FutureVerse, the company behind the FLUF World collection, and partnered with the Cool Cats, recently released their "FutureScore" system which rewards collectors with points for holding NFTs and engaging with the ecosystem. These points will be used to distribute tokens for their new Layer One "The Root Network", although truly they could be used for rewarding community members in many ways, including access to drops, events and more.
While the specific algorithm isn't public, there are points awarded for holding each of the items within each of their collections, with bonus points available for item rarity and length of holding. And possibly diminishing returns for holding multiples of some NFTs.
As a long-term collector of assets within the FutureVerse ecosystem, I was initially disappointed to learn that it didn't give you points for rare assets that you no longer held, even if you had previously held them for a long time.
To provide a real world example, I minted one of their Burrows for 0.22 ETH a year or so ago and revealed the rarest tier which was initially selling at 22 ETH, an overnight 100x. I held on for longer than I personally should have. While I was comfortable minting at .22, there is no way I would have bought the same asset for 22 ETH at the time. However, I held the asset as the floor continued to fall and ended up capitulating when it reached about 5 ETH a year later. I had hoped that I would at least receive points for the time spent holding one of the rarest tiers on a collection but because I no longer held it, I go no points. Frustrating.
However, once I got over my selfish disappointment and thought about it more, tokenomics and points systems in general are based around incentives and the FutureScore is a longer term system for rewarding holders. In reality, I should have sold the overnight 100x from the example above, that is fully on me, and it would have been a great win as part of the journey. Those that were buying outright at 22 ETH are far more likely to be in a position to hold that same asset for the long term. If I had received points for holding a rare asset for a year, that I ultimately had to sell, they would be incentivising holding assets that you do not plan on holding (collecting) for the long term and would be encouraging people to trade in and out of their rarer assets in order to gain points for time previously held.
At the same time as minting the rare Burrow, I also minted one of the most common tiers. Over a similar time period, this has gone from an initial mint price of 0.22 ETH to .17 ETH, so has still experienced a drawdown. However, the starting point was much more appropriate to my actual risk profile, so I am quite happy OK having paid more than it currently costs to own that asset to hold for the long-term. As such, I will be rewarded with points for still holding that asset and should be rewarded with a bonus for time held since mint.
Most NFT traders active within the bull run have some regrettable purchases/holds etc. It was a crazy time with many projects dropping daily and prices frequently multiplying overnight. But call it what it was, it was a speculative mania. If we want the market to be more than that, rewarding of high risk holding is probably not a net positive for the health of the overall ecosystem.
To quote one of the bigger names in the NFT community:
"Buy what you love, in quantities you can afford, plan to hold forever"
For companies that are following the model of multiple gamified collections, I think the FutureScore is an interesting mechanic to encourage more responsible collecting from holders. If people are buying as collectors, they are rewarded for buying NFTs at a rarity and price point they can afford to hold for the long term. And if people are buying just for points, they are forced to make a decision about buying at a price point and level of rarity that they are comfortable holding for the long term, and possibly forever. And at the same time it avoids providing extra incentives for airdrop farmers to lever up and trade in and out of rare assets for periods of time to get bonus points while pricing out the true NFT collecting community.
And yes, we're calling it "NFT Collecting". Even if you are buying with the intent of selling for a profit. This is an important distinction because the majority of NFTs right now are digital collectibles, not financial instruments, even if some people treat them that way. They exist in a largely illiquid market, currently embraced by a niche community of web3 collectors and traders. While it may have looked like they had broken out into the mainstream for a while, this was largely driven by a speculative bubble where the majority didn't care what they were buying as long as "number go up". This is no longer the case, so NFT collectors need to be clear on why they are buying something.
Does it offer some utility?
Does it provide access to a community?
Does it provide access to products?
Is it a trade with a clear thesis to profitability?
Is it an asset you can use in a game?
Or is it simply art that you'd like to appreciate in a digital wallet/gallery?
Whatever the answer, the FutureScore model seems to be a novel way to reward the true collectors and holders within the community.
