The NFT downturn spurred on by the broader cryptocurrency crash has a lot of people worried, and some delighted. But what does it really mean and should those invested in creating and collecting NFTs be worried?
Badfoot, aka Jack Davidson, the founder of NFT success Skullkids says, “no, I don’t think NFTs are dead. No.” This comes after the reported NFT crash has seen transactions drop by 92% since this time last year, though these stats are debated. Non-fungible tokens are a way to create rarity in digital files by registering them on a blockchain, you can find out how to create an NFT for free in our guide.
Davidson is currently launching his latest NFT project, Skullkids: Generations, and is buoyant about the state of the market. His view is clear, the recent Yuga Labs sale of Otherdeeds NFTs burnt $ 300 million of Ethereum out of supply and many people “got burned in the gas wars,” and this means the market needs time to “take a breath and have time to recover “.
The successful NFT artist, who turned his graffiti art into an NFT art empire, says “This place is volatile as hell [and] negative energy is easier to be contagious than positive energy […] people want to see the world in flames. People want to see chaos happening. “
He says the last two weeks have been some of the most successful in his time creating NFT art. Which marries with other projects such as Moonbirds. Davidson has some rules that determine if an NFT will succeed, including maintaining a good community, offering utility and value alongside the art, and being open and honest about what buyers can expect.
“When I see people’s expectations not being managed, that’s because the sales team or the team behind the project sucks,” says Davidson. “If people come in here spending thousands of dollars and expecting ten-times their money overnight, like, that’s probably not going to happen anymore.”
Davidson’s optimism for NFTs isn’t dampened even as he tells me he’s lost money in the current crash. “Like, I’m down this week, I’m down so bad, but I know it’s the nature of the beast and I’m not worried about it,” he laughs. “You have to have an Iron Stomach to come here.”
Fundamentally the future of NFTs could lay in a realistic approach to this art, and newcomers should not expect to get rich quickly overnight. Davidson’s best advice is to manage expectations and support artists that have clear and attainable roadmaps, as over time these will hold value.