OKHotshot Tells 18 ‘uncomfortable’ truths About Non-Fungible Tokens

OKHotshot, an NFT analyst and blockchain detective, has highlighted his picks for 18 of the most “uncomfortable truths” about the NFT industry.

As @nftherdon Twitter, the analyst became well-known in the industry for his full-time on-chain NFT audits and Discord protection services.

OKHotshot, an NFT analyst and blockchain detective, has highlighted his picks for 18 of the most “uncomfortable truths” about the NFT industry.

On August 27, OKHotshot posted a comprehensive 20-part thread to his 45,000-person Twitter account in which he exposed many of the problems currently impacting NFT industry, ranging from celebrity endorsements to hacking to projects that are always destined to fail.

As @NFTheder on Twitter, the analyst gained notoriety in the sector as a full-time on-chain NFT audit and Discord security specialist.

NFTs are a risky investment.

The NFT analyst shares one of the most sobering “uncomfortable truths”: most people will lose money investing in NFTs.

OKHotshot cautioned that investors should run away if they hear the term “blue chip NFT” because there are “no reliable stable investments in NFTs”. He also advised investors to take profits when they can, rather than investing in “diamond handling”, which he said is not the best way to make money.

64.3% of respondents said they bought NFTs to make money, while 58.3% said they had lost money in their NFT journey, according to a previous Cointelegraph report.

In case you’re interested in NFTs, you must stay current on announcements, because by the time you hear about a new project on Twitter spaces, you’re late.

He emphasized that time is a more valuable asset than any other, and volume and liquidity are more important metrics than price on the floor, so planning ahead is critical.

“Taking profits depends on having buyers,” he said.

Projects typically don’t audit their code or have Discord security, so you are responsible for your own security.

NFTs have a high failure rate.

Be wary of getting in early in a specific NFT project, as tokens frequently fail to stay above the mint price, in addition to ‘derivatives rarely outperforming the original NFT collections,’ according to the NFT analyst.

The quality of Pixelmon’s much-anticipated NFT project stirred up controversy in March—the finalized art for which revealed that it was far below expectations.

OpenSea set a floor price of three Ether on the NFTs as part of the project, but that price has now fallen to just 0.26 ETH, worth about $370 at the time of writing.

OpenSea recorded record trading volumes when Phantabear, another NFT project, was first released in January for 6.36 ETH. However, Phantabear has also seen a substantial decline in value since then, with the minimum price at the time of writing being 0.32 ETH ($463).

A study conducted in March by blockchain analytics firm Nansen revealed that most NFT collections either lose money or result in a net loss.

People who are famous and have influence are ignorant.

There are several shared “uncomfortable truth” posts that are critical of celebrities and influencers.

Hotshot noted that celebrity NFT projects are notoriously bad investments, regardless of what influencers claim or imply through social media posts.

In addition, he said that “Web2 marketing is extremely ineffective in the NFT market.”

NFTs issued by celebrities are notoriously bad investments.— OKHotshot (@NFTherder) August 27, 2022

Cointelegraph recently reported on the warning letters posted by a consumer watchdog group to nearly 20 celebrities for shilling NFTs.

19 celebrities were called out for shilling NFTs.

OKHotshot believes that NFTs don’t have any intrinsic value. In addition, the analyst argued that NFT projects without sale terms aren’t worth anything, and that NFT benefits do not travel to downstream purchasers unless specified in the terms.

Although he thinks that hype and market speculation are still controlling NFT prices, he thinks that savvy investors can ‘take advantage of this.’

“NFT projects without sale terms are selling you a token ID with a hyperlink to an off-chain asset. Without terms, nothing is defined. You can’t own a hyperlink so in all likelihood you bought nothing.”