Token Analytics
Very few posts and articles on Medium are frank and open about money. If someone raises a hundred million dollars they’ll humble-brag about it, but I can’t remember the last time I saw someone presenting real bottom-line figures relating to day-to-day operations.
On this social media site only one of the three Thanksgiving dinner rules applies: don’t actually talk about money. (The “don’t talk about religion” and “don’t talk about politics” ones are usually ignored.)
In this article, I’m going to change that.
Partially because I like going against the mainstream of popular opinion, but mainly because all the facts and figures you will see below can be extracted from the Ethereum blockchain with a little bit of effort due to the transparency of the network.
And so I’m going to examine real dollar figures relating to a real NFT project. Those of you who are fed up with the Orthoverse can tune out now.
Save as xls
Today I saw a post that got a lot of positive comments, featuring a spreadsheet made by Joan Westenberg for calculating in advance what kind of traction your NFT project requires to raise a certain level of funds. Thanks to LinkedIn’s excellent search facility I can’t find the post anymore, but I did find the spreadsheet in my browser cache, so at least I could provide attribution for that.
It’s a simple little spreadsheet, but I would imagine that, although effective, few of these cookie cutter copy/paste projects go even as far to use something as basic as this.
I decided to try it out retrospectively on the Orthoverse.
And I immediately hit a problem. In our project, Richard and I have not focused on shilling and hyping our project on Discord or Telegram, and as a result we have a combined community of 54 members on those platforms.
I believe traditional NFT projects aim for something more like 54 thousand members. And therefore, according to the spreadsheet, we should have made just under 30$ so far.
This illustrates one of the problems with the current methodology of NFT collectible projects — they rely on the common false assumption presented by naive start-up founders to Venture Capitalists every day, which runs: “The total addressable market is $100 billion per year, so if we can get 1% of that, we’ll be a unicorn!”
Also, it’s a terribly boring and unimaginative approach. My ex-CTO and I used to describe these things as “push-up apps”, because we met a lot of people during the middle of the last decade who were hoping to get rich by releasing an iOS or Android app that did nothing more substantive than track the user’s exercise regime.
Of course, at the Orthoverse we do things differently (not “different” — Apple: get a grammar checker). Or rather, we’ve gone back in time to a happier simpler age when you could get a CryptoPunk for just the gas fee.
Well, not quite back to those times: we charge 0.0004 ETH per token, which means if … sorry, when the whole 10 000 are minted, Richard and I stand to make a whopping 4 ETH (or about $5 thousand dollars at current ETH prices) from minting!
I can hear a few NFT project managers choking on their venti lattes as they read the previous sentence.
But … minting is not the only way to make money from NFTs! Business developers out there will point to:
- royalties (we charge 2.5%),
- derivative collections (no way — that’s not the Orthoverse way),
- merchandise (hang on, we have that, but I’ve priced it so we don’t make a profit), and
- brand tie-ins (the big brands are not knocking on our door, and if they found out what Richard and I are like, it would probably turn into a knock-a-door-run prank).
“Oh come on Keir, get to the point — show us the numbers!” some of you are saying by now (the rest of you have tuned out because it’s yet another Orthoverse article). So, here they are. I only have figures from the beginning of April, because we had to migrate to a new contract after a couple of months due to a serious bug, and that burned all our initial profits of 4 ETH.
Which was fortunate, because it makes the accounts so much cleaner. Also, Richard and I like a good bonfire.
Making a mint
We’re using Dune.com to gather up the numbers rather than Excel. Dune is a bit more complicated than a spreadsheet, because you have to know SQL in order to use it, but it is a lot more powerful. Let’s go through the charts:
This chart shows the rate at which tokens have been minted in the last three months. As you can see, we have a reasonably steady base line, with a significant rise in recent weeks. Of course, it’s hard to know whether this will grow linearly, quadratically, oscillate sinusoidally, or flatten out. After all, one article in an online news outlet with a name starting with “coin” could cause a token rush. And if Richard and I are struck by lighting in a pair of freakishly synchronous Finnish and Thai thunderstorms, then it’s game over.
My gut feel is that we will both survive, and that the last land will be minted some time between one and two years from now. Which isn’t bad. The Cryptopunks got assigned slowly over a year until a few media articles caused the last ones to be snapped up suddenly. With this kind of progress, the Orthoverse should be ready for the next crypto-summer, and Richard and I will then become wealthy beyond our wildest dreams.
And subsequently turn into complete arseholes if we aren’t already.
Cumulative nimbus
Time to move on to the next graph, which is the amount of ether that the Orthoverse token contract has received over time:
Three months, six ETH. Look at that!
It actually puts us in the top 1% of NFT projects, or possibly even the top 0.1%! A sad indictment of how unlikely it is for your NFT project to succeed. If the Orthoverse counts as a success, I’d hate to be working on a failure.
The more astute of you will have noticed that 6 ETH is substantially more than the 4 ETH I claimed the Orthoverse could make from minting if all 10 000 tokens were revealed. How can that be?
The answer is that there’s more to NFTs than minting.
When I first heard people apply the term “utility” to NFTs, I thought they meant: “things that the NFTs can do” or perhaps “things you can do to the NFT”. To explain: think of the utility of an original pressing of “Never Mind The Bollocks, Here’s the Sex Pistols”, which is that you can put it on a record player, and then listen to Johnny Rotten railing against British authoritarianism and elitism while Steve Jones plays Sid Vicious’s bass parts.
It turns out that most NFT projects consider “utility” to mean the equivalent of “Richard Branson will let you visit Necker Island if you bring an original pressing of Virgin Records catalog item number V2086 along” (hint: that’s the Sex Pistol’s album I was talking about in the previous paragraph).
Due to that misunderstanding, Richard and I added the possibility for token owners to increase the “level” of their token on-chain, and to “flip” a second on-chain value between 0 and 1 to alter the “realm” of the token. The first can be done a total of seven times with the cost growing exponentially, and the second can be done as many times as you like at a fixed cost, so the returns from the former are a bounded O(n²), and the latter are an unbounded O(n).
But why would we do that? Why? It sounds so complicated.
The answer is: although there is nothing out of the ordinary on the blockchain for the Orthoverse other than those values (or is there … ha ha), which can be influenced by the token owner for payment, it opens up all sorts of possibilities on off-chain websites. The trick is to build some kind of off-chain functionality that adds to the mystique of the tokens:
- what they look like — in our case: heraldry, crowns, space ports and castles,
- influencing where the end up on the Orthoverse map, and
- a whole bunch more that we’ll make up as we go along.
Because we’re making it all up as we go along. But like a competent improvisational comedy troupe, Richard and I are doing what we can to ensure that the flow is open, not closed.
Of course, anyone else is able to deploy a website that interprets the level and the realm of each token in a different way. All the data is on a public blockchain, free to be utilized in any way a competent developer likes. You’re welcome to do so, John Rigler.
Digging deeper
If the minting of Orthoverse tokens has only resulted in a few measly dollars, where did the rest come from? Here is the breakdown:
In the charts above you can see that we’ve made about 100$ from people flipping their token between fantasy and futuristic (it’s less than 2$ to do so), 200$ from people minting their tokens (that’s also about $2, but we only see 50 cents due to gas fees), and a whopping 7200$ from people leveling up their tokens.
You see this kind of approach in, for example, the car industry. The revenue made from the basic model is significantly inflated by ensuring adding a sunroof, an in-car entertainment system, leather seats, an unusual paint job, or aluminium rims cost a lot extra. Laptop producers and graphics card manufacturers also play the same game, enticing you to go for the top of the range specification by making each add-on or improvement incrementally palatable. In some cases, the low-range device contains all the chips and boards that the high-range one does, just with some of the functionality disabled.
And it appears we’re all happy with that.
Summary
My attorneys and business advisors (of which I have none) have all admonished me with statements to the effect that giving away all the above trade secrets is a terrible, terrible mistake.
I don’t care. For three reasons:
- I would like my Twitter feed to contain something other than Goblintown/Doodles mash-ups or Bored <insert animal here> NFTs,
- The odds are that anyone who thought that point one was a good idea isn’t going to be able to run far with the concepts presented in this post, but if they do, we’re going to be the OGs, and
- The Orthoverse is doomed anyway. We’ve said so from the very beginning.
Blatant call to action
Reveal your own Orthoverse land token before it’s too late and they’re all gone. Just go to https://orthoverse.io, connect your cryptowallet, click a few buttons and pay a few dollars, and you’re a part of the adventure. Trust me, at that price it’s not a blind gamble; it’s less than a coffee at Starbucks.
And in conclusion, it’s time to have a dig at the following Immortal Cat founders quote in a CoinTelegraph article: “The roadmap is constantly evolving in line with changes to the market.”
We’re more honest. Which is probably why we’re not featured in CoinTelegraph.
I’m going forgo public relations business speech, and quote Richard instead:
We freakin’ don’t know where we are going, but boy are we having fun getting there.
