Navigating Influencers In The NFT Space
Who you can trust and why
Year for the ages
This has been a crazy 12 months in NFTs. Sales volume on OpenSea has skyrocketed from $3.5 million in December 2020 to $3.2 billion in December 2021. That makes for an astronomical increase of ~91,000%.
One of the side effects of such insane growth is the rise of NFT “influencers” on Twitter. A good number of people have gone from little to no followers to amassing tens or even hundreds of thousands in a span of less than 12 months.
These people come in many different shapes and sizes. Some are more likely than others to have your best interests in mind. What I will attempt to do is describe the different types and share the unspoken context you should understand when digesting their tweets.
Water cooler of the metaverse
NFT collecting is the most fun and engaging things I have ever done. It’s also daunting for beginners. There is so much to learn before you feel comfortable making decisions on your own.
Enter NFT Twitter. The default water cooler of the metaverse. With such large sums of money sloshing around, the stakes are high. For every bit of genuine educational advice, motivational platitude, or hilarious shit post, it’s possible you come across a rug pull, pump and dump, or deceptive promotion.
On the path towards clarity on that front, let’s start with some definitions.
NFT Influencer: For the sake of this piece, NFT influencers are twitter accounts with more than 50k followers that focus predominantly on NFTs. Their opinions carry significant weight when it comes to buying and selling particular NFTs. They quite literally influence the market. I posit they come in 4 main varieties:
Pure Collector: for lack of a better definition, Pure Collectors are influencers that neither directly market products, nor create or build. They invest money for the joy of collecting and in search of portfolio appreciation. Within collectors there are flippers, holders, and every combination in between.
Flippers operate on a short term time horizon. While they sometimes get a bad rap, they do provide necessary market making functions for the ecosystem. Holders operate on a long term time horizon. They invest in projects early and rarely ever sell. Many people deploy a strategy combining these two approaches.
Marketer: one of the beauties of web 3 is that everyone becomes a marketer when they have an ownership stake. However, there are some people looking to more directly sell you things in one form or another. They may take money to promote projects, play a “community” role within a project, serve as an “advisor” or “consultant” that gets a cut of the mint revenue, or sell their time in the form of a paid group or discord.
Creator / Builder: this category is made up of artists, developers, and founders or employees of projects or companies in the space. They are the lifeblood of the space and the reason we are able to collect what we love in a frictionless global marketplace.
Hybrid: combination of the Marketer and Creator / Builder category. Often times they are involved across a variety of projects as investors, advisors, consultants, or “community” aka marketing roles.
Where the chips fall
Slotting influencers across these categories was extremely difficult. Movement across them can be fluid based on as little as a single tweet and I have limited information. It’s also highly likely that I have inadvertently left people off and for that I apologize. It goes without saying that there are good well intentioned people across all categories and each one serves a necessary function in the space.
Unspoken context
Pure Collector
Rarely does anyone tweet about a project before their bags are already packed
You likely will not hear from them before they sell those bags
Long term holders are more likely to share your interests than flippers as they will not be selling their position anytime soon
Everyone will be quick to remind you of their winners, but rarely do you hear about the losers
The more followers someone has, the less likely you are to benefit from their advice on particular projects as others will have already beat you to it
Marketer
Marketing is a vital function in the space, but not all ads will be properly disclosed
Not all relationships to projects will be properly disclosed
They do not care whether prices goes up or down because they are getting paid either way
They are often privy to insider information, whether good or bad
Creator / Builder
Artists will do self promotion, which is fine since you know where it’s coming from and they have an incentive to add value to collectors
Builders will be biased towards using their own products or services whether or not it is the best option available
People in this group will often support their close friends when it may or may not actually be a good investment
Think before you ape
As with most things in life, everything comes down to incentives. That is especially the case when considering who to trust and when in the NFT space. If you keep that in mind and always do your own research, you are much more likely to come out ahead in the long run.