Excessive Behavior - The Daily Gwei #447
Excessive Behavior - The Daily Gwei #447
The excess greed of this industry never ceases to amaze me.
For those of you who were around in 2017/2018 you will remember the sheer madness that surrounded the ICO mania during that time. Towards the second half of 2017 and well into 2018 we had multiple ICOs happening every single day with the most popular ones raising 100’s of millions (and sometimes billions) of dollars. Though sadly most of this money was completely wasted and a lot of it just ended up leaving the ecosystem altogether.
Over the last few months I’ve seen the same thing that happened with ICOs happen in the NFT ecosystem. I mean, just recently there was a $70+ million NFT mint for something called ‘Pixelmon’ and the actual NFTs ended up being extremely poorly designed and looked nothing like what was advertised. Of course, the only people who made it out of this whole thing in the money were the creators - the people who minted Pixelmon “floor” NFTs for 3 ETH each are now only able to resell them on the open market for 0.36 ETH - an 88% loss in just a couple of weeks.
What really sucks about “raises” like these is that so much of this money is now going to flow out of the ecosystem with little to none of it actually being reinvested to help grow this industry. We saw this play out countless times during ICO mania with the most egregious example being EOS that brought in millions of ETH during a year-long ICO. What happened to all of that ETH? Well it was sold on the open market for BTC by the company that created EOS (Block.one) and now Block.one has a massive 164,000 BTC ($6.2 billion) treasury . Oh and of course EOS completely failed in everything that it tried to do and the EOS token is down 90.7% from its all time high (that was set all the way back in April of 2018).
Obviously we’d all much rather enormous amounts of money like this go towards funding things like public goods on Ethereum which provide much more value than random NFT mints or ICOs. For example, without the hard, tireless and thankless work from the Ethereum core developers over the years, doing raises like this wouldn’t even be feasible on the network. And what do the core devs see from these raises? Absolutely nothing good - just people yelling at them about gas prices being too high. Unfortuntaely the ‘tragedy of the commons’ is very real in crypto and if this industry is to survive long-term we need to work hard to stamp out as much of this behavior as we can.
I remain optimistic about the future and funding of public goods is generally much better these days than it was just a couple of years ago. I’m just so tired of these mega-raises that never lead to anything good - even if the project is legit and the team has good intentions. There is such a thing as raising too much money and then not really having the motivation to build a good product/service (nor feeling the pressure too) - it’s a major why a lot of the projects that did mega-raises have failed to produce anything of real value for years now.
Have a great day everyone,
Anthony Sassano
Enjoyed today’s piece? I send out a fresh one every week day - be sure to subscribe to receive it in your inbox!
Join the Daily Gwei Ecosystem
All information presented above is for educational purposes only and should not be taken as investment advice.