The announcement of DeGods' Season 3 has sparked both excitement and scepticism, offering a glimpse into the evolving landscape of NFTs. 

But there’s never a dull moment with NFTs – some collections would make an overnight millionaire, and others could leave you broke. 

But here’s the question – how do you separate the scams from the real deal?

Today, we spotlight the DeGods project to highlight some lessons on how to avoid scammy NFT projects.

TLDR 📃 

• DeGods Season 3 unveils 20k new art pieces, integrating with the existing collection.
• Points Parlour game debuts, sparking mixed market reactions and scepticism.
• Lessons: NFT hype cycle, Ponzi patterns, community alignment, liquidity challenges.
• Strategies: Speculation, shorting, provenance, visionary founders for NFT success.

Disclaimer: Not financial or investment advice. Any capital-related decisions you make are your full responsibility.

Starting with a fresh artistic influx 🖼

The curtain rises with DeGods unveiling a sneak peek at an impressive assortment of 20,000 new art pieces destined for their collection. 

In a strategic move to preserve the cohesion of their community, these additions are not presented as standalone NFT drops. Instead, they’ll add these new drops to the existing DeGod. Each DeGod now embodies four distinct pieces of generative art. Female DeGods are also included to diversify the collection's appeal and reach.

Introducing a gimmicky Points Parlour 🏚

A pivotal moment arrives as the spotlight shifts to the introduction of the Points Parlour. The Points Parlour is a simple game designed to reward DeGods and can be played on your phone or computer. 

DeGods announces an initial upgrade cost of 333 $DUST (DeGods cryptocurrency), a figure slated to decrease over time gradually. The $DUST collected will go towards the Points Parlour prize pool, with Season 3 DeGods able to use points to play & win prizes.

More information on the platform is due later today.

Community members are close to a revolt 🤼‍♂️

The initial market reception to the new DeGods art was negative. The DeGods team had hyped Season 3 as a game-changer for the last six months. And now that the art is here, some holders have questioned the perceived mediocrity of the new art and expressed reservations about the new female DeGods 

A number also lamented that they must spend money on the upgrade and see the Points Parlour as a cleverly-designed raffle program. 

However, it is fair to point out that long-standing holders of DeGods got significant sums of $DUST as Airdrops, and we are still awaiting greater detail on the Points Parlour. 

Nonetheless, scepticism is the order of the day as the floor price experienced a notable dip by 2 ETH (8.5ETH to 6.5ETH) post-announcement. Also, some big holders are offloading both DeGods and $DUST. For instance, one of the largest holders dumped 100 DeGods and 200 ETH worth of $DUST to the community’s chagrin.

The team is living on borrowed time ⏳

Frank and the team have been known to respond quickly to fix problems and are open to pivoting when required. Previous actions have shown that positive community sentiment is one of their top objectives. This stance is exemplified by a response video from Jonny Stanback, Co-Founder and Artist for DeGods and y00ts,

Video 1

We have been told to expect an update, with some members of the DeGods community speculating the initial Season 3 announcement was a cleverly designed marketing stunt before the “proper” release on Sunday. Time will tell.

Key learnings from DeGods' narrative

The DeGods saga unearths several crucial takeaways that can guide your NFT investments.

• Navigating the hype cycle: The age-old adage "Buy the rumour, sell the news" reverberates strongly within the NFT space. As projects gear up for major releases, speculation and anticipation propel the market. However, the risk lies in overpromising and underdelivering, a recurrent pitfall.
• Beneath the Ponzi veil: Ponzinomics loom as a pervasive challenge within the NFT market, stoking mainstream criticism. When stripped down, the Season 3 DeGods strategy exposes a pattern familiar to many NFT projects. It mostly involves introducing new NFTs with an associated cryptocurrency to unlock rewards.
  However, the pressing question remains – where are the products created to solve tangible real-world problems, or is the branding/IP designed to appeal to mainstream audiences? As it stands, it is tough to see how any new external value has been created.
• The balancing act: Managing community expectations and market dynamics is a tightrope walk. Expectations and the market are constantly in flux, with a vocal minority often setting the agenda. Most holders also have a very short time horizon, which makes incentive alignment particularly challenging. 
• The liquidity quandary: The NFT market grapples with a liquidity crisis. More fresh liquidity and market participants are needed to ensure sustainable floor price growth post-release. This liquidity challenge was initially seen through the major impact Azuki Elementals had on the negative price performance of fellow blue chips. Without a new influx of liquidity and market participants, it is exceedingly difficult for any project to experience a long-term sustainable increase in floor price, especially post-delivery.

Using the cons of NFTs to your advantage 💪

As NFT projects straddle the grey line between being upstanding and Ponzi-like activities, there are four strategies to help you thrive in the ever-evolving NFT landscape:

1. Buy the rumour, sell the news

The market runs on speculation, and following this basic rule will ensure you make money in the short to medium term. Look for new projects minting with demand or existing projects where this is the anticipation of a future event. 

2. Short the market when optimism is high

The general market sentiment is negative, and many traders have profited handsomely from shorts using the likes of NFTFi. Following the earlier advice, the best time to short is when a product is released/announced.

3. Popular artists are a pragmatic choice

For long-term value investing, look for Digital Art from popular artists (including generative art) and NFTs that are either valuable due to their history/provenance or popular with no interest in building utility/products. These two types of NFT have been remarkably robust in this current market downturn and should rebound first in a bear market. They include the likes of Cryptopunks, Squiggles, Fidenzas, XCOPY artworks, Autoglyphs and Milady.

4. Bet on visionary founders

Another strategy is to do a deep dive into a Founder’s background, experience and prior success if you wish to invest in utility focussed NFTs. Luca Netz, for example (Owner of Pudgy Penguins), had been extremely successful within traditional e-commerce before transitioning to NFTs. 

He also purchased Pudgy Penguins for $2.5M of his personal funds, and to date, he is yet to extract value from the community. The Pudgy Penguin Toy Line and social media have been going from strength to strength.

Cryptonary’s take 🧠

DeGods story isn’t over, and we will be waiting with bated breath to see what future Season 3 announcements bring. The team has a history of overcoming significant challenges and downturns and should not be written off. Some intrepid investors are accumulating at the moment, expecting a bounce back. 

The point remains Season 3 exemplifies several issues within the nascent NFT market. Without a clear long-term plan, experience and ability to execute many PFP projects will fall by the wayside during this bear market. Hype and ponzi-like schemes do not make for long-term sustainability. 

As always, thanks for reading. 🙏

Cryptonary, out!