pupupupuisland | Still dreaming of getting rich quick with NFTs? Decrypting the media's understanding and myths of NFTs

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Stories of NFTs with Hundredfold Returns Every Day, but Is It Really Profitable?

In recent months, whether on Facebook, Instagram, YouTube, or major media outlets, there are abundant news about internet users making tens of millions and achieving hundreds of times return with NFTs. Many big brands, businesses, and internet celebrities have also been launching their NFTs, with even a simple JPG headshot starting at tens of thousands of New Taiwan Dollars, claiming that this is the ticket to entering the metaverse in the future.

This has led many newcomers who just started with NFTs to easily harbor some unrealistic fantasies and expectations, thinking that simply buying an NFT can lead to financial freedom. They blindly follow the recommendations of "big shots," "celebrities," and "chat groups," only to end up being the ones left holding the bag.

Before FOMO, Seriously Consider the Source of Information - Who, When, Why

On social media, various chat groups and big shots recommend dozens of "hundredfold projects" every day. What we lack as readers and listeners is never the information, but the ability to "interpret" the information. Therefore, we have compiled some common "myths" from three perspectives of the source of information - Who, When, and Why. We hope that next time before FOMO, you can think more carefully about the meaning behind each piece of information and develop better media literacy.

1. Selling Your Products Using Other People's Success Stories

Many project parties or big shots will "freely" share some successful NFT stories, citing examples of Crypto Punks and Bored Ape, telling you how these projects were cheap and unpopular at the beginning, but now each one is worth tens of millions. Then, the conversation shifts to promoting their own NFTs.

However, the innovative concepts, technological applications, and the spontaneous power of the community proposed by those projects are actually where the unique value lies. Now, even your grandma can easily list and sell NFTs, can you really replicate the concepts proposed by others a few years ago?

2. Only Sharing the Successful Cases, Ignoring the Failures?

Looking back at the investment stories shared by NFT big shots you follow, do they only share successful profit-making cases? Then there are three possibilities: 1. They are truly investment geniuses who never fail. 2. They don't want to admit it for the sake of face. 3. They cannot learn from mistakes, identify issues, and improve next time.

Even if their track record looks like that of an investment genius, there is also a possibility that luck played a bigger role. Currently, there is no statistical data that can tell us how many of these hundredfold profit stories are based on analysis and judgment, and how many are simply due to good luck. In this highly volatile and chaotic market, often doing thorough research may not guarantee profits like stumbling upon a rare edition in a blind box. Even if out of 100 investments, only one project earns a thousandfold profit, it's enough to offset the losses of the other 99; but not everyone has enough money and luck to bet on that one percent.

3. Does Buying More Mean More Confidence? The Percentage of Funds Invested Is Key

Many people come across a new NFT project through recommendations from friends or big shots. Seeing someone buy dozens at once may make you think it's highly favored, and you might rush to invest heavily without evaluating the funds and risk management.

If a big shot with 100E spends 0.1E to buy 10 tokens, it means they have actually only invested 1% of their assets, taking on 1% of the risk, sacrificing 1% of liquidity, and even if they go to zero, they can still walk away. But for you with only 1E, buying 10 tokens is like gambling your entire investment; even if it grows slowly in the long term, these months could mean being completely trapped, with no liquidity in assets, and missing out on better investment opportunities.

4. In this Transparent Blockchain World, Does His On-chain Record Match What He Says?

The reason why blockchain can break the limitations of the traditional art market is that all information on the chain is public, transparent, and tamper-proof. Therefore, you can check if the "big shot" you follow discloses the wallet address they use for transactions, and you can look at their transaction records on Etherscan or see their bids, auctions, and transaction records on OpenSea.

They may give a lot of investment advice on social media, claiming each one is a hundredfold project, but they might not take action themselves; or they enthusiastically recommend a project to you, but only buy one or two tokens themselves; or they might say that a certain NFT has great potential for long-term investment, but then secretly sell it off. Therefore, observing the actual on-chain records may help you see through their behavior and strategies more clearly.

5. The "Market Value" You See in the Media Is Often Exaggerated

Sometimes, you may see people in social media boasting about the NFTs in their wallets, telling you how the NFTs are now worth "floor prices" of a certain amount, adding them up to show their "market value." However, a project with a total supply of 10,000, with a floor price of 1E, does not necessarily mean it has a market value of 10,000E; this only indicates the current "supply" in the market.

Supply must meet demand for liquidity and a market to exist. Therefore, looking at the actual "trading volume" and "transaction prices" may be closer to the actual market situation. If a project with 10K tokens maintains a floor price around 1E for a whole month, but the number of transactions is less than 10, then its actual market value is only 10E, with the remaining 99% being illiquid assets that buyers are unwilling to sell at a loss. Therefore, before realizing actual profits, the fluctuations in floor prices do not affect you.

6. Always Talking About Changing the World with Blockchain, but Only Concerned About NFT Floor Prices?

Sometimes, you may hear some people in the crypto world shouting slogans about changing the world with blockchain, decentralization, fighting traditional finance, and paradigm shifts. However, when it comes to discussing actual technical applications, economic models, and execution plans, they fall short. They often use ambiguous, unfamiliar terms to appear high-minded, much like how everything had to be labeled with "cultural and creative" ten years ago.

At this point, the only way to attract attention and gain approval is through "money." Instead of focusing on the project team's background and future plans, they mostly pay attention to the fluctuations in the "floor price," sometimes without understanding the reasons behind them. Therefore, this so-called "consensus system" is actually no different from the values established by traditional finance; it's just a new form of currency.

7. You and the Big Shots Are Not on the Same Boat! Why Does He Always Buy First Before Recommending Others to Buy?

For example, a big shot buys in at a floor price of 0.5E for a project, then promotes it in the community, and everyone starts buying in from the cheap prices. As the floor price gradually rises to 1.5E, willing buyers willing to pay more start to decrease. Those who buy in at the high point of 1.5E find that the price doesn't go up, the trading volume decreases, and they can't sell their tokens; they start to worry and cut their losses, causing the floor price to drop back to 1E. Even if the big shot quickly sells at 0.75, they still make money, while those who bought above 1E can only hope the project will perform miracles or cut their losses.

In other words, even if you hold the same NFT project, entering at different times and prices puts you in different positions. Although you seem to be on the same boat, when the ship sinks, those who entered later are the first to sink, while the big shots can continue to thrive with the help of these people.

8. Can His Investment Recommendations and Strategies Be Tangibly Valued and Quantified? What Is His Analysis Method, Basis for Judgment - Intuition, Personal Preference, or Strategy?

On social media, you can find all kinds of NFT investment chat groups, each with their own analysis methods. Some like to look at the author's reputation, others prefer data, team background, execution capabilities, community interactions, aesthetics of the work, etc.

All kinds of judgment methods are valid, but what you should avoid is relying on something that seems profitable but can't be explained, only giving you an unreasonable "feeling good." If they cannot articulate an analysis and judgment model, you can continue to blindly follow, but you will never be able to transform information into your own knowledge and perspective. When you lack judgment, you usually can't take responsibility for your choices; you silently pocket the profits when you make money and start blaming others when you lose.

9. Boasting About Success When It Suits Them, but Saying #DYOR When Fails?

Additionally, there is an interesting phenomenon where many big shots or media outlets will "share" some projects, and always end with "the above does not constitute investment advice," "please #DYOR." If the price goes up in a few days, they will start saying, "If you had listened to me, you would have earned this much," "the project I recommended a few days ago has increased by this much"; but if the price drops or the project collapses, they will either avoid talking about it or tell you, "I told you to DYOR!" If everyone could turn back time, why not just suggest going all in on Ape and Punks?
As investors, we should take responsibility for our judgments and choices, but as media outlets, we should also be responsible for the information we disseminate.

10. Many Multi-million Transaction Prices Are Just Trades Among Themselves

In the traditional art market, there is a popular technique of "artists buying each other's works." A buys B's work for 1 million, and B buys A's work for 1 million, enabling them to upgrade together to become million-dollar artists at zero cost and gain media coverage to increase their fame.

The same technique applies in the NFT market. When a project party or investment community sees the floor price of a project starting to drop, they may collectively raise funds or collude to make a transaction several tens or hundreds of times higher than the average transaction price. This will quickly boost the trading prices and chart on OpenSea, making unsuspecting people believe there's a market; and this "amazing transaction" can also gain more discussions and attention for free on media, chat groups, and communities.

Conclusion: Do Truly Valuable and Consensus Items Need So Much "Promotion"?

Some "big shots" or "media" claim they are not in it for the money. However, their real revenue stream is through traffic and attention, just transformed into exposure, sponsorships, sales revenue sharing, or other forms. The consumer's money goes through an extra step, first to the NFT project party's pocket, then to their own pocket.

While NFT trading and investment can indeed yield hundredfold profits, it's definitely not as simple as blindly following the FOMO in the community to get rich quick. Therefore, as readers and consumers, the next time you see certain news on social media, try to independently consider the above questions, which may help you choose high-quality projects more cautiously.

Extended Thought ͡° ͜ʖ ͡°: Are Virtual Currency and NFTs Bringing Paradigm Shifts or Just Another Means of Flaunting Wealth?

Some in the crypto community emit an image of being "ahead of the curve" and having a "broad perspective," seemingly looking down on traditional financial investors and values. However, when they talk about their achievements, they always like to convert their Ether and NFTs into staggering amounts of fiat currency, afraid that everyone won't know how much "wealth" they have.

Furthermore, the gradual development of blockchain relies on the open-source contributions of many pioneers. In this world that advocates fairness and transparency, some people are still busy profiting by "selling information," which seems particularly ironic.

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