First NFT concept came out in 1981. Much hype went into NFTs during the past year, and many people rushed to the space to create value and launch projects. The hype was there in the Dot Com bubble, but the market was not yet; there was a catch this time.
A lot have compared NFTs to Tech companies during the Dot Com bubble, but I genuinely believe this doesn’t seem right for many reasons I am going to lay down below:
- THE TECH
We often discuss tech in conversations, spaces, etc.. but what do we mean by tech? I would argue that decentralization and blockchain would be irrelevant if not massively adopted and liberated from any control; it would be a façade to another centralized system. I would further argue that decentralization is a bit farfetched for now. What is relevant, in my opinion, for NFT projects are three points in technology moving forward:
- Being Multi-sig wallets and the recorded transactions for higher transparency.
- DAO structures which is a Corporate Governance on steroids.
- Gaming applications that create or might create a revenue stream undervalued at this point.
If you can build a project that works along those lines, you already are ahead in project building.
2. THE COMMUNITY
Today more than ever, people are urged to belong to a community, family, or place they call home. This is why NFT projects can be very appealing to many out there. And this is why I genuinely believe it is not just hype. Utility lies in the community. Facebook Group appeared in 2013 and was, in my opinion, the first trial at building communities; It was too early; there was no covid, there was no recession, no tech, and no polarization of societal interactions.
3. THE ART
Now comes art, and there is a massive misconception between art on web 2.0 and art on Web 3.0. In Web 3, you build art for the community, for the storyline, and not purely out of creativity, and that’s something many artists do not understand yet. Art and Branding are perfectly commingled in web 3, and delivering a Lore is essential to combine both. For me, Azuki combined all these elements and created a reference that will live on for years and years to come.
4. THE USE CASES: FIRST NFT IN 1981
Lastly, the use case of NFTs. I will start with an example that I believe is the first use case for an NFT concept and any attempt at an NFT project launched in 1981. Yes, 1981 is the first NFT project with the AAirpass.
AAirpass was a membership-based discount program offered by American Airlines to frequent flyers launched in 1981. The program offered unlimited travel on American Airlines and unlimited access to Admiral Club locations.
Today, the program no longer offers lifetime or unlimited travel, focusing on pre-paid fares at a discounted, fixed price for frequent travelers. Instead, a minimum commitment of $10,000 per traveler per year is required. Existing unlimited AAirpasses remain valid.
The program (now re-branded as AirPass) initially enabled pass holders unlimited first-class travel on any airline’s flights worldwide. Lifetime membership went for $250,000, with the option to purchase a companion pass for an additional $150,000. A total of 66 AAirpasses were sold under the unlimited travel conditions, with businessman Michael Dell, baseball player Willie Mays, and America’s Cup winner Dennis Conner among those who purchased the passes. The program launched when the airline struggled financially and needed a quick infusion of cash.
The cost of the pass was $250,000 when launched in 1981 (equivalent to $745,150 in 2021); this increased to $600,000 in 1990 (equivalent to $1,244,473 in 2021) and $1.01 million in 1993 (equivalent to $1.89 million in 2021). The airline ended sales of the unlimited passes in 1994 except for a one-time offer in the 2004 Neiman Marcus Christmas catalog at a price of $3 million (equivalent to $4,303,911 in 2021) for the pass and $2 million for a companion pass; none were sold.
In this example, AAirpass created a design for the pass [Art], utility [Unlimited First class travel], and a community [All could access the ADMIRAL lounge]; technology was not there to boost it.
NOW LET’S DIG DEEP INTO WHY AZUKI IS SO VALUABLE?
Many people think NFTs are overrated and overpriced. So here is why Azuki is not? First, of course, considering the team continues on the fantastic path they have taken.
- Supply: Unlike many other projects, like the BAYC family, supply is very low and provides unique entry points to the community and the project.
- Value: Why pay 20k or so for an Azuki: N’1? You are buying access to the project itself, but now since it is not a share in Chiru Labs. Well, I think NFTs will settle as a hybrid instrument that combines the AAirpass we discussed earlier with access to indirect dividend distribution moving forward. Let me explain this concept I call “I-Dividend.” I-Dividends are a new breed of dividends whereby a holder of an instrument gets access to revenue through certain exclusive drops by the project or company whenever revenue is generated, but with a twist. This is the cycle it follows: First company generates value; then, the company drops something that would be in demand by people external to the brand and or linked to a physical product/service that the general public would want. This creates early access / exclusive access to holders. The value they would generate is split between the value the company has created and the value created from the demand generated by the public. It’s a hybrid dividend called I-Dividend.
This is why, Azuki has so much potential, able to create a hype over a product / service that the public wants and generating further external value that rewards original holders and bring influx of revenue to Chiru Labs.
PS: Note that branding and art is what is gonna keep people coming to the project. Add to that the revenue a member can generate in art and commissions. [To be developed in a further article].
