Our industry is youthful. In terms of its actual age, Bitcoin started in 2008. We are only in 2023. NFT's are even younger. On top of this a lot of the people within the market are young. This means that we see a lot of youthful behaviour and lot of younger industry leaders. There are positives and negatives to this, as with all things. Today I am going into some of my thoughts around this.
I want to start with Nate Chastain and the Wire Fraud & Insider Trading conviction he received this week. I think this is a positive thing for our industry. A little background for those that don't know. I believe his role was head of product and he was asked to resign from OpenSea in Sept 2021. This followed accusations of him using multiple wallets to sell NFT's that had been listed on OpenSea's front page, after buying them before the front page listings.
As we now know, he did do this, a jury found him guilty. He allegedly made over $50,000 from the fraud he committed. That really doesn't seem worth it to me, I imagine his annual salary was more than that. There are a lot of potential implications from this, including that NFT's were arguably deemed as securities. Chastain's lawyer motioned to exclude terms such as insider trading because NFT's are not securities. He was convicted of exactly that. Has the precedent been set?
The most disappointing thing for me is that OpenSea asked him to resign. Why didn't they sack him. I have lifted the below from Blockworks and that says he was in violation of OpenSea employee policies. If Insider Trading isn't seen as Gross Misconduct at OpenSea what is? Or is it a mates club. We won't sack you, you can resign, just in case you get found not guilty and need an avenue for work. Either way, for me, it is a further example of OpenSea not being the responsible industry leaders the Web3 industry needs.
'An OpenSea spokesperson previously told Blockworks that Chastain’s resignation was because he was found to be “in violation of our employee policies and in direct conflict with our core values and principles.”' source. Blockworks
I want to continue on from that, not on a rant but on a discussion point and some brief thoughts on how this industry continues to develop over the coming months and years. If the latest meme token craze has shown me anything, it is how immature our market is. I know some people will see this as a negative comment, I don't see it that way.
I believe the whole crypto market is being manipulated by whales. This is why we see so much leveraged money wiped out the market on such a regular basis. It isn't just volatility. And if you think this won't happen in meme coins you are very much mistaken. Again, not a negative thing, just an observation of the entirety of the crypto market.
It's called a market and priced in dollars for a reason. It is a financial industry, just a highly volatile one that is still incredibly youthful. Not only in terms of the age of the industry but also the age of the people within the industry. For me the meme coins stem from boredom (which is where meme culture comes in) and an opportunity for value. One thing we all know is that there are plenty of people here looking to take liquidity.
We see the more negative aspects of the above backed up by too many big names. Whether that is influencers or Cryptro institutions, which I see as another sign of our immaturity as a market. I suppose when it's boiled down, it's hype. In a variety of different forms. When people are looking for the value now, that's where the value now is, it's in the hype. And this has been the case since long before Crypto and NFT's, just look at film and music releases.
Some hype is good. Good luck getting a successful launch anywhere without hype. When you look at marketing budgets for launching anything, the value of hype is indisputable. The main problem with hype is it leads to short term thinking. People start to look to pull maximum value today when potentially they could get a lot more by looking to add value today and extract value later.
The other big thing with hype for me, is that is is unsustainable and it always runs out. In a world where attention is a commodity, if you mess up your hype, if you don't deliver what you say, when you say, if you get the timing wrong. There is a real risk of losing the hype and the momentum that comes with it. And not only do you lose that momentum you potentially risk losing a lot more. If interest wanes, how do NFT Artists or Projects maintain revenue streams when their main revenue models are based on NFT sales?
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I've shared some of the reasons why I think our market is still immature but that's to be expected. NFT's kind of started in 2017 and then kind of took off a little in 2021. If it wasn't an immature market then something would be wrong. How does our market mature and what should the focus be?
I think we need industry leaders to step up and lead the way. To stop taking advantage of the potential loopholes and to act with integrity. I know this is a huge ask, but the Nate Chastain verdict gives me some hope.
Alongside the bigger market issues, there is a lot of pressure. People feel the need to be in a certain place at a certain time and quite often we have expectations that are bigger than ourselves. This pressure can drive many people within our industry to be self focused when what we really need is true collaboration. This is how our industry grows.
I could talk about this topic all day, and I especially enjoy the philosophical aspects of this debate. I guess it comes down to this. This industry constantly talks about being different or being a new way of doing finance and then acts exactly the same as the traditional finance industry. If we want change, we have to stand up, be counted and be the change we want to see.
I said there would be more images as NFT's via my blog, and there will, just not this week. I didn't realise the platform providing the service has a fee, I understand why it's charged, however I don't want you to be charged a fee for a free mint. Back to ThirdWeb as a solution, but I think I need a webiste for it to work. Either ways, I ran out of time this week to sort it. Paragraph allow you to collect my blog for a very affordable price.
I made my blog audible last week. You can listen to last weeks blog and sign up to my Spotify channel below. The audible version will not be available at the same time as my blog for now. Thank you for all of your early support with this, it's appreciated, especially considering OI tend to stealth launch these things!
I have caught up on a lot, but still a few more things to go. Polygon Alliance is moving again, which makes me happy and I am incredibly grateful to our team and our community for shouting about it whilst I couldn't. That's meaningful and powerful beyond words. The 30K giveaway has not been forgotten about and I have time in my diary for it this weekend.
I've called it a #BlogCast, listen here
As ever, these are my observations and thoughts. And please do not take this as a rant rather oversights of our industry. I don't think a short-ish blog that wants to make several points should be too in-depth and the points I make today don't explore the detail. It's my birthday next Friday (I am sure VDK would have told you if I hadn't) so it may be a short issue, not sure yet.
Thank you for reading, for sharing, for opening and just in general for being very supportive of me and my journey. I hope you enjoyed this one, I appreciate your time and I will catch you next Friday. Until then, take care.
