NFT investment SolPunks

I would like to discuss an investment in the SOLANA based SolPunks NFT.

A bit of introduction, It is the first NFT project on the SOLANA blockchain. The floor price is 6 SOL, very modest compared to famous NFT projects. For instance Solana Monkey Business floor price is 200 SOL.

The little valuation is in my opinion because they were owned by Solanart, with no DAO involved, and all royalties went to the developers.

In the last two months, a DAO managing SolPunks was created, and all royalties from MagicEden and Solanart as of two days agos go directly to the DAO. Moreover, sales have been picking up in the last days, with trading volume increasing by 250%. This translated in roughly 25 SOL a day for the DAO as of yesterday.

I believe that the project is missing some professional guidance, that is more specifically in developers and people that know the SOLANA ecosystem properly, as of right now they are mostly focused on investing in other NFT projects, rather than organizing hackatons or competitions to internally develop applications for the project. The upside are great, as we are talking about the very first NFT project in SOLANA. Being the first is a very important characteristic in the valuation of collectibles. The first NFT projects in Ethereum and Terra blockchain for instance have skyrocketed in valuation. With a little guidance, I believe SolPunks can have the same trajectory.

The METAcollective DAO could invest a modest sum of 10k USDC in it, that is 0.2% of the Meta DAO portfolio, that is roughly aquiring 14 SolPunks, to provide guidance to the SolPunks community on how to develop these applications. In exchange, the metacollective DAO would learn from the experience that the SolPunks community has gathered in its lifestyle about how to manage an NFT project, and META would also probably get great returns in the money invested in the SolPunks NFTs.

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Thanks for sharing! Will definitely look more into it. In the meanwhile a few questions:

  • what do you think is the most we should pay for each? ie would it still be a good trade at 8 SOL? 15 SOL?
  • do you own yourself some of them? while not necessarily good/bad I think would be good to disclose it upfront
  • how does the decision process within the DAO work? ie is it through Squads or similar or is it more informal?

Will also start looking into it more!

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Unfortunately with NFT fair valuation is really hard to have, it depends on your benchmarket. But if you think that it can reach 1/10 of other NFT blue chip project such as Solana Monkey Business, it would mean that the fair price should be 19 SOL. Right now there are 36 Solpunks for less than 7 SOL on Solanart, so if we want to buy 14 of them in the near future I doubt we will pay morethan 7 for each of them. I bought one myself yersterday when I learnt that the royalties from Solanart sales would directly go to the DAO, and then I immediately wrote the META proposal. I put my money on what my mounth says. Finally, their DAO is quite informal, using discord. But we could propose to have a more structured DAO, it could be one of our contributions.

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sharing link for reference on the collection:

https://solanart.io/collections/solpunks

Solanart is actually their biggest amrket place, and then there is magiceden
https://solanart.io/collections/solpunks

I’m personally really skeptical on NFTs in general. Then again I guess my conservatism has caused me to miss out. So I’ll stay neutral on this.

Just one comment. Being the first NFT project EVER is a different thing to being the first NFT project on a given ecosystem, I wouldn’t read too much into it.

It depends on what is the “first” about. The first NFT on a given year does not mean much, but the first NFT project in SOLANA, basically the first PoS blockchain, I think it means something. Here the logic of pricing cannot follow the fundamental process as there is no “intrinsic”, but follows how strong is the community behind the project and the value of the collectible. Collectibles usually are priced according to the criteria of “first”, “unique” and “network value”. That is why a white canvas can be sold for 21M$, because it was the first. I believe SolPunks has the first two attributes, and “only” misses the community, which the META community can help build, in exchange for a price appreciation of the SolPunks that the META will have bought.

I don’t want to devolve into a discussion about what makes NFTs valuable, but if it is anything like the traditional art market it’s usually driven by a handful of “authorities” that drive trends through reputation. (About a 100 agents move 90% of the world’s art in terms of value). Is SolPunks not too derivative to get the kind of endorsement it needs from crypto community leaders?

Anyway, like I said I don’t know much about the NFT scene, so going to stay neutral on this.

My 2 cents on this:

The project seems to have good traction (27k twitter followers) and is already searched on google more often than cryptopunks was 1 year ago (google_trends).

On reddit, some people complain about potential Larva Labs’ copyright infringement (reddit_discussion) but I think this is not a major issue. Not in this context.

The part I like the least is the risk-return-profile, because I struggle to believe a low-cost version of CryptoPunks could ever fetch a disproportionately high valuation. Said that, the price is much cheaper than CryptoPunks entry-level valuation, therefore I see room for short-term appreciation.

I think we should invest in this, maybe also a bit more than $10k.

PS. Question for the admins (which can apply to this trade but also to our DAO in general): can we acquire something in exchange of newly-issued cMETA? If the answer is yes, we could offer SolPunks to pay for some punks with new cMETA (subject to a vesting period).