Understanding Virality's Role in NFT Communities

Key Insights

• The value of an NFT community can be evaluated by measuring the virality of its narratives.
• An NFTs brand and community are the same, as narratives chosen by the community define the brand — in doing so, the community defines the brand’s value.
• Profiling the current and potential future set of buyers gives an indication of the purchasing power of a collection’s buyer set. How high a collection can go is dependent on the purchasing power of the set.
• Understanding and measuring the “mimetic” power of a collection is key to forecasting how far a narrative can spread.

Over the course of the last two years, NFT investors repeatedly used “the community” as a core factor in their investment theses. Dozens of semi-artistic profile picture collections rocketed to multi-million or even billion dollar valuations on that single phrase.

Investors and collectors alike will need to develop frameworks for evaluating the prospective success of NFT communities if the word “community” continues to act as a default thesis for investors. There are an infinite amount of factors that could go into these frameworks. However, we can narrow down that list to just one key force — virality.