Talk a little bit about the “degen” world of NFT collectors. What does the expression “degen” (degenerative) mean?
So let me put it this way: the degen world is essentially a bunch of OG NFT collectors who have become extremely wealthy either through crypto or through NFT investments. And it's an echo chamber of investment, if I might put it that way.
So essentially, if there is something that they believe has value, you're looking at projects with, let's say, 5000 NFTs within them, but they're all being bought up by 10 to 20 people.
The concept of why degens are profitable is really not because they are profitable in reality. It’s all paper money. So when you have 5,000 NFTs that are being controlled by 20 of the top collectors and none of them have any pressure whatsoever to sell, anyone who wants to buy into that collection has to buy in at a very high floor price.
Now, given that these 20 collectors own all of the NFTs does this project have any liquidity in the market? No, I could do a floor price at $100,000 but it doesn't make any sense because if they decide to dump all 5,000 NFTs tomorrow they might get $5,000 or $500. So that's what I see from the degen phase and I can tell you I have never bought into any NFT degen project in my life simply because I understand the concept of liquidity.