The PFP Project Of The Year?
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Is Capsule House the PFP project of the year?
My prediction for the PFP project of the year?
I think it might be Capsule House.
What do I mean by “project of the year”? Here are the criteria I am considering:
Cultural relevance and cache
Staying power
Amazing ROI for holders who hold from the beginning to the end of the year
Inspiration/Archetype that future projects will imitate
When I started writing this post a week ago, Capsule House was still semi-under the radar, but in the past week, it has exploded.
1 week ago, the average sale price of a Capsule was 2e. Yesterday: 4.4.
1 week ago, the average sale price of a Zodiac Capsule was 0.5e. Yesterday: 2.1.
This project has been around since September. For months, capsules were trading for 0.1-0.5. Zodiac capsules were trading for 0.02-0.05 for essentially all of November and December 2021 (which means buyers from just 30 - 90 days ago are now seeing 100Xs). People weren’t even taking them for free because it wasn’t worth the gas.
What did people miss before that they are seeing now? What did early buyers like Anonymoux and Paddy realize that the rest of us didn’t grok?
Here are four key reasons I think this project stands out:
Great Team
Layered and Mysterious
Iconic art
Game Theory Dynamics
Let’s break these down one by one:
1. GREAT TEAM
Back in October, Zeneca_33 wrote a post where he urged NFT buyers to “Bet on people.”
I agree.
This project is the brainchild of two incredible artists, Ronald Kuang AKA Seerlight and Kaejunni. Rounding out the core team is a reputable software engineer and music producer in Eric Gao AKA Oksami.
If you did any research into these creators when the project launched, you would have discovered that these were some great people to bet on.
Long track record of great work for all of them
Seerlight had been getting some great traction with a number of big 1/1 sales to blue-chip collectors like Bharat Krymo, Starry Night Capital and Vincent Van Dough, and Anonymoux.
They had nice followings on other platforms like Instagram and YouTube
Doxxed, real people with reputations to uphold.
The thing is, most people didn’t bother to do research into the team. They just saw a picture of a little capsule and thought, “That’s kind of weird” and moved on. Missed opportunity!
2. LAYERED AND MYSTERIOUS
There is much, much more to Capsule House than appears at first glance.
When you first check out the collection, all you see is something like this:
Unless you dig into the project, you really have no idea that this little capsule is simply the first thing you will see.
All of the capsules eventually “hatch” into full-fledged PFPs like this:
And then, depending on how you “play” the “game,” you can add swappable backgrounds to your PFP like this:
If you’re willing to go big, you can even animate your PFP if you want (more on this later).
When you factor in all of the combinations: Species, attributes, swappable backgrounds, animations, music, you can create a mind-boggling number of possibilities and rarities, which really makes the collection feel more like a bunch of 1/1s.
In short - what you see is decidedly NOT what you get. The collection evolves and the longer you hold and participate, the more layers you will discover.
The team has even hinted there are more surprises to come…
These elements of mystery and surprise are delightful. In this way, it reminds me a lot of Gazers by Matt Kane, which is another example of “you don’t exactly know what you’re getting when you buy.”
I expect that this concept of building in layers of mystery and surprise into a collection will become more common. This trend will then add cultural value and relevance back to the original pioneers like Gazers and Capsule House.
3. ICONIC ART
The more I look at the art, the more I appreciate it. There are so many fun details. The color worlds are bold. There is a lot of personality in each character.
But you don’t have to love or appreciate the art for it to be iconic.
I think art is iconic if it is: (a) instantly recognizable, and (b) often imitated.
With this definition, BAYC is iconic. Punks are iconic. Capsule House has all the makings to be iconic: An instantly recognizable PFP collection that will spawn many look-alike imitators.
Side note: If you enjoy the art, but can’t afford to get into Capsule House, here’s a tip. One funny quirk of popular NFT artists is that many of them still have print shops on their website from before they rose to NFT prominence. While I was snooping around for this piece, I came across Seerlight’s online print shop, where you can buy his work for hilariously good prices. I purchased four 11x17 prints for $50 (0.019 ETH or less than the price of gas for many transactions on Ethereum). I think they will look great lining the walls of one of the many hound-sized secret passageways at the Medici estate.
4. GAME THEORY DYNAMICS
The final piece of the puzzle for Capsule House is that they built in some very intriguing game theory dynamics.
In order to generate a background for your PFP, you have to collect, and then burn, a Zodiac capsule. (A Zodiac can either be minted from a Capsule whose Zodiac has been unclaimed or bought on the secondary market.)
In order to generate an animated capsule with music, you have to collect all 12 zodiacs.
What this creates is a sort of game theory: Some people will buy Zodiacs to burn. Others to flip. Others to hold. Zodiac rarity will shift as people collect and burn, as will the rarities of the underlying capsule PFPs. Perhaps premiums will accrue to the first PFP to become animated, or maybe not.
It all creates a game within a game, where participants compete to do what’s best for themselves, while also relying on the broader ecosystem for everyone’s survival and prosperity.
It is very unclear how it will all play out, which is part of the fun.
FINAL THOUGHTS ON CAPSULE HOUSE
One year from now, in early 2023, I expect Capsule House will be considered a success by many important metrics:
It will still be here.
It will still be culturally relevant.
It will have provided inspiration for projects and it will have spawned a number of imitators.
It will still have a lively and engaged community.
Will it go up in value? That’s up to you to decide.
But no matter what happens, I think there is a TON to learn from this collection for other artists and creators.
Study the masters!
Full Disclosure: As of publishing, I own no Capsule House or Zodiac Capsules NFTs.
🍣 Salmon Bites
A few quick morsels of fun before I sign off:
1. AN IDEA TO CONSIDER
Want to become a better collector?
Read unfashionable and uncommon sources.
In the words of Haruki Murakami, “If you only read the books that everyone else is reading, you can only think what everyone else is thinking.”
This is true of books but also of Twitter accounts, artists, podcasts, etc.
Yes, go ahead and follow the big accounts, but don’t expect alpha - you will be getting the same insight as tens of thousands of other people.
Put in the work to find the undiscovered artists who are making great work. Don’t ignore accounts with a low following if you appreciate their insights. Pay close attention to collections or artists that seem to be hustling extra hard, or have something “special” that you can’t quite put your finger on.
As you get better at noticing these things, and then watching what eventually becomes culturally relevant or valuable, your intuition will improve and you will become a better collector with a collection that stands out from the crowd.
To borrow a framework from Farnam Street, most of us read Twitter to entertain or inform, but the pros read with an eye toward understanding and mastery.
2. ARTIST SPOTLIGHT
I’ve been enjoying the 1/1 artwork by Argentinian cryptoartist Panter Xhita, as well as her commentary and captions.
Here’s her caption from the piece above to noodle on today:
If avatars are ourselves / in the metaverse. / ... / That means / eventually / we are all for sale. / And maybe also / kidnappers. / ... / Willing to give an identity / to the other / for a fair price. / ... / If avatars are ourselves / but our money is not enough. / ... / You can't pick who you are. / Instead, / you are the result of a line of coding. / ... / Or worst: / you are a copy / of someone else's / prestige. / ... / If avatars are ourselves, / we are a game, / a Rolex contest. / ... / A pretty face / for a soda's asset. / ... / Or a lottery / hidden behind / an artistic curtain.
You can follow Panter on Twitter, SuperRare, and her website. Check her out!
3. TWEET OF THE WEEK
Here’s my most popular Tweet from the past week:
This pairs nicely with my other thread on holding your best assets:
I will footnote that there are some incredible flippers with a lot of talent and discipline who will outperform hodlers. But on average I don’t expect that to be the case. Most people overestimate their flipping gains because they don’t factor in taxes and fees - not to mention the daily attention toll of monitoring it all.
4. A HUMBLE REQUEST
Did you enjoy this issue? Please bark about it on Twitter.
Do you have any feedback? Ideas? Questions? Requests?
Whatever you have to say, please head over to Twitter and let me know. Be sure to tag me - @MontyMedici - in your post so that I see it.
Until next Monday.
~ MdM
This newsletter is provided for informational, educational, and entertainment purposes only. It is not intended to be used as legal, tax, investment, financial, or other advice. I may or may not have positions in any projects, tokens, securities, or art that I mention. You should always do your own research, make your own independent decisions, and consider consulting with legal or financial advisors before engaging in any financial transactions.
Really nice! Thank you Monty.