It’s looking more likely that the decline in royalties will finally put an end to the degen free mint meta. However, the current model might be replaced by something worse.
In this video I talk about how we got to the current meta, including how scammers evolved along the way.
For a while it started to feel like we were just going to continue to be bombarded with these free mints forever, but this model will get hit hard if royalties end up going away – the math just doesn’t work.
But as a reaction to this, creators might resort to a more traditional pump and dump model in order to keep making money.
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0:00 START HERE
0:37 clown casino
2:06 the business behind a free mint
4:28 RIP royalties
6:23 the last of a generation
7:51 something worse is coming (WARNING)
Ah the free mint meta the trend that Brought us such a legendary grade a blue Chips such as mecha goblins doodle poop And who could forget peppalodeon these Are the kinds of degen mints that we’ve Seen all summer and at this point most Nft collectors are completely over it And if you’re one of those people i Happen to have some good news and i have Some bad news the good news is that Things are about to change dramatically And the current free mint model might Finally be coming to an end but the bad News is that it might be replaced by Something that’s even worse and i hope Enough collectors watch this video so That they don’t fall for this high-risk Trend that we might be seeing pretty Soon now free mints didn’t always have This negative connotation okay some Legendary projects like crypto punks Were given out for four years ago and in Fact i personally released a free nft Just a few months ago there’s just Nothing inherently wrong with giving Away things for free but in recent Months it’s taken a turn for the worse And it’s devolved into this cringy Casino-style game truly one of the Lowest forms of gambling there is and I’d rather lose my rent money just Betting on you know the ear pulling World championship then sweep another Goblin pit’s derivative and sure there
Are some quality projects out there but By and large you’re dealing with nfts Where the only value is in short-term Speculation it’s basically a game of hot Potato where you’re trying to flip it to The next person before the inevitable And permanent crash to zero in general The only winners are the people who are Actually making these nfts because every Month they extract millions of dollars In royalties and that’s liquidity that Is just never coming back yet despite Most people agreeing that this is Overall a bad trend the free mint meta Has continued to dominate for months now And you now have a group of adults who Have grown accustomed to just logging Into discord every day to trade these Derivatives and try to make like six Dollars in profit and i’m not gonna lie For a while there things started to get Pretty dark and i started to wonder if We just all had to get used to this as Being the new normal but it turns out That’s not the case and all it took was A little platform called pseudoswap to Completely wreck the entire category and I think in the coming weeks and months We’re gonna see these dj mints go from Consistently making tens of thousands of Dollars in profits for their creators to Potentially making close to nothing now To understand why this meta is about to Get destroyed we first have to look at
The business behind a free mints and why We have so many in the first place you See back in the day back in 2021 if you Wanted to drop a run-of-the-mill nft Scam there was a formula for how you Would do it first you would create the Collection and the art could be Something that you made yourself or you Hired somebody from fiverr to do it for You second you make the website and this Is where you talk about how this nft is Going to change the world or whatever You want to say and then third you open Up a discord put some mods in there Maybe a community manager and then you Just start ramping up the momentum now Let’s say you’re selling 10 000 nfts Well ideally you sell them all but you Don’t have to even if you sold only 5 Which is 500 nfts at a price of say 0.05 Each you would still make 25 each which At today’s prices is around 50 000 this Means you would very likely be in profit Just by selling five percent of your Collection which for a while wasn’t that Hard to do however people began to catch On and it became harder to convince Buyers to spend even .05 eat on a Collection that you know had a flimsy Road map a non-founders cheap looking Art etc well then just as the charade Was running out of fuel we saw free Mints rise as a viable model and if You’re one of those scammers there’s
Probably got your spidey sense is Tingling because first off on the cost Side free mints are even cheaper to Produce because in many cases you don’t Need a website you don’t even need a Discord so you don’t need to hire Anybody outside of the actual creation Of the entities themselves which tends To be pretty inexpensive second free Mints are great because you finally Found a way to get your nfts into People’s hands because there’s no Shortage of degens that are willing to Take a mostly risk-free bet on a new Collection and even though people Weren’t paying you upfront for your nfts You still had a second source of revenue Which of course are the royalties and Since your nft was free traders were More forgiving if you decided to go with A higher royalty rate and that’s why we Started to see these rates increase from Two to three percent to as high as even Ten percent now with a ten percent rate It means that a d-gen min only needs to Hit a hundred eighth in volume to make Around twenty thousand dollars which Given the lower cost of a free mint Almost definitely puts them in profit This is why there seems to be an endless Number of free mints because they’re Cheap to produce and it’s not hard to Turn a profit after just a few days Without any expectations of long-term
Support but it’s important to understand That most of these are not passion Projects right there’s nobody out there Dreaming of one day releasing mecha Goblins instead they’re being driven by Pure economics and they’re probably Being made in factories out there in Developing countries and the glue that Is keeping all of this together are the Royalties because without that the math Just doesn’t work and so here we’ve Arrived at the catalyst behind what’s About to happen you see if you were to Go on nft twitter nowadays you would see A lot of people talking about royalties And that’s because of a platform called Pseudoswap which is letting people Easily buy and sell nfts while bypassing Creator royalties altogether if you Haven’t seen my video on pseudoswap last Week i highly recommend checking it out Because in there i talk about how this Platform might scale faster than people Think and there’s a high chance that the Market is just simply going to prefer Spending less eath on nfts instead of Honoring creator royalties until now we Haven’t figured out an elegant way of Hard coding royalty enforcement into a Smart contract partly because you can Just wrap the token and bypass it and Also because you can’t differentiate Between what is a sale versus what’s a Normal transfer so the assumption is
That barring some technical breakthrough That solves this puzzle we’re likely to See a future where creators can no Longer rely on royalties as a meaningful Part of the business now this affects Some creators more than others for Example one of one artists it probably Doesn’t affect them as much because People aren’t gonna really trade one of One art through pseudoswap but larger Profile pick collections they’re gonna Feel it more and they’re probably gonna Have to start thinking about a Sustainable model for the first time but The part of the market that really feels This the most and it’s probably just Gonna get wiped out instantly if Royalties do go away are the free djinn Mints as we said royalties were the only Thing that we’re keeping these things Profitable and these are not projects That have any long-term plans to build Something actually valuable and so there Aren’t any other strategies for making Revenue again i know there are many good And quality free projects out there i’m Just over generalizing to make things Simple and i’ll give you a very clear Example of how bad this can get for some Projects and i’m gonna use bear things As an example not because i think this Is a scam or they’re not planning on Building anything real i actually don’t Know anything about what they’re
Building i’m just using them as an Example because they were a popular free Mint last week so bear tang’s had a Royalty rate of 6.9 percent and has Generated 162 eth in volume so despite The fact that almost nobody has heard About this project they’ve made 11 eth Or 21 000 from royalties alone that’s Not bad given that this project came out Of nowhere and just a few days later is Worth almost nothing and probably is Never bouncing back now if we swing over To pseudoswap what we’re going to see is That only one ether volume has been Traded on here for bear tanks and it Hasn’t had any volume despite the best Offer being higher than the floor on Openc the reason why pseudoswap hasn’t Taken over for a project like bear Things is simply lack of awareness and When pseudoswap does get integrated into Aggregator platforms like jam or genie i Can see adoption skyrocketing for these Types of projects because the type of People who are trading projects like Bear tanks are exactly the type of People who care most about profits and Are probably just gonna go with the best Offer that’s in front of them so if bear Things had launched three months from Now chances are they wouldn’t have made Twenty one thousand dollars and more Likely they wouldn’t have made anything Because people will start catching on to
What’s happening in other words what We’re seeing right now is the last of a Generation you know a real life dinosaur Before the comet comes crashing down Okay now let’s talk about why this model Might actually be replaced by something Worse earlier i said that the free mint Meta was going away but it’s possible That it might exist in another form and At the beginning of the video i Mentioned that crypto punks was a free Mint and one that had a zero percent Royalty and what they did instead was The team kept 10 percent of the supply Which obviously became very valuable Over time i do think this is viable for A lot of creators and it’s a great way To grow a brand where the creator and The collectors are completely aligned i Also think that in the wrong hands this Model can turn very sketchy you see if You were one of those scammers that Started off with paid mints and then Switched on over to free mints plus Royalties then chances are that you’re Gonna evolve yet another time now using Free mints with this crypto punks model But because there’s no real intention of Supporting the project over the long Term what we’re gonna see are the Creators loading up a bunch of wallets With nfts and then as soon as there’s Just a tiny bit of life and momentum in The collection they’re gonna dump those
All into the market this means that They’ll introduce cell pressure at Exactly the worst time when they’re Trying to pick up momentum and given the Fact that these drops usually have a Short lifespan say a week or two that Gives them just a short window to dump a Ton of nfts which you know let’s say They’re dumping 500 of them that’s gonna Raise alarm bells so my warning is that When royalties start to go away even if These free degen mints continue to exist In some form i would say clear away from Them because the business model now Involves just dumping on buyers as soon As possible like that’s the only way They’re gonna make money and when it Becomes obvious that the team is doing This the alarm bells will go off and Then it becomes just a race to zero Alright guys that’s it for today stay Safe out there and i’ll catch you at the Next video
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