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From Walled Gardens to Open Portals: What NFTs are and What they Promise

Ian LeViness
Ian LeViness
Welcome to all new subscribers! I’ve spent 5 years in the Cryptocurrency space, watching it grow, digging deep on its’ projects, and working for innovative companies. Now, I’m starting this newsletter to share everything I’ve learned and continue to learn. Life is a never-ending journey and life in crypto is no different. If you’re looking for insights on how the Metaverse movement and its’ related technologies improve communities and the world-at-large, then you’re in the right place!
TLDR: Here, we define NFTs, and begin to look into their deeper potential, setting the scene for future analysis of social tokens and beyond.

“Crypto is eating Web2.”
Through tokens, NFTs, and DAOs, it’s changing everything we know and experience about the internet and business at large, at a dizzying pace. If you’re not reading up on the space daily, then you’re falling far behind. While many content creators believe they’re catering to newcomers, they’re not.
Instead, they provide insights that require you to already have your feet firmly on the ground in the Metaverse. What if, however, you don’t even understand what a cryptocurrency is? What if the Metaverse is a term you’ve only heard in connection with Ready Player One?
Let’s start with who I am and what I’m about and the path will become clearer.
I’ve spent 5 years being involved in the rise of cryptocurrencies, beginning with a year and some change of strict research, and ending in just over 3 solid years of full-time work with leading, innovative crypto-focused projects. From small blogs to startups to large firms and everything in-between, on every step of my journey, I’ve focused on breaking down the basics and latest developments in crypto for a truly wide audience.
That means, in a literal sense, everyone.
Now I’m pivoting to this newsletter because I believe the world needs to know just how important the convergence of NFTs, DAOs, and Social Tokens is.
While in future issues, I’ll dig deep into the potential of all of these technologies, at this point, I’d like to start with a simple question.
What is an NFT, really?
Unless you’ve been living under a rock for the past few years, you’ve likely heard of an NFT, at least in passing. Up to this point, traditional media outlets have defined it as a truly scarce piece of art or collectible and on the surface level, they’re right. Like Bitcoin or Ether, it sits on a blockchain, but unlike them, it’s not freely exchangeable for others of its’ kind. Instead, each NFT is unique, like a bonafide, new painting being painted, each time one is sent out into the world.
Though digital art has ruled the NFT space, playing a major part in a rise from $64 million to $774 million in market value, it’s not the be-all, end-all. It’s simply the wrapper for a greater masterpiece.
When you dig deeper into both the key features of an NFT, you begin to understand why.
To do that, however, we need a point of reference, i.e., a project that illustrates well what NFTs can do, beyond making any digital art and any other digital creation provably scarce and instantly tradeable.
Consider my Twitter avatar or “PFP NFT.”
It’s a dinosaur with a few unique features, such as the color purple, a headband, and one eye shut, while the other remains open. It’s also an NFT, since each dinosaur from its’ respective collection, is different and its uniqueness can be proven on the blockchain.
Being unique equals “non-fungible” in this case, since these dinosaur “tokens,” can’t be freely exchanged for one another, like, for example, US Dollars or Euros. Though the art is interesting, well-done, and randomly generated from a list of all sorts of traits, it’s not where the true promise of these dinosaur NFTs lies. It’s merely the tip of the iceberg.
If you go to the DinoMonks website, you’ll find a vision, or in the words of Simon Sinek, a compelling “why,” that structures a community around the project’s NFTs. One sentence, in particular, stands out. “This is an owner’s mental wellness retreat in the Metaverse.”
Think about that for a moment. What does it mean to you?
If an NFT is a unique piece of digital art that you own and that NFT gives you access to a community of individuals who are all interested in a common vision, then you all, in turn, own a piece of that community.
In fact, sticking with the DinoMonks example, you’ve built it together, from the outset.
Think of your Dino NFT as both provably scarce digital art and a member pass to a community, and you get the picture on the macro level. NFTs are funds raised via Kickstarter, the perks that come with them, and a perpetual stake in the future business that comes. In DinoMonks’ case, that business is all sorts of initiatives that lead to better global mental health and wellness.
The sky’s the limit in this respect. It all depends on where the DinoMonks community decides to take their vision. The Bored Ape Yacht Club is a working proof-of-concept of an NFT community that has already done a great deal to bring themselves beyond being mere digital art enthusiasts.
From dedicated merchandise to new NFT ventures, to selling their NFTs at Sotheby’s, to even Venture Capital firms, BAYC members have gone on to build all sorts of businesses that in turn, lend collective value to the BAYC ecosystem. It’s all network effects. The more value that’s built around the club, the more people want to be involved in it and the more valuable the aggregated BAYC ecosystem gets.
In some ways, it’s similar to a social network, except it’s owned by its’ members. In other ways, it’s like a startup accelerator except the acceleration was propelled by the art itself.
But wait, why is the Bored Ape Yacht Club so valuable?
Those still outside of the crypto sphere, it can be hard to understand how a collection of 10,000 unique digital portraits of apes could now be worth a minimum price(floor price) of 40 Ether(roughly 124,000 per ape at the time of penning this post).
Truthfully, however, it all comes down to two key value drivers.
First, their initial growth was propelled by NFT whales, which refers to traders/collectors who make it a habit of buying a very large amount of certain digital art projects as they launch because they believe these projects will be worth a lot more down the road. According to the Defiant, one collector, in particular, Pranksy, purchased about 1000 apes at the time of the project’s launch.
Since the NFT market is even more thinly traded than the cryptocurrency market itself, it stands to reason that such a purchase could have an outsized effect on the project’s growth.
After the launch of BAYC, NFT sales volume hit $2.4 billion, but next to Bitcoin, that’s a speck of sand in an ocean. Today alone, for example, Bitcoin’s trading volume hit over $30 billion by 4 AM EST.
In other words, based on trading numbers alone, it’s still early for crypto, and it’s even earlier for NFTs.
Still, Bored Ape Yacht Club and other projects like it continue to rise. In BAYC’s case, this is because it has true utility beyond the art itself. As one well-known NFT collector and early BAYC member, going by the moniker, OHHShiny puts it,
“They had this wonderful backstory they developed on them that I could relate to, someone who likes to have fun and be social, and their art was wonderful on the website…It was enough, especially with the roadmap, where I knew that they were thoughtful. It wasn’t enough for me to purchase something. To gain conviction, I actually had to talk to someone who’s a part of the team, so I messaged the founder and they immediately messaged me back and we got into a conversation about how they felt they would like Bored Apes to grow and how the idea came about and that really gave me enough conviction.”
In short, to buy into Bored Apes, he felt he had to look beyond the hype and understand the deeper meaning behind the project. Was it just the art or was a culture being built akin to that which Apple has cultivated since the beginning for its’ users?
To put it simply, Bored Apes’ greater why was “you can opt-out of traditional society and join an elite social club of people following their passions who support each other.”
With that, people bought in, in droves.
And they’re still buying in.
DinoMonks: The Power of a Compelling Why
In my humble opinion, DinoMonks has a similar kind of potential to Bored Apes, not in mere dollar gains, but in the why, or the culture being built inside the community.
Lifetime access to valuable resources for improving your mental health and overall wellness. At this point, what that translates to is a series of Discord channels where meditation, yoga, nutrition ideas, and overall support are shared, plus a channel where speakers come and present on various wellness related topics, such as: “how decision-making can have an impact on our mental health, and how we can improve our decision making abilities to improve our lifestyle and our overall mind-state,” from the viewpoint of a well-known behavioral scientist.
While DinoMonks is much more of an earlier stage project, it holds an immense amount of promise due to just how easy its vision is to get behind. Who doesn’t want to champion better mental health for all in an age where all technology seems to be doing is denigrate it? Such an initiative helps not just the members of the community involved, but the world as a whole if it’s done right. As we continue to lay the groundwork of the greater potential of NFTs with more examples down the road, you can expect me to dig further into DinoMonks as well as many other projects.
The idea is that I’ll paint as comprehensive of a picture of the space as I can so that you can make your own connections, which lead to your own hypotheses about the future of NFTs.
With regards to DinoMonks, I’ll leave you with a question.
Isn’t it important to do all we can to erase the stigma of discussing mental health?
What NFTs are Not
Let me pause here before we continue down the NFT rabbit hole to make one thing crystal clear.
None of this means that an NFT is a security, at least not if the project it’s tied to follows a certain path.
US regulators have made clear that they will continue to evaluate whether or not something is a security, using the Howey Test. In case you’re not familiar with it, the key point it states is that if there is “an investment of money in a common enterprise with the reasonable expectation of profits to be derived from the efforts of others,” then the investment in question is considered a security.
To me, if NFT projects focus on the “why,” and avoid ever using any sort of marketing, or wording at all that promises profit, why should they be considered as securities offerings? What they’re doing is simply redefining the way businesses take shape and are governed.
Instead of an elite group of executives leading the business, the consumers become its’ stakeholders as well. Though not all NFT projects follow this form of leadership, they should and that’s something we’ll get to in future issues as well, once we’ve established the importance of skin in the game, and looking beyond simple token voting. For now, however, consider this: if a project never even hints at a promise of a profit and you buy its’ NFT because you like its’ vision, is it the same thing as buying a stock?
My answer is this: it’s not a security, but it is a vote. Think of an NFT as a piece of a business, decoupled from the promise of future gains and you’re following the same line of thought that I’m following.
NFT communities are collectively owned and collectively managed(ideally). So, the art acts as a VIP pass, for a lifetime to whatever the community creates, as long as you hold it and don’t sell it.
Taking NFTs Further: From Walled Gardens to Open Marketplaces
Once you understand the foundational, three-fold definition of NFTs as digital art, access tokens, and a vote, then you can begin to see all the possibilities for them, beyond flipping pieces of digital art for a profit.
All in all, the deep potential of NFTs lies in their usage as both keys to communities and the points that connect us, instead of keeping us in the walled gardens that divide us. As Google, Facebook, and the other legacy web or “Web2” leaders continue to peddle products that place us in algorithmically defined bubbles based on our online habits, NFTs, and crypto at large will eliminate the divide, first bit by bit, then in an avalanche.
That encompasses my entire thesis for the Crypto movement and the growing “Metaverse.” If you’re still not sure what the latter term refers to, think of an online world in which collaboration rules, and you can create an entirely new identity for yourself.
I’ve been consulting with two projects with highly compelling use cases for NFTs and the Metaverse, one of which plans to launch its’ initial drop this month. If you’ve considered the possibility of using an NFT as an access key to both a physical and digital community at the same time, then you already grasp the general potential of one of them. As these projects continue to take shape, I plan to bring them into my analysis. This weekend, I plan to begin to dig into social tokens and how they compare to NFTs and give us a window into the future of creator-driven communities.
Looking Ahead: Defining Social Tokens as a Market Driver
For a preview, I’ll leave you with this quote from Rex Woodbury, who runs a fantastic newsletter called, “Digital Native,” centered on the intersection between people and technology.
“The system is broken: economic value is captured by executives, rather than by creators and their fans. This is an outdated structure and remnant of pre-Internet power dynamics. Fans and fellow creators want to invest in the people they believe in.”
Social tokens are the vehicles through which they can do that.
Think of the launch of a social token, not as an Initial Public Offering, but as Woodbury says, “an Initial Person Offering.” A cryptocurrency, such as an ERC-20 token is launched using a smart contract and every single unit of it represents a share in the creator’s past, present, and future successes, depending on how the person defines their token.
With both NFTs and Social Tokens rising in popularity, the strangleholds of intermediaries such as art galleries, record companies, book publishers, and even venture capital as well as other investment firms are dissipating.
Direct connections between creators and fans are becoming the major forces that drive markets.
Next time, we’ll dig into that and more, including a quick refresher on how smart contracts work in the context of launching and maintaining cryptocurrencies. Please do share your thoughts on all the above and if you liked what you read, subscribe and re-tweet so the Blockdemic Lab can get a wider reach!
Better yet, just send it to a friend!
My DMs are always open and I always enjoy connecting with crypto enthusiasts and those who are just curious about crypto. If you don’t use Twitter, you can also email me at blockdemiclab@protonmail.com.
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With all of the above in your newsletter arsenal, you’ll find yourself well-armed with regards to macro-business trends, crypto trends, DeFi, the Metaverse, the future of money at large, and mental models you can use to do what you do better.
Special Thanks to:
Sahil Bloom, Raphael Schön, Kat Dolzhenko, my parents, and my wonderful partner, Kate, for pushing me to go above and beyond.
Disclaimer: You should not treat any of this as financial advice. Since I began here in the crypto space, I’ve merely been trying to educate people on the promise of cryptocurrencies and all of their related technologies. Any investment you make should be made of your own volition, with your own research in mind. I do own two DinoMonks and I shared this project here because I believe in its’ vision. Do not treat my mention of this or any other project as an inducement to buy anything they offer. All of my content is always for educational purposes only. Finally, I am not a lawyer or financial advisor and my mention of the Howey Test is simply my own personal opinion of it, related to my experience working in the cryptocurrency space. Do not treat my opinion as a legal opinion. None of this content was made at the inducement of any of my clients, but simply to share my views with the world.
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Ian LeViness
Ian LeViness

Writing about the deeper value behind NFTs, DAOs, and Social Tokens+ how all of them re-define community.

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