(moved to @wieldlabs)

Thoughts on why NFTs lost to memecoins - and how another run is possible The current NFT model just isn’t competitive enough to gain mindshare. The market cap of CS2 skins alone is literally bigger than all NFTs combined. WHY? 1. Liquidity - no one wants to mint smaller collections bc 99% of the time they are “stuck” with it and cannot sell. This isn’t the same in memecoins, where even the smallest coins can get volume - mint fees all go to the creator. In memecoin land the equivalent would be a presale where all fees went to the “dev” which is the textbook definition of a rug But what about floor offers? I’ll get there shortly. For now, recognize that these two liquidity problems create a cascading effect: NFT marketplaces don’t have any real moat. This leads to a race-to-zero competition, further damaging market 2. Secondary fee - because all the mint proceeds went to the creator, the marketplaces don’t have any locked liquidity unlike a Dex like Uniswap which has built-in network effect - no moat = competition race to cut royalty fees to 0, as seen with Blur - this creates perverse incentives: everyone just churns out new collections to get mint fees, since there’s no recurring upside. This further drives away traders Now, let’s discuss floor offers: 3. Collectibility - after mint, there’s no standing buy-side like a DEX pool. Floor bids simply disappear during downturns - there’s no standard ‘trait’ for NFTs like trading card grading. Hence, there’s infinite price floor and liquidity thins even further. Compare this with physical collectibles like Pokemon cards, where the liquidity is concentrated around just the top 3 grades (PSA 8-10) TLDR: 1. Liquidity, not art, is the primary scarcity in collectible markets 2. Fee models drive creator and trader behavior. If mint fees all go to the creator buyers are just funding a sunk cost 3. Heterogeneity ≠ collectibility. true collectibility needs shared liquidity (e.g., trading cards grade buckets). Good thing is It is straightforward to solve all 3 issues by learning from Defi. I think once that happens, NFTs are poised for another run. I will elaborate my solutions in another post. If you think NFTs are due for a comeback, drop a comment. You’ll like what I’m building ^_^

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