SHILL Issue 78

@redacted_j
Does BMW feel like it owes me something? No. It does not. But I have one sitting in my garage. However, when I talk
with NFT creators, they often feel a sense of obligation towards holders, like they constantly owe them “the work” and
“the growth.”
What’s the difference? I’m a customer of BMW, you’re a holder of a shiny Ape. Why isn’t BMW doing twitter spaces giving
me updates all the time? Why do we demand so much of companies like DAA but not of BMW?
This is because the relationship between the holder and creator and customer and corp is different. And I think it comes
from the royalties. The holder is agreeing to give the creator the cut, in exchange for the work from them in growing the
price.
Only now they’re not giving the cut anymore. They want all the effort for none of the pay.
If that’s the case, if the cut is zero, then what do they, the holders, become to the creators? Just a customer. Just as I am
to BMW. The economics are the same. A one-time purchase, followed by a secondary sale of the NFT is the same economically
as the car market.
The holders are still making big bets on which NFT companies will provide the best value. And NFT companies still need
to provide it. But NFT companies are no longer “in bed” to quite the same extent with the holders.
So now NFT creators have a new incentive: To try to sell goods and services to the holder that the holder wants to buy.
Whatever that might mean. It’s going to be different for every community. Because if they don’t, they make no money.
Following the allegory, BMW wants their resale values to be high because it keeps their primary purchase prices high,
so they produce long-lived products. They want that rep. But they don’t need royalties to have that incentive. (Actually,
their repair bills are insane).
I think this is a better system than one where the NFT creator is incentivised to help current NFT holder find newer NFT
holders at greater price. Sure, that works for a little bit but there is only really a few NFT collections that has survived
more than a year on it.
Now, one could argue these incentives are one and the same, really, but I’d say no. Right now, some projects on Solana
move >500k a month without ever selling a single product. That’s a hell of a lot of inertia to prevent real product innovation.
If you want to see a brand really scramble, take their revenue to zero, but leave them with all the eyeballs and holders
they had before. Trust me, they will come up with some beautiful and amazing product lines that increase the value of
the brand for everybody. It’s Darwinism.
The problem is that the drive to zero isn’t happening fast. Like the frog in the pot, it’s happening so slowly that they think
they can stop it by conjuring up parlor tricks to halt the progress. By the time they realize it’s too late, it’ll be too late for
most of them.