How are NFT projects sold ? NFT Marketing + Community Examples
I wrote a blog post about why people buy NFTs before. In this blog post, I want to talk about how prices are determined for NFT projects and how they are sold from A to Z!
What is an NFT?
I know we repeatedly spoke about this, but I will say it again to set the foundation here. The word NFT is the short form for Non-Fungible Token. NFTs are tokens that we can use to claim ownership of a unique digital asset. These assets can be music, digital arts, and even virtual real estate space. These digital assets can only have one owner at a time and are secured by the Ethereum blockchain. This is possible because of the technical capability of blockchain.
We all have heard of people making millions of dollars selling their NFTs. But how are the prices decided on these digital tokens?
How is the price decided on an NFT project?
One interesting thing about NFTs is that it is a digital asset without a tangible, physical product.
So the price of NFTs purely depends on the relationship between demand and supply. What this means is that the price of NFT is driven by how many people want to own this one unique piece of art. This can depend on peoples’ emotional attachment to the project, or to the creator. Others may also look at this from a transactional perspective like investing in an art project that one believes will go up in value to flip in the future. But even then, this investment decision will come from the investor's emotional bet. So in short, what drives the price of NFTs is the amount of “hype” it can create around them.
What does it take to create such a powerful hype?
One good example is Twitter's founder Jack Dorsey’s first-ever Tweet NFT being sold for 2.9M dollars. The story behind this NFT was a perfect one. Today, everybody knows Twitter, and the fact that it is the first-ever tweet from its founder as an NFT is a piece of digital asset many would find interesting therefore it ended up with the price it did.
But not everybody is a co-founder of a billion-dollar company. So how would someone know if a digital asset will rise in its value or at least hold its value in the long term?
Many NFT projects today try to keep the momentum around their arts by building community and social media following and partnering with celebrities & influencers.
Bored Ape Yacht Club is one great NFT project example of this. This NFT project successfully created the massive “hype” initially from launching the project at the right timing (in the middle of the NFT buzz peak) with the right kind of attention-grabbing “cool” looking ape character that can be easily turned into a subculture; then the project started gaining more traction and incentive since many celebrities started owning the piece of Bored Ape Yacht Club art project.
Other celebrities who own the Bored Ape Yacht Club NFT project include but are not l