NFTs Explained: Community-Driven Supply and Demand NFTs

by Matthew Russell - Posted 1 month ago



Welcome my CryptoComics Compatriots. Today we are diving back into the world of NFT and this time we are talking about how they are community-driven. We will be going over various topics such as supply and demand, floor pricing, HODL, etc.


We see a rather large disconnect between comic creators and understanding of exclusives when it comes to driving resale value.  Well today, we are going to make it as plain to understand as possible. 


That being said, we are not investment brokers or financial advisers. Therefore we will not be telling you about things like investment opportunities or giving any advice. As Jared once said, we are just a bunch of comic nerds who happen to also be a bunch of crypto enthusiasts. 


For any specific advice, I recommend Googling “investment brokers” and finding one that you trust.


Now, let’s break down the Crypto World for you. We can start with the basic supply and demand aspect of NFTs. 

SUPPLY & DEMAND OF NFT’S

When a collection of NFTs first comes out, oftentimes they are simply given away. Let’s take a look at CryptoKitties. 


CryptoKitties is a game based on the Ethereum network where people can buy, trade, collect and breed cats. This revolutionary idea from Dapper Labs spawned a new way of looking at NFTs. 


I have personally stated in the past that I personally see no value in this, but I need to clarify. I don’t see much value in a picture of a cat. After working with my team, I know what NFTs are capable of doing (and what we present to you with CryptoComics is just the tip of the iceberg). 


Just a simple picture (not fine art) doesn’t hold much value to me. Now, that being said, what they have been able to achieve is extremely valuable. They began the process of normalizing blockchain technology as well as cryptocurrency.


Now back to supply and demand. 


As much as I have dismissed many early NFTs as being something of lesser value than “fine art” such as a Picasso or a Van Gough, they still sparked an interest in the eventual product. They created a new market that was wild and fun.


This created a demand for such images. This was also something that users capitalized on. 


Each kitty from CryptoKitties is a unique cat that is owned and validated through the blockchain. They cannot be replicated or stolen. In the beginning, these pokemon-like cats were simply given away. That's right, the first gens were free at first. 


This generated interest and got the game going. Once people had these, they began being traded and “bred” with other cats to generate the next generation of Digi-Cats. 


Other major NFTs followed suit; CryptoPunks were also free at first to anyone with an ETH wallet. As they get traded, their value seems to go up. Not for any reason that a programmer came up with, but because of the number one rule of any business; Supply & Demand. 


If there is a huge demand for a product and you are able to limit the supply, then the price drives up. 


Look at the recent spike in gas prices. There is a shortage in gas due to sanctions on Russia. The demand has not changed enough, even with the public push toward electric vehicles. Hence, the price of gas goes up.


Don’t worry, that was all for the political lessons. 


Let's check in on Martians VS Rednecks over on Opensea.io in order to get a good understanding of supply and demand. 


As of the time of writing this, there are 6.7K NFTs created by the Martians VS Redneck crew. As you can see from the screenshot, all 6.7K are owned by 675 different wallets, but more on that later. 


You can check them out at their CryptoComics account or here at https://opensea.io/collection/martiansvsrednecks


You can see each and every one of the 6.7K unique NFTs that Martians VS Rednecks has made. Many of these are still up for sale by private collectors in either auctions or direct from the current owner. 


You can see that each one is completely unique and you will be the sole owner of this one of a kind piece of art. Think of it like a set of baseball cards where the company only made 1 set. If you get any card, it is the only one that is like that…EVER!

VALUE OF AN NFT

A long time ago (I was 8 or 9) someone asked the value of my then meager comic collection. I’m sure I told them that it was worth millions, and was soon corrected. “They are only worth what someone will pay for it.”


In comic terms, let's say I have the first edition of Werewolf By Night #32 (the first appearance of Moon Knight) and it is graded at a 9.2. The value is set at $6,000. This is mostly due to the introduction of Moon Night into the larger MCU with the new show on Disney+. 


This means that the most anyone will realistically pay for it is $6,000. There might be a few outliers that would pay any amount; say if Elon Musk was a diehard Oscar Isaac fan and fell in love with that comic. He might pay any amount to get his hands on an original in such good condition. 


When it comes to NFTs and you see some selling for hundreds of thousands or even millions of dollars (Thanks Beeple), it comes down to simple supply and demand. 


As we have said previously, that is the only NFT like that; making the NFTs very rare and therefore more valuable. The demand is there, now the supply is limited. 

MULTIPLE WALLETS

With Martians VS Rednecks, we showed you that there were 6.7k items owned by 675 different wallets. Instead of saying 675 people, 1 person could own several wallets. There are several reasons a person might have multiple wallets. 


Private Key Risks

If you lose your private key, you have lost all your cryptocurrency. It makes sense to spread it out a little. 


Blockchain Shows All

It’s one of its greatest benefits as well as it’s downside. Everything is shown. Although the identity of transaction participants are cryptographically encoded and unavailable to prying eyes, activity is not. If you are a whale and wish to not draw attention to certain purchases, doing so with another wallet would be beneficial.


Smaller Is Better

Since a large quantity of coins sent to an exchange can cause panic among crypto enthusiast. Panic causes volatility in a currency. Volatility causes stress. To avoid a lot of unneeded stress, many transactions are done using multiple wallets. 


METAMASK & OTHER WALLETS

There are various wallets that you can hold your ETH coins. To purchase anything from the Martians VS Redneck collection, you will need one. If you don’t have a wallet yet, you can pick up the metamask directly from the Chrome Store.


Setting up a wallet and getting the funds to that wallet is an entire post on it’s own, so we will get into the various wallets in a later post.


On a side note, you can out money directly into Opensea through the MoonPay payment options but it will generally cost more to convert your Fiat money into cryptocurrency. 


WHO OWNS THE COMIC RIGHTS?

When searching on OpenSea, make sure that it is a verified collection and not simply a fake. You will see a blue checkmark in your search results verifying that it is an original collection by the creator of that NFT. 


On CryptoComics, we will extensively go through each comic uploaded to the Marketplace. We check to make sure that it was uploaded correctly, and that the rating system matches on the comic. We don’t want an adult comic being marketed to those that are underage.


Ownership rights and responsibilities fall directly on the account that uploads the comic. This means that everyone who uploads has the rights to do so. If that ever falls into question, the responsibility falls on you. 

FLOOR PRICES OF NFTS

The floor price when looking at a collection is the absolute lowest amount that you can pay to own an NFT from that project. This price is set by the owner of an NFT and is listing the price cheaper than any other in order to help it sell faster.


This term is one that comes from economist and refers to how low a commodity or good can be sold. Here in the land of NFTs, this term has been reappropriated as a metric to help value a project overall.


As of the time of this writing, Martians VS Rednecks has a floor price of 0.037 ETH. This is roughly $114.67 for the cheapest NFT from this drop. 


Some such as ​​Bored Ape Yacht Club have a floor price of 124.89 Eth (roughly $387,045.35 according to Coinbase’s USD to Eth converter). That's an expensive ape. According to statista.com thats barely UNDER the blackmarket cost for a live ape as a pet. 

BUYING AN NFT

Many of us are familiar with sites such as eBay or Property Room. Buying an NFT has a surprisingly easy process. You can see if they are up for auction or it is a “Buy It Now” situation. There is also an accompanying “Make Offer” link that allows you to suggest a price that the owner can either take you up on, or pass on.


If you are entering an auction, remember that many have a “Reserve Price” that must be met in order to have your bid considered. 


You might notice that with the timed auctions, the prices are set as WETH instead or ETH. This is a “Wrapped” ETH, which has a timed delay feature so you  can use it in an auction. They have the same value as ETH so there shouldn’t be any problem with the conversion. 


One of the cool things is that you can see the price history of any NFT. This can also help you decide if it is worth purchasing as an investment. 


In the properties section, you can also check out what makes this NFT so rare. What about it makes it unique. This can help you determine the rarity within more popular collections such as CryptoKitties. 


What color is the fur? What colors are the eyes? What is the accent color and what percentage of kittens in this collection have the same accents.


You can also see the token standard within the details. Many in OpenSea and CryptoComics are ERC-721 tokens or ERC-1155. More on that another day. 


MORE TO COME


As I have said, there is so much more to talk about that needs to be understood. I am diligently working on several more posts for you. In the meantime, use the code “Chillin” to claim todays badge. Lets see how many of you claim it. Wink Wink