The two moguls opened up the 2022 Sloan Sports Analytics Conference with tough love on the state of the NFT market. Here’s why crypto enthusiasts shouldn’t freak out.
Gary Vaynerchuk had to go and rip the Band-Aid off.
“98% of NFT projects are going to go to zero, or close to it,” the Chairman of VaynerX said. It was a hell of a statement to utter before 9 a.m. in the conversation that opened the 2022 edition of Daryl Morey’s ComicCon for VORP evangelists otherwise known as the MIT Sloan Sports Analytics Conference.
Sitting opposite Fanatics CEO Michael Rubin and moderator Jessica Gelman, the CEO of Kraft Analytics Group, Gary Vee explained that the hyped and oversaturated market for non-fungible tokens resembles the 1990s tech boom that saw countless dot-coms receive 11-figure valuations before they’d even feigned an attempt at e-commerce. In 2000, the house of cards tumbled.
“There’s a giant crash to this market coming,” Rubin concurred, insisting such a thing is inevitable given the sheer volume of NFTs getting minted left and right with no prevailing best practices regarding quality control or long-term value add.
But this was not meant to be some sad-sack recriminations summit; Boston already held one of those after Tom Brady signed with the pirate ship team. No, this conversation — officially titled “Disrupting, Reimagining, & Crushing It!” — was ultimately the kind that had you feeling fairly shot out of a cannon.
Specifically, a decentralized, distributed one.
A key lesson from the panel for both blockchain brigadiers and the NFT-curious alike, as well as a reason to be bullish about the future no matter where the market trendline goes? The fact that when a crypto project flops, it’s not the fault of the medium, just as the dot-com crunch wasn’t the fault of the internet — or worse, some damning evidence it was a fad. Well-meaning but ultimately errant human efforts are an immutable fact of earthly existence (at least until Web4!), but it’s worth shouting out loud for the distributed dilettantes that blockchain networks as such are structurally sound.
“The consumer blockchain is the biggest technology shift we have right now,” Vaynerchuk said, the biggest since the dawn of the public internet. In the broadest possible view,he sees opportunities practically beyond belief. Unfortunately, he considers the execution in the NFT space at the micro level to be a “cliché gold rush” at the present moment.
And as with any gold rush, the vein eventually runs dry.
This is the crash that both men are convinced is coming.The bottom falls out, and the creditors come to collect something that was never really there.
But in order to reach the sort of sustainable equilibrium that the brightest possible NFT future requires, the crash is a teeth-gnashing but necessary event.
And once this hard NFT reset purges much of the overproduced, one-dimensional rubbish from the market, a needed paradigm shift will finally have the space to take hold.
Point blank, the panelists agreed that the real revolution begins when we wrap our heads around the idea that non-fungible tokens are far more than digital art or collectibles to be bought and sold just like the kind you can hold in your hand.
“I don’t think people are using the utility aspect of NFTs yet,” Vaynerchuk said. Quite simply, his crypto-eutopia is one in which NFTs are keys that unlock ongoing membership in organic communities built around common interests. Unlike some sort of VIP lounge behind a velvet rope, these are communities in which every member is on perfectly equal footing and that cannot be corrupted or usurped by, say, a network administrator or a big tech conglomerate thanks to the decentralized principles fundamental to Web3 and crypto technology.
We’re starting to see glimpses of this platonic NFT ideal now. Vaynerchuk points to his VeeFriends project as an example, while communities like World of Women, the AOK1VERSE, and LinksDAO have used similar techniques to rethink the way enthusiasts pool their passions to create otherwise unachievable results.
In Vaynerchuk’s view, these dynamic platforms that link NFTs to ongoing experiences, giveaways, or gamification across the virtual and physical worlds are a major component of the industry’s best way forward — and not just because they’re fun.
If and when the market does crash, and my NFT isn’t “worth” anything in a traditional sense, these built-in experiences — for instance, a VeeFriends NFT is the only ticket to the “VeeCon” conference — reveal themselves as not just a nice bonus, but the most important aspect of the token altogether.
This doesn’t mean we should stop looking at crypto-powered tokens (non-fungible or otherwise) like investment portfolio assets; it means we have a parallel opportunity to embrace them more fully as part of a contract. As malleable totems that both broadcast a certain type of passion and bring us closer to others who choose to do the same.
Yes, Michael Rubin and Gary Vaynerchuk agree that the NFT crash is gonna happen. But don’t be scared, and don’t Gronk-spike the whole non-fungible universe straight into the trash bin of tech history. Think of this oncoming downturn as a clearing of the fog — one that will illuminate the path the market was always meant to take.
“You gotta taste things that are innovating,” Gary Vee said, putting a bow on it. “Whether you think it’s a fad or not, to dismiss an entire movement, that’s a mistake.”