NFT Project Roadmaps Guide

🧵/ (part of https://t.co/A5k3ybDmVi )

Roadmap Analysis 1: Marketing, whitelisting, hype, Discord, billboards, updated website, etc.

A common category of items in roadmaps is basically marketing, but some stuff is really purely about directly building excitement.

— Daniel Tenner (swombat.eth) (@swombat) November 24, 2021

2/There's nothing wrong with marketing. In fact, an NFT project with no marketing is dead in the water.

However, marketing does not create sustainable value for the project. It's just a way to attract more investors.

— Daniel Tenner (swombat.eth) (@swombat) November 24, 2021

3/Yes, sure, "building a brand" and all that, but as per my review, even BAYC, "the ultimate brand", has concrete utility ( https://t.co/0RgWfuWGbu ) - and likely were delivering on that long before they became the Apple of the NFT space.

— Daniel Tenner (swombat.eth) (@swombat) November 24, 2021

4/So when I see anything that's around building hype, setting up or ramping up Discord, advertising, doing stuff on the website... I just ignore it.

Doing a good marketing job is table stakes for NFT projects. It's not something worth stating on the roadmap imho.

Item 1, done.

— Daniel Tenner (swombat.eth) (@swombat) November 24, 2021

🧵/(part of https://t.co/A5k3ybDmVi )

Roadmap Analysis 2: Rewards, giveaways, raffles, cash prizes, lambos, scavenger hunts...

Spoiler: I tend to discount those too. They are a special crypto/nft-popular kind of marketing. Imho they don't make a whole lot of sense.

— Daniel Tenner (swombat.eth) (@swombat) November 24, 2021

2/Why? Because they are actually draining the financial resources of the project to give them right back to the investors. If the project is actually building something, it should be using the money it raised to build that thing. I elaborated on this here: https://t.co/FBRpRSbXyb

— Daniel Tenner (swombat.eth) (@swombat) November 24, 2021

3/Whether this is an amber or a red flag depends on how much of it there is. If the project is full of giveaways... it's not a sustainable project, it's some kind of lottery where the founders will probably walk away with most of your money.

— Daniel Tenner (swombat.eth) (@swombat) November 24, 2021

4/In moderation, giveaways can be useful to get people excited. And, as mentioned before, marketing and hype are actually useful to NFT projects so this tool can definitely be used well.

But even then, it's not long term sustainable value.

Discount, and move on.

Next!

— Daniel Tenner (swombat.eth) (@swombat) November 24, 2021

🧵/(part of https://t.co/A5k3yblLwI )

Roadmap Analysis 3: Floor sweeps

These still appear surprisingly frequently in roadmaps. I consider them a generally red-ish amber flag.

Floor sweeps add absolutely nothing to the project. Not only that, but they largely don't work.

— Daniel Tenner (swombat.eth) (@swombat) November 24, 2021

2/As an investor, of course, everyone loves the idea that "the project" will come and help the floor move up. But it's a bit like the Baron Munchausen pulling himself out of the swamp by his own bootstraps.

— Daniel Tenner (swombat.eth) (@swombat) November 24, 2021

3/Investors gave the project money to do <something> and the best thing that the project can think to do is to buy back the NFTs from the investors.

I mean, I see how it might seem appealing as a tactic, even to a sensible project, but it's appallingly self-referential.

— Daniel Tenner (swombat.eth) (@swombat) November 24, 2021

4/#LazyLions have had, for as long as I was there, the "Roars>Floors" meme to convey that a successful project focuses on something other than the floor (though ironically they did conduct a floor sweep at least once).

But at least they didn't have it on the god damned roadmap.

— Daniel Tenner (swombat.eth) (@swombat) November 24, 2021

5/To put the floor sweep ON THE ROADMAP seems... bizarre. Like, "we know that a bunch of y'all investors are going to see the project is worthless so we'll use your own money to try and cover that up".

— Daniel Tenner (swombat.eth) (@swombat) November 24, 2021

6/And yet it happens. I've seen it.

And when I see it, I add a mental red flag, and I think you should too, if you want to invest in projects with a long-term, sustainable outlook.

NEXT.

— Daniel Tenner (swombat.eth) (@swombat) November 24, 2021

🧵/(part of https://t.co/A5k3ybDmVi )

Roadmap Analysis 4: Brand partnerships

It sounds great, right? The project you're investing in is planning to partner with brands! How awesome! Wait till you see the floor when Coke and Nike partner with Mad Mosquitoes!

— Daniel Tenner (swombat.eth) (@swombat) November 24, 2021

2/*screeching record stop sound*

Are you kidding me?

Any brand worth their salt got there because they were protective of who they partnered with.

I ran a business for 10 years, and believe me, people who have valuable brands do not do "partnerships" easily or quickly.

— Daniel Tenner (swombat.eth) (@swombat) November 24, 2021

3/Yeah, some brands are more switched on than others and might test the floor by buying an NFT and seeing what happens (e.g. Visa buying a cryptopunk or Arizona Iced Tea buying a lion).

That's a far cry from any sort of "brand partnership".

— Daniel Tenner (swombat.eth) (@swombat) November 24, 2021

4/Before a project can realistically suggest they're going to do "brand partnerships", they need to already be mega-successful. BAYC can probably do "brand partnerhsips". They'd still have to spend a year in meetings with brand managers, but it's possible.

— Daniel Tenner (swombat.eth) (@swombat) November 24, 2021

5/A project listing "brand partnerships" on their roadmap before being an established bluechip is either just putting it there as filler or delusional. Neither of those bodes well.

Amber or red flag depending on what else is on the roadmap.

NEXT (and last for today)

— Daniel Tenner (swombat.eth) (@swombat) November 24, 2021

🧵/(part of https://t.co/A5k3ybDmVi )

Roadmap Analysis 5: Some kind of $TOKEN

Let's finish with one that's all the rage right now. "We're going to release our own token", usually with some kind of funny name.

Urgh.

— Daniel Tenner (swombat.eth) (@swombat) November 24, 2021

2/Tokens, which are one of the fundamental building blocks of web3, are awesome. I 100% support the tokenisation of most things.

BUT YOU HAVE TO HAVE A REAL-WORLD PURPOSE FOR THAT TOKEN

Otherwise it's just trash.

— Daniel Tenner (swombat.eth) (@swombat) November 24, 2021

3/Now, for some projects a token might well make sense. But if the roadmap lists a token without really carefully explaining how it makes sense, I consider it a likely sign that the founders are in to make some money.

How can a token make sense?

— Daniel Tenner (swombat.eth) (@swombat) November 24, 2021

4/The key questions I ask myself to decide if a token makes sense is:

Why would anyone outside the project ascribe any value to this token?

— Daniel Tenner (swombat.eth) (@swombat) November 24, 2021

5/The key is that interface between the world of the project, and the rest of the world. If there is no reason for someone outside the project to buy the token, then, functionally, it is just another way to redistribute funds inside the project.

— Daniel Tenner (swombat.eth) (@swombat) November 24, 2021

6/Now, I'll carve out an exception here, which is where the token is really just for internal use to help facilitate some kind of internal market, for access to some sort of scarce resource inside the project.

— Daniel Tenner (swombat.eth) (@swombat) November 24, 2021

7/For example, if Vitalik started a project and "asking questions from Vitalik" was a scarce resource, and there's a $VIT token that you accrue and you can ask a question from Vitalik (whose time is scarce) by spending the token... ok. That can be sensible.

— Daniel Tenner (swombat.eth) (@swombat) November 24, 2021

8/But importantly, even if that's true, the token will be worthless to anyone outside the project unless it has value to those outside the project.

So in such a case, it's not a red flag, but it's still not something that adds long term sustainable value.

— Daniel Tenner (swombat.eth) (@swombat) November 24, 2021

9/In short, in most cases, if there's mention of a token, it's probably a red flag, maybe an amber flag in some exceptional cases.

Enough for today - the thread of thread will continue tomorrow!

Remember to follow and RT and all that :-)

— Daniel Tenner (swombat.eth) (@swombat) November 24, 2021

🧵/(part of https://t.co/A5k3ybDmVi )

Roadmap Analysis 6: Staking

Oh boy.

As far as I can tell, staking has noble origins. The purpose of staking in crypto is to enable proof-of-stake algorithms, which are much more environmentally friendly than proof-of-work.

— Daniel Tenner (swombat.eth) (@swombat) November 25, 2021

2/Of course, that's not at all happening in NFT projects. There is no proof algorithm in your average NFT project that benefits from staking (if there is one, please let me know in the responses!).

— Daniel Tenner (swombat.eth) (@swombat) November 25, 2021

3/Instead, staking in NFT projects exists for one purpose and one purpose only: to stop people from listing their NFTs, therefore reducing the supply available for purchase, therefore driving the price up.

— Daniel Tenner (swombat.eth) (@swombat) November 25, 2021

4/In my thread about NFT-powered clubs ( https://t.co/kzuL1oQpmE ) I mentioned the inexorable arithmetic that will make good clubs go up in value over time.

Staking is simply an artificial attempt to force that to happen.

— Daniel Tenner (swombat.eth) (@swombat) November 25, 2021

5/Often the reward for the staking is a token (see the previous instalment for my opinion of that - https://t.co/b8OpFdifwo ). Usually it has some kind of worth that will be defined later (i.e. no worth). Or maybe it becomes part of another internal, redistributive game.

— Daniel Tenner (swombat.eth) (@swombat) November 25, 2021

6/Now I'm not saying that staking never has a place in any project. I can imagine some kind of vision where it makes sense. For example, where the NFT maps to certain rw resources and a longer-term commitment of those resources is needed. Staking could model that.

— Daniel Tenner (swombat.eth) (@swombat) November 25, 2021

7/But in most projects, that's not the case. And even then, in my experience it's rather tenuous (if the resources are already detached from the NFT, what does it matter if it's staked?).

So, staking is an amber flag. Useless, no sustainable value-add, pure floor focus.

Next.

— Daniel Tenner (swombat.eth) (@swombat) November 25, 2021

🧵/(part of https://t.co/A5k3ybDmVi )

Roadmap Analysis 7: Community funds

This one is a bit more ambiguous. In some cases, it can be evidence of outright stealing. In other cases, it's just a bit of weirdness unlikely to add much to the project.

— Daniel Tenner (swombat.eth) (@swombat) November 25, 2021

2/Let's deal with the thievery first.

I've argued before, and firmly believe, that money raised by a project during mint belongs to the project, not the founders ( https://t.co/qdJ6vye7Om ), in the same way that money raised by a startup belongs to the company.

— Daniel Tenner (swombat.eth) (@swombat) November 25, 2021

3/In some cases, it appears that the founders consider the mint money their payday. They walk off with hundreds of Eth, and then are oh so generous to leave some small amount in the "community wallet" so the project can, you know, pay for something some day.

— Daniel Tenner (swombat.eth) (@swombat) November 25, 2021

4/If you do that by mistake, because you didn't understand what an NFT project was... ok, maybe I'll give you a pass. If you do that after reading this thread, sorry but you're a fraudster.

— Daniel Tenner (swombat.eth) (@swombat) November 25, 2021

5/As an investor, I would strongly encourage you to demand a clear answer from the project as to where the mint money is going. Some amount paid to founders is reasonable. If the lion's share goes to them, it's not.

So, back to community wallet.

— Daniel Tenner (swombat.eth) (@swombat) November 25, 2021

6/If the "community wallet" is what's left of the mint after the founders have robbed the project, a pittance left behind to be able to pretend that the project has means to do things... that's a red flag and imho you should run away from that project.

— Daniel Tenner (swombat.eth) (@swombat) November 25, 2021

7/It's also a red flag that can be applied retroactively. For projects you're in right now, that you invested a while ago... is the team willing to provide any transparency over where the money is going, or has gone?

Are they hiding a lambo or two, bought with project funds?

— Daniel Tenner (swombat.eth) (@swombat) November 25, 2021

8/It can be an amber flag if the team has, reasonably, split the pot into "dev funds" and "community funds", where most funds are controlled by the team to build the project, and a portion are given to the community to be more DAO-like, give them a sense of owning something.

— Daniel Tenner (swombat.eth) (@swombat) November 25, 2021

9/I still consider that amber and discard it when I see it on a roadmap, though - because unless the purpose of the project is collective investment, it's a form of giving the funds back to the community and saying "we don't know what to do with all this money lol". pic.twitter.com/DHqmn7HpvW

— Daniel Tenner (swombat.eth) (@swombat) November 25, 2021

10/The only context where I'd see a "community wallet" as a green flag is if the purpose of the project is explicitly "collective investment" - i.e., pooling resources together to buy stuff no single investor could afford and share the benefits.

Otherwise, ignore this.

Next!

— Daniel Tenner (swombat.eth) (@swombat) November 25, 2021

🧵/( part of https://t.co/A5k3yblLwI )

Roadmap Analysis 8: Airdrops, companions, serums, etc

So, those are tricky, because they can have value and have proven, e.g. in BAYC's case, to have enormous value.

The key is context and timing.

— Daniel Tenner (swombat.eth) (@swombat) November 25, 2021

2/Here it all depends on what the project is intending to achieve.

Airdrops/companions serve a few valid purposes:
- fun (in an artist launchpad)
- bring in more members (in a club)
- raise more funds (any project that needs it)

— Daniel Tenner (swombat.eth) (@swombat) November 25, 2021

3/In a project like @robotosNFT, the first two items were the primary reason for the robopets. It enabled new fans to join the project at a lower price point, and they were used in fun internal games, part of the artist experience Pablo invited people into.

— Daniel Tenner (swombat.eth) (@swombat) November 25, 2021

4/In BAYC, the primary reason for the MAYC was, I believe, to expand the size of the club. Since at that point BAYCs were way out of the price range of their ideal members, it made a lot of sense.

— Daniel Tenner (swombat.eth) (@swombat) November 25, 2021

5/But notice that in both those cases, the project was successful *before* it did an airdrop or companion mint. The additional NFT was integrated into an already successful, relatively mature project. And that's the key point that makes those useless on roadmaps.

— Daniel Tenner (swombat.eth) (@swombat) November 25, 2021

6/If your project is already successful and you drop some kind of companion for <reason that makes sense>, great.

But if your project is not successful, a companion will not get you there. Quite the opposite.

— Daniel Tenner (swombat.eth) (@swombat) November 25, 2021

7/If you're in a club, and the proposition of that club is poorly defined, it's unclear who the ideal members are, and people are leaving the ship already... bringing in an extra few thousand people who also don't know what they're buying won't solve the club's problems.

— Daniel Tenner (swombat.eth) (@swombat) November 25, 2021

8/So in short, airdrops and companions make no sense on roadmaps.

OF COURSE, if it makes sense, the project will drop a companion.

But until then, it's zero value add to anyone - except the team who maybe get to do another cash grab (if it's a paid companion).

— Daniel Tenner (swombat.eth) (@swombat) November 25, 2021

🧵/(part of https://t.co/A5k3ybDmVi )

Roadmap Analysis 9: Merch

Well, there's nothing wrong with Merch. It's nice. I like it. I was at an NFT meetup yesterday and I'd have liked to have some kind of shirt or hoodie with my PFP on it.

— Daniel Tenner (swombat.eth) (@swombat) November 26, 2021

2/But the reason why I'd want that is because my PFP is already something I value. It's not the Merch that makes the PFP valuable, but the opposite.

Nothing wrong with saying that you're going to have merch. It's kind of obvious though, kind of like saying you'll have a Discord.

— Daniel Tenner (swombat.eth) (@swombat) November 26, 2021

3/And even if the project itself doesn't release any merch, people can get their own printed anyway these days.

So merch is a kind of non-thing, an irrelevance in terms of building long term sustainable value for the project.

— Daniel Tenner (swombat.eth) (@swombat) November 26, 2021

4/A typical roadmap has 5, maybe 8 items on it. If merch is one of those 5, what other stuff could have been on there that might have been more exciting?

Ignore "merch" as a roadmap item.

Next!

— Daniel Tenner (swombat.eth) (@swombat) November 26, 2021

🧵/(part of https://t.co/A5k3ybDmVi )

Roadmap Analysis 10: A game, or, most likely "A PtE game". Also: quests and other minigames.

Alright.

*cracks knuckles*

— Daniel Tenner (swombat.eth) (@swombat) November 26, 2021

2/There are definitely contexts where a game makes sense. For example, for an artist launchpad like @robotosNFT, adding fun little games that people can play to engage more with the artistic universe of Robotos makes a lot of sense. w/ artist launchpads, fun is part of the value.

— Daniel Tenner (swombat.eth) (@swombat) November 26, 2021

3/And gamifying various aspects of the community can be pretty cool too. #LazyLions's recent "referral app" is a fun little trading card game on top of the referral mechanism. It's clever and enjoyable for a little while. It's not "a game" though - the meat is the referrals.

— Daniel Tenner (swombat.eth) (@swombat) November 26, 2021

4/Many projects, including, to my dismay, the Lions, have some kind of game listed as the ultimate destination of their roadmap. Usually it's a PtE game, which imho makes it even worse.

— Daniel Tenner (swombat.eth) (@swombat) November 26, 2021

5/Galactic Apes has "missions" that you can send your apes on, which result in <other benefits>. And of course the Wolf game ponzi is entirely "a game".

I've made my opinion of PtE games clear before: they're basically gambling. https://t.co/9yPCjoMNfQ

— Daniel Tenner (swombat.eth) (@swombat) November 26, 2021

6/Since writing that I've iterated to a more neutral term: they are just redistributive processes.

A PtE game just redistributes funds among the players. If the players are the investors in the project, the PtE game just shuffles money around between them and creates no value.

— Daniel Tenner (swombat.eth) (@swombat) November 26, 2021

7/The only way that a purely redistributive mechanism like that can *appear*, temporarily, to create value, is by bringing in more investors. In other words, a PtE game can grow by being a ponzi.

— Daniel Tenner (swombat.eth) (@swombat) November 26, 2021

8/At the same time, having "a game" on the roadmap seems insanely popular in the NFT space. So many projects have that as their ultimate destination. I'm not sure why. It doesn't seem sensible to me.

— Daniel Tenner (swombat.eth) (@swombat) November 26, 2021

9/The very first app I touched on a computer was a game. I've been an avid gamer since I was 8 years old. I love games.

And let me tell you: the vast majority of games are trash. Building a good game is Really Hard (tm).

— Daniel Tenner (swombat.eth) (@swombat) November 26, 2021

10/So even if the project is genuinely trying to build a game... well, unless that is in fact the whole purpose of the project, to fund development of a game, why would they stick that in there?

— Daniel Tenner (swombat.eth) (@swombat) November 26, 2021

11/It's like if you funded a project to design and build a car, and as the last step of the project, they had "become a brain surgeon".

Wat?

— Daniel Tenner (swombat.eth) (@swombat) November 26, 2021

12/Building successful NFT projects is already pretty hard. Building successful games is even harder. Building PtE games is just more internal redistribution.

So, when I see a game on the roadmap?

— Daniel Tenner (swombat.eth) (@swombat) November 26, 2021

13/If it's an artist launchpad: maybe a green flag (if not PtE).

If it's a game mechanic around something else (e.g. whitelists): ignore it, and look at what is wrapped inside.

If it's a PtE game: amber to red flag depending on how central it is to the project.

Next.

— Daniel Tenner (swombat.eth) (@swombat) November 26, 2021

🧵/(part of https://t.co/A5k3ybDmVi )

Roadmap Analysis 11: Charity donations

I'll disclose upfront: I'm not really a charity-donating person. I like to do good in the world directly, through, for example, writing these threads to help people not get scammed.

— Daniel Tenner (swombat.eth) (@swombat) November 26, 2021

2/But I understand that some people do like donating to charities. And if done knowingly and explicitly, it can be a very reasonable thing to do.

There are some projects whose entire purpose is to be charity vehicles. They're like buying a raffle ticket, but more fun. Ok.

— Daniel Tenner (swombat.eth) (@swombat) November 26, 2021

3/For other projects, making a charity donation can be a nice thing to do. It could be used to offset Ethereum's carbon footprint. Or just to support the animal on the PFP. Whatever. It's a nice thing. Ok.

— Daniel Tenner (swombat.eth) (@swombat) November 26, 2021

4/But what it isn't is a substantial value add to the project. When I see "we'll donate <whatevs> to charity", I just ignore it. It tells me nothing about how the project will generate value. It's neither good nor bad. It's just neutral. Same as when a bank donates to charity.

>

— Daniel Tenner (swombat.eth) (@swombat) November 26, 2021

🧵/(part of https://t.co/A5k3ybDmVi )

Roadmap Analysis 12: "Exclusive whitelists in other projects, collaborations, etc.

This one is contextual. Most of the time I dismiss it but not always.

— Daniel Tenner (swombat.eth) (@swombat) November 27, 2021

2/Let's start with the positive cases. Collabs, whitelists, etc, make sense on a roadmap when two things are true:
1) it's aligned with the purpose of the project
2) the project has something to offer to attract the good whitelists

— Daniel Tenner (swombat.eth) (@swombat) November 27, 2021

3/So eg an investment club like @NFTLlama / Llamaverse (discl: I'm invested) - the club has solid marketing oomph and a thriving community and so it can offer access to that marketing to potential collabs. And since it's an investment club, it's in line with the purpose.

— Daniel Tenner (swombat.eth) (@swombat) November 27, 2021

4/Many projects pitch those collabs or exclusive whitelists even though the project is not really an investment club at all, though. Or, even worse, they offer exclusive whitelist to their next project.

That's just wishful thinking. And a bit mean-spirited.

— Daniel Tenner (swombat.eth) (@swombat) November 27, 2021

5/If your current project does well enough that your next project is worth having a whitelist on - I damn well hope you will offer your earliest backers some kind of help to get on the whitelist for the next one.

Imagine if BAYC released MAYC and said "fuck you" to its OGs. Nah.

— Daniel Tenner (swombat.eth) (@swombat) November 27, 2021

6/There's always exceptions to everything, and so here's another one where WL for future projects makes sense: when the team is already successful. If BAYC team launches a new project and one of the benefits is WL on future things... ok then.

— Daniel Tenner (swombat.eth) (@swombat) November 27, 2021

7/As for the WL and collabs with other projects: that's only going to make sense when the project is already successful. It doesn't help the project get there.

So I usually ignore this on a roadmap.

Next.

— Daniel Tenner (swombat.eth) (@swombat) November 27, 2021

🧵/(part of https://t.co/A5k3ybDmVi )

Roadmap Analysis 13: Metaverse integration, VR, etc.

Ok this one is a bit more tangible and I look at it as a hopeful dream, definitely not a red flag, just a bit... far away.

— Daniel Tenner (swombat.eth) (@swombat) November 27, 2021

2/Pretty much everyone in the NFT space has read or watched Ready Player One. It's meant to be a dystopian nightmare rather than a guide for the future, but it's got some uplifting themes and features so, well, it's inspired people in the space.

— Daniel Tenner (swombat.eth) (@swombat) November 27, 2021

3/Here's the thing, though. Even if it is our future (god I hope not - billions starving? no thanks), it's still pretty far away, at least technologically. It's not happening next month. Or next year. Or even the year after.

How do I know?

— Daniel Tenner (swombat.eth) (@swombat) November 27, 2021

4/Well, I don't know for sure, of course, but people have been working on VR and AR for *decades*. It's been "just around the corner" as long as I've had an interest in tech and gaming (makes me feel old to think about it lol).

— Daniel Tenner (swombat.eth) (@swombat) November 27, 2021

5/Second Life was about as good a metaverse as we can deliver now (perhaps we can have slightly better graphics). And it was successful.

Second Life was released in 2003.

That's almost 20 years ago!

And yet you might notice most people don't live in Second Life.

— Daniel Tenner (swombat.eth) (@swombat) November 27, 2021

6/Will Decentraland or NFTWorlds or some Minecraft clone be the one that finally does it right?

Maybe.

But probably not.

Eventually it will happen, but it might take a while. Years. Maybe a decade. Maybe more.

— Daniel Tenner (swombat.eth) (@swombat) November 27, 2021

7/Listing VR and Metaverse integration as a major roadmap item for an NFT project in 2021? Why not list "free nanobot life extensions" in there while you're at it? You know, so you can enjoy your Watery Wombat PFP even longer?

— Daniel Tenner (swombat.eth) (@swombat) November 27, 2021

8/The timelines on which the NFT space tends to operate are measured in hours, days, weeks. In that context, Metaverse/VR is a pipe dream.

I don't see it as a sign of sustainable value in the project.

Next.

— Daniel Tenner (swombat.eth) (@swombat) November 27, 2021

9/PS: the Metaverse, rn?

It's Discord.

Why?

Because it's efficient, cheap and does the job. Despite the lack of fancy 3D graphics and the annoyances, it's good enough. Show me a metaverse that allows me to take in as much information so smoothly.

Discord is the Metaverse.

— Daniel Tenner (swombat.eth) (@swombat) November 27, 2021

🧵/(part of https://t.co/A5k3ybDmVi )

Roadmap Analysis 14: "Setting up a DAO"

Oy vey.

Let's start by saying I love DAOs and I think they're going to replace many if not most of the formal institutions in the world today, once they get better.

— Daniel Tenner (swombat.eth) (@swombat) November 27, 2021

2/But unless DAOs are the main point of the NFT project, "setting up a DAO" on a roadmap is as pointless as listing "setting up a LLC". In fact, no, it's worse. At least setting up an LLC serves a plumbing-level need of the project.

— Daniel Tenner (swombat.eth) (@swombat) November 27, 2021

3/I ran my company @GrantTree for almost 10 years, and we experimented a lot with ways to decentralise power and give people more freedom. We adopted #Holacracy as a governance model. Had total transparency. People could set their own salaries. I really believe in that stuff.

— Daniel Tenner (swombat.eth) (@swombat) November 27, 2021

4/But here's the thing: truly decentralising things while still maintaining focus on the purpose and vision of the project is Really Hard (tm).

So there's two cases that are likely with an NFT project:

— Daniel Tenner (swombat.eth) (@swombat) November 27, 2021

5/Case 1: The DAO is in name only, and is basically a glorified voting system to make ppl feel like they participate.

That's nice, but that doesn't really solve the problem of delivering sustainable long term value. It's a decision-making tool, not a deliverable.

— Daniel Tenner (swombat.eth) (@swombat) November 27, 2021

6/Case 2 (ironically worse): There is a genuine attempt to set up a true DAO and the project ends up hitting all the snags and bugs with DAOs at the moment. The project ends up mired in indecision and grinds to a halt.

— Daniel Tenner (swombat.eth) (@swombat) November 27, 2021

7/Unless it's done by someone with a lot of experience (of which there are precious few atm), "setting up a DAO" is unlikely to succeed.

Even those who are hardcore believers in DAOs now talk of "progressive decentralisation".

iow, you don't decentralise until you're ready.

— Daniel Tenner (swombat.eth) (@swombat) November 27, 2021

8/But even if you did do that and miraculously do it right. What then?

Setting up a DAO is just an organisational structure change. It doesn't actually *do* anything. It's just a way to organise people. You still need them to actually do stuff that creates value.

— Daniel Tenner (swombat.eth) (@swombat) November 27, 2021

9/I respect and admire the idealism of someone who truly wants to give their NFT project back to its investors.

But on a roadmap it's empty calories.

Next.

— Daniel Tenner (swombat.eth) (@swombat) November 27, 2021

🧵/( part of https://t.co/A5k3ybDmVi )

Roadmap Analysis 15: Burning mechanics (fusing, etc)

If you've been keeping up with this thread, by now you should be able to see through this one pretty easily.

— Daniel Tenner (swombat.eth) (@swombat) November 27, 2021

2/Burning NFTs is kind of like permanent staking. Or staking is temporary burning. Whatever. Much like staking, all it achieves is reducing supply and so raising the floor artificially.

There's no actual value delivered by burning NFTs. That should be obvious.

— Daniel Tenner (swombat.eth) (@swombat) November 27, 2021

3/Fusing NFTs is just a more fun, less off-putting way to do the same thing. You still had X NFTs and now you have Y, where Y < X.

So burning and fusing might be fun or whatevs, but they don't add sustainable value to the project.

We're almost done, just a couple more items.

— Daniel Tenner (swombat.eth) (@swombat) November 27, 2021

🧵/(part of https://t.co/A5k3ybDmVi )

Roadmap Analysis 16 (oops I forgot to give a number to the last one!): Liquidity pools

Nothing wrong with liquidity pools. They're a nice tool to make it easier for people to trade in and out of the project.

— Daniel Tenner (swombat.eth) (@swombat) November 27, 2021

2/But they don't add value to the project's owners, they just facilitate trading. So seeing that on a roadmap means that there wasn't anything better to put on there, which is mildly worrying.

Next and final item (for now anyway) coming!

— Daniel Tenner (swombat.eth) (@swombat) November 27, 2021

🧵/(part of https://t.co/A5k3ybDmVi )

Roadmap Analysis 17: "Diamond hands" type rewards

In a way, this meta item could be considered the same as staking, but it can (e.g. by the Lions) be implemented separately from staking, and requires no gas and so is cheaper.

— Daniel Tenner (swombat.eth) (@swombat) November 27, 2021

2/Deciding to implement something like that is not necessarily unreasonable. I do think it smacks of floor focus, and so ultimately I don't think it's a great look, but if done softly enough and not marketed too hard, it's alright I guess.

— Daniel Tenner (swombat.eth) (@swombat) November 27, 2021

3/However, if it is listed as a roadmap item very early in the life of the project, it is worrying. It means that the project is already predicting there will be issues with holding the floor and coming up with artificial ways to strengthen it.

— Daniel Tenner (swombat.eth) (@swombat) November 27, 2021

4/In short, this is not something I want to see on a roadmap. When I do I consider it a possible red flag, showing lack of confidence in the project.

And that'll be it. Let's continue in the main thread.

— Daniel Tenner (swombat.eth) (@swombat) November 27, 2021