NFTs (Non-fungible tokens) are the next wave of value creation using blockchain technology. This short article is an analysis of the CyberKongz NFT collection and how NFTs can create and store value for their holders.
CyberKongz is a collection of unique and randomly generated NFTs such as the one in the picture. These can act as profile pictures for social media, or as avatars for online interaction in metaverse communities. They also act as your key to the CyberKongz NFT community on discord.
These genesis CyberKongz currently sell for at least 130 ETH as of 10/25/21, approximately $533,000. How can a picture of a gorilla with a banana peel on its head and rainbow sunglasses sell for as much as a nice house? Where in the pixels is the value located?
Asset Analysis: Holding a genesis Cyber Kong
Access to private CyberKongz community with many high profile NFT and cryptocurrency investors
Social clout - being a Cyber Kong holder
Earn 10 $BANANA tokens per day; 1 BANANA = $80
Use $BANANA to breed your Cyber
Kongz and create baby Kongz, which sell for 3.5 ETH (approx. $14,000)
In sum, holding a Cyber Kong earns its owner over $300k per year, more than most high paying jobs that require hours and hours of work each week on top of years of schooling. This makes CyberKongz one of the most valuable asset collectio
ns on the planet.
How is it possible for a JPEG to earn you over $300k per year? The answer lies in online markets produced by decentralized blockchain technology that allow for pure supply/demand to determine value.
CyberKongz was the very first NFT project to launch their own token as a passive yield incentive for buyers to hold their NFTs. The $BANANA token started off at a reasonable price, around $1-2.
From there, the team added utility for the token and breeding for the CyberKongz. In order to breed, you needed to pay a certain amount of $BANA
NA as well as hold two Cyber Kong NFTs. The utility of the token caused a spike in demand as Cyber Kong holders wanted to breed to make baby Kong NFTs. Supply/demand economics dictates that the value of an asset is directly tied to the demand for the asset. Thus, the price of the $BANANA token started rising.
Cyber Kong holders began to realize that they were earning $100-$200 per day from their NFTs, and that the number was going up every week as the token price went up. This caused holders to not want to sell their CyberKongz, and the utility of the $BANANA token prevented anyone from immediately dumping their tokens as soon as they collected their yield.
With nobody selling, the floor price of CyberKongz went parabolic as reports of the passive yield earnings circulated amongst NFT enthusiasts. This is how NFT collections create value; through community and utility.