, tech journalist and growth hacker. He was the Symantec Norton’s former global social and digital strategist. Wright is the author of Digital sense: The common sense approach to effectively blending social business strategy, marketing technology, and customer experience. With Joel Comm, Wright cohosts two of Apple’s top 100 ranked business and technology podcasts, The Bad Crypto Podcast and The Nifty Show. Wright is a member of the Wax advisory panel.