18 "disturbing" truths about NFTs

Non-fungible token (NFT) analyst and blockchain researcher OKHotshot "highlights his pick of 18 of the most "disturbing truths" about the NFT industry.

On Saturday, OKHotshot posted a 20-tweet post to his 45,000 followers on Twitter, exposing many of the issues currently plaguing the NFT industry, including irresponsible celebrity endorsements, hacking, and Almost always a doomed project.

As a full-time on-chain analyst, he has made a name for himself in the industry specializing in NFT auditing and Discord security as @NFTheder on Twitter.

Most NFT Investors Will Lose Money

One of the most sobering and "disturbing truths" shared by the NFT analyst is that most people lose money investing in NFTs.

OKHotshot said that "there is no reliable stable investment in the NFT space," and warned that investors should "run away" if they hear the term "blue chip NFT." He also warns that "diamond hands" (people with "diamond hands" who hold on to positions despite market volatility and depressed sentiment) are not the best way to make money, and instead investors should profit when they can Finished.

"Not everyone makes money. Most NFT traders trade at a loss."

Previously, Cointelegraph reported on a poll that found that while 64.3% of respondents said they bought NFTs to make money, 58.3% claimed they had already suffered losses during their NFT investment journey.

The analyst advised anyone interested in NFTs to keep an eye out for announcements, as "by the time you hear about a new project on Twitter Space, you're already late."

He also warns that trading volume and liquidity are often more important indicators than floor prices, and that time is more valuable than any asset, so planning ahead is crucial.

"If you don't have buyers, you can't make a profit," he explained.

Most NFT projects fail

The NFT analyst also issued a warning to anyone interested in early participation in an NFT project, as tokens often fail to stay above the minting price, adding: "Derivatives rarely outperform the original NFT series."

NFT project Pixelmon caused controversy after revealing the final artwork of its highly anticipated project in March – which was far below expectations in quality.

The project raised approximately $70 million, and each NFT was minted at 3 ETH. However, its floor price on the OpenSea NFT marketplace has plummeted to just 0.26 ETH, worth about $370 at the time of writing.

Another NFT project, Phantabear, was initially minted at 6.36 ETH and drove OpenSea’s trading volumes to record highs when it was first released in January, but has also seen a sharp drop in value since then, flooring at just 0.32 ETH at the time of writing ( $463).

A March study by blockchain analytics firm Nansen found that most NFT collections either don’t make money or end up netting less than their creation costs.

Celebrities and influencers know nothing

There are several "disturbing truths" that are bashing celebrities and influencers.

OKHotshot said that while well-known influencers may claim or imply something by posting on social media, he pointed out that "celebrity NFT projects are notoriously bad investments."

He also added that "Web2 marketing is extremely ineffective in the NFT market."

Recently, Cointelegraph reported that a consumer watchdog group issued warning letters to nearly 20 celebrities for their role in promoting NFTs.

OKHotshot also stated that most NFTs do not have any intrinsic value. The analyst warned that NFT projects without sales clauses have no value, and NFT proceeds will not flow to downstream buyers unless they are clearly stipulated in the clauses.

"An NFT project with no terms of sale sells you a token ID with a hyperlink to an off-chain asset. No terms, nothing is defined. You can't have a hyperlink, so chances are you didn't buy anything."

That said, he believes that the price of NFTs will continue to be controlled by hype and market speculation, noting that savvy investors can "develop this to their advantage."