Prediction: Proof of Culture Hashtag NFTs will be the 2nd most valuable project after CryptoPunks by 2023
Given that we’ve seen so many new NFT projects in the last few months, it’s difficult to take a step back and assess the overall direction that the space is heading in. To analyze this, we combed through over 170 NFT projects and found that the vast majority of them fell into the same bucket of copycat projects. After looking at these projects on a micro-level, we took a step back to paint the macro-level vision for you. Here is the evolution of NFTs:
As you may know, CryptoPunks was the first NFT project created in July 2017. They were released for free and were put out into the world for anyone to claim the generated artwork, as long as they paid the gas fees. Being the first project to take off, the community drew inspiration from their learnings, which led to the current standard for NFTs called ERC721. This was the beginning of NFTs — we’ll name it NFT 1.0 — and this validated the idea that digitized art collectibles were valuable.
Naval’s point is that the community drives the value behind a NFT project, which is easy to see. Many low-effort clones of CryptoPunks like BASTARD GANPUNKS, Picasso Punks, or Da Vinci Punks, don’t have the same creator/crypto enthusiast community that the original CryptoPunks did. Therefore, it’s easy to see why these knock-off projects lose traction and die off while the original CryptoPunks collection sells are ever-increasing prices. However, there are newer projects that have built additional capabilities on top of what CryptoPunks did with digitalized art, such as Hashmasks.
The original model of NFT 1.0 was disrupted by Hashmasks when they became the first NFT project to allow users to customize the art piece after you own it. They achieved this by using Name Change Tokens (NCTs) and for the first time every, owners of Hashmasks were able to customize their art piece by changing its name.
This allowed collectors to get involved with their work and added to the sense of ownership. This name-changing behavior made owning art feel more personal and raised the price the owner was willing to accepted to part with their piece. This coupled with the easter eggs they put in the art, allowed owners to tell a story with their art. By putting in work to find the easter eggs (whether they were actually put there by the artists or whether this was just placebo), users were able to tell a story behind their art and create meaning which was captured in the name they set. The psychology of naming a piece and telling this story was so powerful that one Hashmask sold for 420 ETH. More details on why Hashmasks was a huge success in our previous article here.
This intermediary step is what we consider NFT 1.5.
Prediction: Proof of Culture will be the NFT 2.0
We recently found this gem called Proof of Culture, which is the first project that lets users influence their art before it’s created. In our eyes, this is a big step towards full customization compared to NFT 1.5 which only gave owners control over the name of their art.
From what we understand from their website, Proof of Culture is the world’s first hashtag NFT. That’s a pretty nifty idea in itself, but what makes this project truly unique is that it’s the first to let buyers influence their customized art on the blockchain. Instead of buying a computer generated NFT off-the-shelf or being assigned one at random, you are actually commissioning a designer to create a unique piece of art to represent your hashtag, with the option to give artists additional context.
We predict this collection will be the second most valuable in history after CryptoPunks. Just like how Ethereum is the second most valuable after Bitcoin, Proof of Culture will become the “Ethereum” of the NFT projects.
Why? Because the future of the creator economy is customization. Take Cameo, for example. The whole value prop is personalized interaction with your favorite stars, instead of buying generic off-the-shelf videos. Of course, the Beeples of the world will continue to be able to craft whatever they envision and it will sell. However, the future of art is taking a good artist and having them make something special for you based on what you like rather than having a great artist give you something that speaks to them and hoping you like it.
Proof of Culture does exactly this on the blockchain using NFTs. We think the historic significance has been vastly overlooked by most people in the space. It’s worth noting that there are some thought leaders in the space that have already caught on and have minted hashtags on this platform — Mark Cuban (#MFFL), Barry Silbert (#DropGold), Mike Novogratz (#Bitcoin), Justin Kan (#LFG), Devin Finzer (#OpenSea).
Why Hashtag NFTs are Unique
Aside from the very unique value prop of allowing buyers to influence their art on the blockchain, the concept of owning hashtags is also quite promising:
- People are attached to different hashtags. It might be related to a cause they’re passionate about or it might be a couple’s wedding hashtag. Whatever it is, there is already inherent “value” attached to a hashtag, and now you can immortalize that with a customized art piece.
- During the dotcom era when domains were bought up left and right, and hashtags are the next frontier. Just like you wouldn’t want someone else owning your domain, there is a similar attachment towards owning a hashtag that is meaningful to you.
- Having a flat price of 1 ETH per piece is unique. Bonding curves are inherently flawed and promote whale dumping behavior (read more on why bonding curves + NFTs are bad). The price is steep, but it shows the team’s commitment to not using questionable tokenomics to sell NFTs.
- This project seems to have the most billionaire owners of any project, even when compared to CryptoPunks.
The project has a lot of potential, but we would love to learn more about who their artists are and what their visions are in regards to supporting the artist community, not just the buyer community. We plan to be active on their Discord to ask these questions and see if they live up to our expectations and predictions. As this project continues to get attention and pop on the radars of more people, we can see Proof of Culture redefining the NFT space.
Here we talked about the evolution of NFTs and what we think the next big NFT project will be. But of course, NFTs will continue to evolve to potentially something unfathomable. In the next article, we will talk about the overall roadmap of NFTs and how this space will continue to evolve beyond NFT 2.0.
What do you think the next big NFT project is? Do you agree with our analysis of NFT 2.0? Leave us a comment below!
NFTs are just like any investment vehicle. We do not provide any investment advice, and please do your own due diligence before purchasing them!