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Emin Gun Sirer of Avalanche (AVAX) expressed: It seems essential that NFTs, being fashion and conspicuous consumption goods, lose, and in fact need to lose, their coolness factor over time. The same way we can’t buy a wardrobe once and be cool forever, we’ll need new hip avatars regularly.
Every item, from paintings to clothing to NFTs, experiences some decay in hipness over time. Let lambda be the time it takes for some item to go from its maximum coolness to half its coolness. Think of it as the half-life of cultural coolness.
So, if lambda for something is 1 year, that thing is half as cool in a year. In 6 years, it loses 98% of its coolness, starts looking like your grandfather’s wristwatch.
My guesses at some lambdas: Christmas ornaments: 100+ years Paintings: 5-10 years Watches: 2-4 years Clothing: 6-12 months.
NFTs probably have the shortest lambda I know. It strikes me that we can actually measure this, simply by counting the number of cryptopunk/avaxape avatars over time and fitting a curve. My guess is that NFT popularity half-life is somewhere around 4 weeks.
Within an NFT series, value seems Zipf distributed. Some legendary NFTs commands the highest value, and the value of other NFTs seems proportional to 1/i^alpha, where i is their rank and alpha is some constant.
I’m totally spit balling all of this, and would love it if someone were to do an empirical study.
But what does all of this mean for NFT holders? It seems to make the most sense to buy multiple NFTs and play the law of large numbers than to bet big on a small number of cards.
Get ready for NFT values to shift from older cards to newly released series. This turnover is essential to any luxury good.
Expect to replace your crypto punk and other NFT goods regularly with whatever new NFT is cool these days. By regularly, I mean something like 3*lambda, less if you’re really fashion conscious, more if you’re more budget oriented.
Let me just end on this note: it’s amazing to watch new internet-native assets being born on top of blockchains.
Community response: Replace all the NFTs without intrinsic value. How we could put intrinsic value to NFT cards. I believe intrinsic value of NFTs and the NFT project that consider this fact will be more successful compared to others.
NFTs are fungible fads, in other words. I wonder what lambda is for blockchains themselves.
