The non-fungible token (NFT) analyst and blockchain detective OKHotshot has highlighted its selection of 18 of the “most inconvenient truths” in the NFT industry.
In a lengthy 20-part thread addressed to his 45,000 Twitter followers on Saturday, OKHotshot pointed out many of the problems that currently plague the NFT industry, including irresponsible celebrity endorsements, hacking, and the types of projects that are almost always doomed.
The analyst made a name for himself in the industry as a full-time on-chain analyst specializing in NFT audits and Discord security.operating under the handle @NFTheder on Twitter.
Most NFT investors will lose money
One of the most sobering “inconvenient truths” shared by the NFT analyst is that most people will lose money investing in NFTs.
OKHotshot said that “there are no reliable stable investments in NFT” warning that if an investor hears the term “blue chip NFT” to “run away”. Also warned that “diamond delivery” is not the best way to make money, but investors should take profits when they can.
“Not all of us are going to make it. Most NFT traders trade at a loss.”
Previously, Cointelegraph reported on a survey that found that while 64.3% of respondents said they bought NFTs to make money, 58.3% claimed they have lost money dealing with NFTs..
The analyst advised that anyone interested in NFTs should be aware of the announcements because “by the time you find out about a new project in the Twitter spaces, you’re late.”.
He also warned that volume and liquidity are often more important metrics than floor price, and time is more valuable than any asset, so planning ahead is essential.
“If there are no buyers, you can’t take profit,” he explained..
6. You are responsible for your own security. Understand most projects don’t audit their code or have Discord security.
— OKHotshot (@NFTherder) August 27, 2022
6. You are responsible for your own safety. Understand that most projects don’t audit their code or have Discord security.
Most NFT projects fail
The NFT analyst also warns anyone interested to get in early on a particular NFT project, as the tokens often fail to stay above the mint price.also adding that “derivatives rarely exceed original NFT charges.”
The NFT project Pixelmon sparked controversy in March of this year after revealing the final art of his long-awaited project, whose quality turned out to be far below expectations.
The project raised about $70 million, with each NFT being minted for 3 Ether (ETH) each. However, the minimum price on the OpenSea NFT market has plummeted to just $0.26 ETH, worth about $370. at the time of writing this article.
Phantabear, another NFT project, was originally minted for 6.36 ETH and drove record trading volumes on OpenSea when it first launched in January, but has also seen a significant drop in value since then; its price floor dropped to just 0.32 ETH, or $463 at the time of writing.
A study conducted in March by the blockchain analysis company Nansen found that most NFT fundraisers make no money or end up making less than it costs to create.
Celebrities and influencers have no idea
Several of the “inconvenient truths” shared are scathing about celebrities and influencers.
OKHotshot said thatdespite what celebrities and influencers may claim or insinuate through social media posts, noted that “celebrity NFT projects are notoriously bad investments”.
He also added that “Web2 marketing is grossly ineffective in the NFT market”.
17. Celebrity NFT projects are notoriously bad investments.
— OKHotshot (@NFTherder) August 27, 2022
17. Celebrity NFT projects are notoriously bad investments.
Recently, Cointelegraph reported on warning letters published by a consumer watchdog group to nearly 20 celebrities for their role in NFT shilling..
OKHotshot endpoints revolve around the idea that most NFTs have no intrinsic value. The analyst warned that NFT projects without conditions of sale are worthless and profits from NFTs are not passed on to subsequent buyers unless specified in the conditions.
“NFT projects with no terms of sale are selling you a token ID with a hyperlink to an off-chain asset. Without terms, nothing is defined. You can’t own a hyperlink, so chances are you didn’t buy anything.”
Having said that, believes that the price of NFTs remains controlled by market hype and speculation, noting that astute investors could “use this to their advantage”.
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