A Thread 🧵 👇
In this day and age, we have access to an endless amount of digital media and products. However, we can’t actually consume it all because we are limited by one very valuable resource: attention.
As humans, we can only focus on so many things at once and spending our attention on one topic depletes our mental capacity for another. And given the choice, we would prefer to spend our attention on the things that interest and satisfies us the most.
On the other end, businesses need our attention to make money and keep them relevant. By keeping our attention engaged, they can turn it into ad views, merch, subscriptions, or any other revenue stream.
Our attention is invaluable to businesses, and they continuously compete against one another for it.
That is the Attention Economy.
Now, how does the Attention Economy apply to NFTs?
Well, running an NFT project is very much like running a business – a business selling NFTs.
And how do projects sell NFTs?
By winning and keeping our attention.
Projects that win and keep our attention earn sales, long-term holders, clout, the benefits of the network effect, and remain attractive and relevant.
Projects that lose our attention miss out on sales, clout, and fade into irrelevancy.
For many projects, announcements and executing on roadmap items are the primary drivers of attention. Some projects try to sustain attention through games, some by crafting unique or novel experiences (storytelling, burn mechanics, etc).
Sometimes the attention can come from outside the project – notable wallets can sweep, influencers can shill, rumors can start. Maybe an overlooked aspect of a project finally gets noticed.
These methods and events bring attention to a project, therefore interest and conversation (network effect), and therefore value to their NFTs. And when there is value in an NFT, there will be people willing to buy in.
Projects that go too long without announcements, advancements, or drag an experience on too long can run the risk of losing our attention. And when a project’s attention starts to fade, the value of their NFT fades along with it.
Another thing to consider is the NFT audience itself.
The majority of those in NFTs are here to make money, not hold.
NFT traders tend to focus on the next best thing (aka the next best profit opportunity) and therefore have short attention spans. NFT traders don’t want to hold and wait for the next update when they can potentially earn more elsewhere (opportunity cost).
Now, let’s take a look at some projects to see how we can apply and use this concept.
I’ll start with a deep dive using @doodles as a case study (I’m not trying to shill you Doodles, promise! 😅), but I’ll also touch on a few other projects as well.
Doodles launched back in October 2021 and captured the space’s attention by having unique art by @burnttoast and NFT OGs in @poopie and @evankeast (Dapper Labs – CryptoKitties).
Before mint, Doodles took their Discord private and only those who made it in were whitelisted to mint. This created massive FOMO for those outside and created exclusivity going into the mint. (What’s happening inside?!)
The resulting mint was a resounding success, leading to absurd gas prices, an immediately high floor price, and tons of Twitter engagement.
Doodles had captured the space’s attention going into mint, but what about after?
For reference, here is a chart of Doodles’ all-time price action along with notable events and time periods following sell-out.
Event 1 – Post-Mint
Other than an Art Basel activation, Doodles were quiet during this period. For most projects, this inactivity would’ve resulted in a slow bleed to zero. Instead, this ended up being a period of organic growth and accumulation.
During these two months, founder interviews, community Twitter spaces, and a bear market with not much else going on helped maintain and bring attention to Doodles.
Event 2 – The New Year Bull Run
Doodles had been slowly and organically consolidating and once bull market volume came in, they went on a run. It lead to peak media/Twitter engagement, a ton of ATH buys came in on rare Doodles, and Doodles Alpha chat became a buying point.
Doodles were dominating the Attention Economy, and like mentioned earlier, when attention and interest is high, the value of the NFT goes up, and people buy in because they expect it to keep going up.
Until it doesn’t…
Attention and hype doesn’t last forever. At some point, people start to lose interest and look to move on to the next best thing. Sometimes, something new comes along and takes that attention away. And as attention wanes, price retraces.
And that’s what happened. The attention and hype shortly ran out for Doodles, the price retraced, and people began to turn their attention to next best thing. (Which ended up being @AzukiOfficial and the Anime Meta!)
While a project is dominating in terms of attention and hype, it is likely peaking in terms of price (potential local top), and therefore a great time to sell.
SELL THE HYPE
Now let’s see what happened during other Doodle events/time periods:
Event 3 – Space Doodle Teaser
People got excited and bought when the teaser dropped (attention peak), but the floor slowly retraced until:
Event 4 – Space Doodle Launch
There was interest going into launch, but once that happens (attention peak), interest quickly disappeared. It also didn’t help that the launch was a disappointment to most (we couldn’t do anything with space doodles…)
Event 5 – SXSW
After the disappointing launch of Space Doodles, much of the space had low confidence in Doodles, attention was at a low (in a trough), and the floor was fading.
But, Doodles decided to show up to SXSW.
Doodles at SXSW was very well received by attendees and it showed that Doodles were here to stay and do cool stuff. Attention and confidence started to come back, and the floor began to grind back up.
While a project is going through a trough in terms of attention (potential local bottom) and you have conviction that the project is capable of bringing that attention back, then it might be a great time to buy.
BUY THE DIP
Event 6 – Blue Chip Blow-Off Top
A mix of profits from BAYC/MAYC hitting ATHs, profits from the Otherside/Koda drop, and dissatisfaction around the Otherside drop mechanics led to people speculating hard on which projects would run up next or do better than Yuga.
This resulted in a collective peak of attention and FOMO buy in on all of the next-in-line blue chips – Doodles, Azuki, Clone-X.
Unfortunately, this peak euphoria was met with a market down turn (the attention stealer, in this case), and floor prices sharply retraced.
Event 7 – Dooplicator Claim
Airdrops tend to create sell pressure, and the Dooplicator Claim was no different. For many, there was no interest in Doodles after claiming, resulting in sell-offs and a declining floor price.
However, the attention did instead go towards Dooplicators for those that wanted exposure to the Doodles ecosystem.
Event 8 – NFT NYC Run Up & News
Going into NFT NYC, there were a lot of expectations on Doodles to make some sort of major announcement. (Classic buy the rumor, sell the news scenario)
The news ended up more bullish than expected. It brought back a lot of attention and interest in the project, and the floor rose (attention peak). But like always, the hype fades, and after trading sideways for a bit, the floor began to slowly retrace down.
Now, what about other projects?
@goblintown took the space by storm back in May and undeniably stole the space’s attention. Their free mint came at the perfect time as the market took a downturn. Their art was “ugly” and polarizing, but incredibly well done.
Their Twitter spaces and goblin antics were ridiculous yet entertaining, and they were telling a story through art updates. They created a sense of mystery and excitement to know what happens next, and allowed our imaginations to run wild.
But the biggest question of all, who was behind all of this?! There was a ton of speculation that it could be Yuga Labs, Larva Labs, or even Beeple, and that added a lot of fuel to the hype.
The space was hooked.
As a result of this wonderfully executed experience and rampant speculation, the floor went from free to peaking at an absurd 8eth+. Attention was all on Goblins, they were doing cool things, and people wanted in.
But, this wasn’t sustainable. Goblintown eventually revealed their founders, and unsurprisingly, weren’t who people expected them to be. Suddenly, people weren’t as interested anymore, and with slowing updates, the floor started to fade.
Goblintown still has an ongoing burger/grumpl campaign, but it’s been dragging on for so long that people have started to lose interest and moved on.
Despite starting out with a bang, Goblintown slowly lost the space’s attention, and now has to earn it back.
Earlier in the year, @coolcats decided that their next step was to create a game. And while the space wasn’t sure that this was the right direction, there was still interest. After all, it was Cool Cats!
But, when it came time to launch, Cool Cats botched it. Both the Cool Pet mint and game launch were met with issues. People began to lose confidence in the team; this wasn’t how a supposed top tier project should execute.
Fixing the mint and getting the game ready took a lot of time, and once again, the space doesn’t like to wait. The longer Cool Cats took, the more they lost the space’s attention. They are now struggling to stay relevant.
@OthersideMeta rightfully had the space’s collective attention when it dropped, it was @yugalabs after all, and it caused dips in other projects as people liquidated to buy into it.
But there lies the opportunity: as everyone was looking at and liquidating for The Otherside, other projects were experiencing lower attention and dips – a buy the dip opportunity (assuming gas was reasonable).
Following the drop, and despite the hype and Yuga’s clout, the attention on Otherside still faded away (not to mention a lack of updates from Yuga + terrible drop mechanics).
As you can see, staying on top of the Attention Economy is hard. It doesn’t matter how big a project is, it doesn’t matter how groundbreaking an update is, once the hype dies and/or something new comes around, people will move on and floors will start to slip.
We can also see that attention can originate from outside a project. The community has a lot of power in creating and maintaining narratives.
This means you also have the power to draw attention to a project and influence it’s value (threads, spaces, rumors, shillin, etc)
Much like traditional businesses, NFTs run on the Attention Economy.
Understanding the concept of the Attention Economy can help you identify attention peaks and troughs, and that can help you decide whether to buy or sell.
– Attention dictates the value of a project
– High attention = value goes up and a good time to sell
– Low attention = value goes down and possibly a good time to buy (if you have conviction the project can win it back)
Thank you for reading! I hope you learned something new and let me know what you think 🙂
(And remember, NFA!)
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