How long has it been since you last opened OpenSea? The three major factors causing most NFT projects to falter in a bear market.

As the crypto market enters a harsh winter due to negative news such as institutional liquidation and overall economic conditions, the NFT market has seen a significant decline in prices for most projects, along with various bear market satire projects. Additionally, since many NFT projects are priced in ETH and SOL, the paper assets of many NFT investors have also shrunk. While the price drop presents opportunities for bargain hunting, for most NFT projects, the prices may never return to previous levels.

NFT researcher Giancarlo shared his thoughts on NFT projects with roadmaps on Twitter. This translation and summary of his content are provided, with the original text taking precedence in case of any discrepancies.

1/ The state of roadmap NFTs going forward and why it’s about to get worse

— Giancarlo (@GiancarloChaux) June 19, 2022

The Reasons Why Most NFT Projects Will Perform Worse

Over the past year, many popular NFT projects have outlined their future plans, which Giancarlo refers to as "roadmap projects," likening them to "startups" that use NFTs to expand their brand through fundraising.

However, despite being described as startups, Giancarlo believes that these projects do the opposite of what startups typically do, with investors and collectors bearing the consequences. Here are a few reasons why these roadmap projects are expected to perform worse in a bear market:

1. Lack of Clarity in Fund Utilization

Unlike typical startups, these roadmap projects lack clarity in fund utilization. Creators often receive 50-90% of the income, making them quite wealthy immediately after the project sells out, leaving very little funds for the project to utilize.

In addition, these teams may not be adept at managing their assets. Since taxes are calculated based on the initial receipt of ETH, they may even end up in debt if ETH experiences a significant drop.

2. Inability to Sustain Income

Aside from selling more NFTs, these teams are mostly unaware of how to sustain income.

As secondary market trading volume decreases, royalties will gradually diminish, with no signs of immediate recovery.

3. Lack of Accountability to NFT Holders

Lastly, and most harshly, NFT creation teams have no fiduciary duty to uphold, meaning they can leave without taking any action.

Traditional startups have long-term incentives such as lock-up periods, founders not becoming wealthy yet, which roadmap projects lack.

The Fate of NFT Projects in a Bear Market

To sum up the above arguments briefly: the creation teams receive a large amount of funds in the early stages, affected by the drop in ETH, they can reduce using the remaining funds. Not only do they lack income and means of making money, but they are not accountable and can leave at any time.

Giancarlo assumes that if a current NFT team needs to spend $50,000 per month to maintain the project, but the roadmap is not working, and Discord is filled with complaints. At this point, the team has two choices:

1. Stick it out until the money runs out
2. Say "I tried my best" and walk away

Giancarlo believes most teams will choose the second option, leading to a wave of project closures or transferring power to the community. The NFTs from these projects will ultimately lose their collectible or meme value.

Except for those high-profile projects with ample funds and a better understanding of generating income, the majority of mid to low-level projects will face the aforementioned crisis.

"Even though these NFTs may seem cheap now, unless they have a clear profit plan in the short term, most teams will either spend all the money or keep the remaining funds. The primary concern for any roadmap project should be about funds and development direction," Giancarlo concludes.