(Published on Twitter, November 30th 2022)
Why #ENS will be the most traded #NFTcollection in 2023.
1 – Macro Economic Outlook
2 – NFTs/ #ENS
3 – Cost
4 – freedom/ creativity
5 – Intrinsic value, utility
1 – Macro Economic Outlook
We have arguably been in a bear market for the better part of a year at this point. Unfortunately, nothing appears to be significantly improving; the “rate raising campaign” of the Fed is still in ongoing, and the much-discussed pivot has not yet taken place. Additionally, the cost of living is a hot topic of discussion everywhere due to ongoing inflation, which inevitably leads to social unrest and a general sense of stagnation.
“* JPMorgan Sees ‘Mild’ US Recession in 2023 on Fed’s Rate Hikes”
In this context, cryptocurrency has performed similarly to traditional markets, with the value of bitcoin and other important protocols and projects falling by 80% or more. Notably the nft market has had a precipitous downturn and appears to be at a critical juncture.
Industry conditions don’t seem to be encouraging confidence, but investment hasn’t slowed down and the crypto/web3 market is dominating VC funding.
“According to data from Tracxn, a market intelligence platform, Web3 startups raised $865.5 million between January and October this year in a total of 32 funding rounds — up from $114.2 million during all of 2021.”
Most importantly, traditional businesses are also moving into the market because they fear missing the train.
“Nike Is Going All In on Web3.”
“Popularity Of Web3 Pushes Legacy Brands To Embrace Digital-First Ethos”
2 – NFTs/ #ENS
The entire industry is down by an astounding amount overall, as was previously noted. Daily volume, floor pricing, and the number of projects released are all significantly lower than they were one year ago. Even the so-called “blue chips” have had trouble keeping up prices, let alone generating community engagement.
“(…) daily volume plunges 99% from peak.”
“(…) [BAYC] current floor price is down 84% from its April 2022 peak.”
Meanwhile, one project in particular has gained new life during this entire period: #ensdomains. Most likely as a result of decreased eth prices and increased interest in the ecosystem, which caused a huge rise in registrations and, as a result, secondary sales.
“·Despite market weakness, #ENS monthly active addresses remain robust. While down 33% from the May 2022 peak, monthly active addresses are still 2.5x higher year-over-year.”
3 – Opportunity
Continuing from the last point, #ENS appears to be in a particularly strong position going forward, benefiting from a generally sluggish market while at the same time continuing investment in web3 infrastructure.
Morevoer, I anticipate the market for this specific asset class to change now that #ensdomains has put in several months of nonstop ath in registrations and secondary sales. A new paradigm has emerged as the result of all obvious and “premium” domains being registered or transferred to "stronger hands”. Furthermore, the possibilities that the upcoming ‘namewrapper’ upgrade will give to both new and old projects are unfathomable.
(Name Wrapper will enable the issuance of subdomains (like 1.domain.eth) as separate and tradable Non Fungible Tokens (NFTs)).
The cost of the issuance of subdomains will become negligible and possible to be done on layer 2s and even centralised databases (even offine! what?!!)), when combined with other advancements like CCPI-read and Wildcard resolution that are also slated to happen very soon.
If we need one more argument in favour, registrations of five or more characters are already quite affordable at 5$/year plus gas fees — gas has been incredibly cheap lately. In addition, I think the sweet spot between a low carrying cost and a large asymmetric bet is found in 5+ characters. Perfect for a retail market strapped for cash.
NFT rankings paint the picture.
Low barrier to entry with outsize potential.
4 – Creativity
Which brings us to my next point.
I’d say that most, if not all, projects to date have been top down, In the sense that the core team establishes the roadmap and the investor or community member is a passive player waiting for the milestones to be met and for announcements to be made public,
It is rather different with #ENS. First of all, it’s a DAO, which means users can influence the protocol’s development. But even at its most fundamental level, what an investor chooses to register is entirely predicated on their imagination and what they will build on it. Since anything may be registered, what you do with it ultimately determines its value.
5 – Utility
Lastly, I want to highlight the inherent utility of an #Ens:
- Universal Username
- Bank Address/Account
- Web/Web3 Address
- Wallet address for various coins
- Address for smart contacts for automated payments/ management ( controller, registrant and resolver)
And most of the use cases are still to be invented, imo.
“The eight most important Web3 trends”
Out of these 8 trends #ENS is present in all.
All in all, #ens is inevitable.
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