If you ask anyone today, why a certain asset has value, they’ll point you to many things :
Best product/service out there
User growth is sky-high
Revenues are growing at x% per quarter
Made by X artist/celebrity
X celebrity/influencer is getting into the project/buying
In theory all valid points, but they all lead to ONE THING…
COLLECTIVE BELIEF which is lead by human perception
Assets are only valued as such because a group of individuals collectively believe in the value of these assets.
A value “proposition” is just a proposition because it’s based on a judgment or an opinion, not as a definitive factor to valuation.
This is true for NFT and for everything else honesly.
Money/Laws/Behavior/Value… It’s all literally something human are imagining exist.
They don’t. Take away humans, none of these exist.
Human’s perception of value is value.
Why is Axie Infinity (AXS) worth 7 778 190 174 $US ? Yes sure they came in first, they are building great stuff of course, but at the end it’s worth more than $7 B because people collectively believe in this particular project/brand.
Some assets have more value props than others, and to simply put, that just makes it easier to convince others that the asset has value.
Whether it really has value or not depends on whether individuals collectively believe it has value.
Belief can stick around or it can change very quickly.
Again, take for example our best friend & worst enemy : pumps and dumps…
They happen because people collectively believe the asset has value with little conviction, and when they see the value of the asset plummet, their belief in turn collapses.
So how do we find the next 100x NFT/Crypto project ? The goal is to look for investments that have high conviction individuals believing in the value of these assets.
But that’s not enough, you also want to find assets where the growth of high conviction investors will increase overtime.
You want to look for assets that attract high conviction investors, OR look for teams who understand that belief drives value and will seek ways to long term collectively increase the belief of their community and investors.
Certain projects like Larvalabs punks have done so well because first-to-market and high status individuals buying are strong value props to creating and attracting high conviction investors. Likewise, CyberKongz robust ecosystem has a similar effect in a different way.
Believe in people who understand this concept or buy into projects that naturally have value props that attracts and creates high conviction investors.