Put your holders first or go to zero.

If you are the founder of an NFT project, never forget this principle when making decisions. GODA's failure reveals this to us very well.

Many have speculated on what makes an NFT project successful. But it’s actually pretty simple. Put your holders first. If you follow this simple rule, the world is yours. Deny it and your project will go into a death spiral. Three quick examples:

GODA is one of the hottest NFT projects in mid-2022. The promise is simple and ingenious: own a GODA Pass card and art NFTs from popular artists multiple times a year. At the height of GODA’s popularity, the reserve price rose to over 10 ETH.

Today it has dropped to 2 ETH. So what happened? Are the artists on GODA bad? Well, no. The only thing GODA did was break the rule of “put your holders first”.

The last piece of art for GODA is from Hilma af Klint. Impressive artist. Problem: The promise of the GODA Pass to guarantee access to all GODA drops has been broken.

The launch of Hilma af Klint was a completely public sale. Although holders received a discount, this was clearly a violation of GODA's promise to holders (screenshot of the website below). Therefore, they did not put holders first, but profits first. Therefore, this consequence was also foreseeable.

A similar situation happened with RTFKT. For several months, RTFKT's MNLTH was considered one of the best ideas in the NFT space. A box to accumulate future airdrops. Holders would occasionally receive new MNLTH rewards and could decide for themselves if and when they wanted to be made public. However, at the end of 2022, the idea was abandoned.

Not only were holders effectively forced to reveal MNLTH2, but instead of receiving innovative, cool content from MNLTH, they were given discount coupons for RTFKT’s Cryptokicks IRL.

This process also caused the value of MNLTH to drop from 6.59 ETH to less than 0.6 ETH today, and the current floor price is only a fraction of the peak.

I can also use a counter-example to support my point. The blue chip project Azuki does this very well. Owning an Azuki will airdrop two Beanz to your wallet. There is no public sale. 100% putting the holders first.

Ultimately, this is arguably the only secret sauce in the NFT space. While many may subconsciously know this, even experienced teams violate it time and again to make short-term profits.

All counter-examples show very well that this calculation will never work. GODA may have earned some ETH through public auctions, but today its royalty income is much less. At its peak, GODA earned over 30 ETH/day. Today it is < 1 ETH/day.

Rewarding holders always generates long-term returns for the project itself. Projects that do this will thrive. Projects that don’t will go into a death spiral. It’s never too late to return to this simple, unadorned rule.

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