I just came back from vacation to find Web3 in entire disarray. Bitcoin is sub-$30,000. Ethereum is testing it’s merge. Solana’s network went down again. Luna 2.0 failed. New York City banned carbon-based crypto mining. The SEC has classified many crypto currencies as either commodities or securities. The most popular NFT projects are “We Are All Going to Die” (WAGDIE) and “goblintown.wtf”. A lot has happened in a few weeks.

The crypto losses make some sort of sense with inflation spiraling out of control and equity markets teetering on edge of a “recession”, although it has felt like a recession for months now. The macro picture is bleek at best, with many people happy to hold cash on the sidelines, losing purchasing power at a 10% rate.

Crypto is all correlated, so nearly everything is down. If you prescribe to crypto being a large-beta play, then it makes sense that equity markets down 20%, means crypto markets down > 20%. Bitcoin and Ethereum are at bargains if you are still a believer. The funny thing is that NFTs (priced in Layer-1 currency) are also down. It’s almost like a double discount, NFTs down relative to crypto and crypto down relative to fiat, which doesn’t make sense to me.

You may be hearing this everywhere, but this is the period to start your empire. If you are new to markets, you should know that you should be buying when others are fearful. The conviction shown at this time will be reflected in your wealth years down the road. If you were a believer in a project at 5 Eth when Ethereum was at >$4,000, you should be a believer at half that price.

This just goes to show that a large group of the Web3 community are here for the good times only. The names and faces of Web3 are still here, as they have been for crypto winters in the past, and will still be here for crypto winters of the future.

Now onto the NFT space: how did goblintown and WAGDIE become the talk of the town? Both were essentially just a social media page and a smart contract. No roadmap. No Discord. Pure hype. The nice thing underlying both projects is that by offering free mints, they are not selling anything and, as such will not be considered a security. While they won’t be able to make any mint profit or royalties, they created a network for free. Now, they can sell merchandise or monetize in some other format that will not tip off the SEC.

Pure network effects is said to be the Holy Grail. The cost of creating this hype was essentially zero (before paying the developer and graphic designer). It should be interesting to see the adoption of free mints in the future and what these two projects will be able to offer to their holders.