Studying the crypto space and how it functions brings us to understand there are different strategies that traders apply to make a profit. Some invest their cryptos and hold for some time to sell later, while others simply trade daily, weekly or monthly, depending on the position they take. Celebrities have learned about these digital currencies and are investing. Two types of tokens exist in cryptocurrency, fungible and Non-Fungible tokens (NFT). John Cena, a renowned artist, recently indulged in NFT sales. Before giving details on the outcome of these sales, we will brief you on what NFTs are.
NFT, a non-fungible token, is a type of cryptographic token, each instance of which is unique and cannot be exchanged or replaced by another similar token. An NFT functions like a cryptographic token, but unlike cryptocurrencies such as Bitcoin, are not mutually interchangeable, in other words, not fungible.
The reason non-fungible tokens were created was so that they can transfer unique items to the blockchain. Each NFT is unique and exists in a single copy. It cannot be separated, and all information about its author, buyer, and all transactions with it is securely stored in a blockchain. Notice that crypto enthusiasts do not create NFTs based on the ERC-20 network. Rather, it is created based on the ERC-721 standard. Anyone who owns the intellectual rights to the artwork or a product that exists in digital form can create their NFT token.
We know John Cena as a famous wrestler of the World Wrestling Entertainment (WWE), TV presenter, and actor. He, alongside other WWE folks, recently tried to sell a 500 series of limited and platinum NFTs, including physical collectibles like a WWE Championship Title Belt, a hat, a shirt, a towel, and an autographed picture. Those who bought these were eligible for a once-in-a-lifetime experience for two at WrestleMania 38 in 2022. The gold tier comprised 500 ‘gold packages’, which cost only $1000 each. These packages, which he thought to be relatively cheap, sold only 37 items. We could presume that they considered this idea because of successes recorded by other crypto traders like Kurt Angle, who launched the Kurt Angle Gold Card NFT at $150. According to Luchacoin, this brought about huge sales as all 100 editions were sold. However, for John Cena, this was not the case. He referred to the project as a catastrophic failure.
According to the wrestler, he says “I talk a lot about failure. This idea failed. Why was it $1000? Because I and the folks at WWE thought it was a fair price point. We were wrong.”
You can admit that even though some NFT projects experience failures, there are many NFT projects that have been a tremendous success. What could be the secret to their success? Could it be the pricing? Note that in an NFT space, what matters is the value of what you are offering as well as what people love. Consider selling a pullover in a traditional market when the weather is not cold. That eventually will not produce any profit for the seller as it is not what people need at the moment, making it of no value. This is the same with NFT projects. It is not about mass production, but what people love. In addition, there is the need for community engagement, which could be considered the most intriguing aspect of success in an NFT project. The community you build is tantamount to the turnout you get. Sometimes some projects fail because they do not have an engaging community. It is therefore good that when creating an NFT project, a strong community should be built to support the project.
Overall, the other successful NFTs were as a result of their relatively low prices that led to great returns. Could one assume that the problem with John Cena’s token was the price? Concluding on this could be biased, as it is not the first NFT failed project. Other cryptocurrencies and noon-interchangeable tokens have failed for one reason or the other. It is just to let you know it is not always a win-win. Failures could occur sometimes.
With its ongoing developments and technology, the crypto business never ceases to amaze us. As a result, it is all too easy to overlook something and become perplexed by the crypto market. To avoid this, the first European crypto trading site bit4you created the crypto Academy educational section. There, you will find a wealth of useful materials dedicated to a wide range of crypto-related issues. Furthermore, with the bit4you Demo mode, you may test as many trading techniques as you want and follow the business without taking any risks by receiving $100,000 in virtual funds on your account. Do not hesitate to start your fascinating crypto journey with bit4you!
Fenui Perpetua, Team bit4you