GM frens,

It’s been an entertaining month in the Web3 World.

This month, NFT collectors watched from the sidelines as two top tier celebrities sought to launch their own NFT projects — both of which were resounding failures.

In today’s edition of The Ground Floor we will be breaking down why these projects flopped, and more importantly what we can learn from them.

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Celebrity NFT Cash Grabs

Breaking down the celebrity NFT projects that continue to disappoint...

Total NFT sales in 2020: Less than $83 million.

Total NFT sales in 2021: More than $17.5 billion.

With figures like these, it should come as no surprise that a long list of high profile celebrities launched their own NFT collections in 2021.

Great Expectations, Poor Execution

Despite the billions of dollars being spent on NFTs during this previous bull market, an overwhelming percentage of these celebrity backed projects quickly depreciated in value as they failed to provide any meaningful value to their token holders.

Nonetheless, a lot of these collections did succeed in selling out their NFT collections with celebrities such as Grimes netting a cool $6 million from her NFT collection, and Snoop Dogg netting over $44 million from a single drop in 2021 respectively.

These are all but two examples of what is a very long list of celebrities who sought to capture cash from their audiences during this time.

Listed are some of the highest profile celebrities to launch NFT collections, with the full list likely five times longer than the names listed below…

The Past vs The Present

There are many things NFT collectors are willing to tolerate during bull markets that are seemingly deemed unacceptable in bear markets.

Front and center of this — celebrity cash grabs.

On the 1st of July, Chris Brown who boasts 115 million followers on Instagram & 32 million followers on Twitter released his inaugural NFT collection.

With an audience of ~ 150 million people on social media, you’d think selling out an NFT collection would be a walk in the park, right?

Five days later, on the 6th of July a grand total of 246 of the 10,000 NFTs in his “Breezyverse” collection were minted for the high price of 0.285 ETH ~ $315.

In the time since the team has adjusted their pricing — lowering the price to $199 which has marginally moved the needle with just over 700 of these NFTs sold.

Even with these updated figures, less than 0.0000047% of Chris Brown's 150+ million followers purchased one of these NFTs.

Next Up Is Kevin Hart…

Following in the footsteps of Chris Brown, Kevin Hart decided to launch an NFT collection last week.

Just like Chris Brown, Kevin Hart released 10,000 NFTs as part of his ‘Confessions from the Hart' collection, and just like Chris Brown this collection failed to sell out.

One week later, 2,151 of these NFTs have been minted — accounting for less than 22% of the total supply, despite the fact that the team charged a mere $65 per digital asset.

Subsequently, the floor price of these NFTs has fallen close to 50% since the project was launched, despite Kevin Hart having over 37 million followers on Twitter, 149 million followers on Instagram, with an additional 29 million followers on TikTok.

Conservatively, we can estimate that Kevin Hart is followed by well over 150 million unique users online which means less than 0.000015% of his followers proceeded to purchase an NFT. 🤯

The Lessons We Can Learn

The NFT community has been forced to learn the hard way that more often than not celebrity endorsed NFT collections aren’t worth the investment.

Additionally, it’s also becoming crystal clear that the number of followers an NFT project, or the people supporting said project has is nothing short of a vanity metric.

That said, there’s a very short list of celebrities who have successfully launched and supported an NFT project with entrepreneur Gary Vaynerchuk having so far delivered an estimated 17x ETH return (at the time of writing) to his fans with his VeeFriends Series 1 collection that launched in May 2021.

Looking Forward

There was once a time whereby anyone with a large enough audience could launch an NFT project and the project's ability to successfully mint out was all but guaranteed.

Thankfully, those days are well & truly in the past, and anyone who’s interested in launching a successful NFT project needs to reconcile the reality that what worked in the past will not work in the present moment.

It’s our perspective that this is a very healthy sign as it highlights that the Web3 World is maturing, with a declining appetite to support bad actors.

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3 Things You Need to Know…

1) PROOF Acquire Divergence

Convergence continues in the NFT space.

This time, Kevin Rose’s PROOF Collective have acqui-hired an engineering team ahead of plans to launch a “social universe.”

Keep a close eye on what the PROOF team builds in the coming months!

2) OpenSea Cuts Costs

The biggest NFT marketplace in the world, has laid off 20% of its employees.

Many will ask why they hired so aggressively during the latest bull market - but the reality is that if they didn’t, they would not have been able to sufficiently cater to increased demand.

If you consider this, and the fact that they have made a couple of big acquisitions in recent times — you can see why this is likely the right decision.

3) Art Blocks Be Running

Maybe Art was, and is still the best NFT use case to date?

As said on the latest Floorcast episode; it started with art, and it ended with art.

Art Blocks and generative art more generally have been doing serious volume of late.

Is this a sign that NFT collectors are getting bored of NFTs that have so many complex mechanisms attached to them?

Tweet Of The Week

18 months ago, GameStop was being short squeezed as this meme stocks valuation rose to record highs!

Fast forward and they’ve now launched a very successful NFT platform — doubling the volume Coinbase’s NFT platform has seen to date.

Thanks for the read,

See you next time! — OB1 & Pet & Corwin

This newsletter is for informational purposes only and does not constitute financial or business advice to any person or entity.