NFT upgrades on WAX have to change.
This is an opinion piece, and the goal for me is mainly to get this off my chest, but also in a hope to influence the coming releases and prevent this pattern. Currently, we are seeing more and more collections adding some kind of upgrade feature. Usually it is burn x-amount of y-rarity and get a random new minted NFT from the following rarity. E.g. burn 10 common NFTs and get 1 random uncommon NFT. This idea was fun and interesting in the first iteration, but now this only dilutes the supply of the more rare NFTs which results in a drop of value and drop of attraction in the 2nd hand market. It literally removes value from the holders by allowing the collection (author) to mint a higher supply, because the community will reduce that supply.
The higher rarities, usually called “legendary” or “mythical” goes from being a low supply with high attraction to an increased supply with low attraction. Thereby diluting the value of those found in packs or at market, and damaging those that was lucky enough to get the more rare items in packs. This results in a situation where only min #1, and potentially the following 2–4 mints have value, the rest is just scrap NFTs.
One series is doing this the right now — Alienworlds
In Alienworlds, their upgrade system (shining) doesn’t result in the next level of rarity, but instead results in a completely new level. Items that can not be acquired in any other way than through the shining process.
This will dilute the value of the base(stone) cards, but it will keep the value of each rarity because those NFTs are the only way to shine the NFTs.
Let me explain how it works. You have Abundant, Common, Uncommon, Rare, Legendary and Mythical NFTs. In the model I described above, an upgrade would mean you go from Common to Uncommon. But what Alienworlds does differently is that they have a level of each rarity, and all assets from packs are “stone”. If you combine 4 stone NFTs of the same rarity and same NFT you will get a “gold” NFT. Which means combining 4 common (stone) NFTs will give you 1 common (Gold) NFT.
4 Stone > 1 Gold
4 Gold > 1 Stardust
4 Stardust > 1 Antimatter
This means that the only way to upgrade these, is to acquire and reduce the supply of each rarity. This will likely help keeping the attraction of the lower shined items, since they are the only way to go up in rarity.
Dark Country also have an interesting model
In the world of dark country, your upgrades are a bit more risky than what we are used to. They do upgrade from e.g. Rare to Epic, and Epic to Legendary. However… With a risk of actually loosing your NFTs. Yep, the chance of getting an upgraded card is not 100%, but actually less. You can look at the table below.
This is one way to keep the feature of upgrading, but to also prevent the dilution of those higher rarities.
Is it really worth the risk of upgrading your mythicals when the chance of success is so low?
Series and collection has to start caring more about the buyers and less about a quick buck.
There are some releases that really do a great job on this aspect, and more that try and fail on the way. This is all fine, they are doing their best and really trying to add value to the community in innovative ways. One of the fun aspects of innovation is that it doesn’t always reach the intended outcome. Sometimes it takes us into something unexpected and amazing, and other times into darkness 😔. Worth adding is that all innovation builds on previous ideas, implementations and discussions. This is why opensource is so amazing, we can individually work on improvements and as a community the phase of growth will be really rapid. For this to really take off we need to help test, evaluate and give feedback so that all amazing projects can continue to improve and we can reach further into the future.
On WAX, the first real NFT release was 8 months ago, since then, we have had amazing growth in tools, experiences, ideas and implementations. I really believe we have not yet started to see anything. And I do hope that a lot of projects keep adding utility for their NFTs, and take innovations from other parts of the world and implement into the NFT ecosystem.
There are many ideas that can only be implemented using a blockchain, and using NFTs, these are the ideas we need to push and innovate. One of the more basic but such a great implementation is the use of mutable data from Uplift.art and Alienworlds. Where they write new data to the mutable field based on activities.
Gopepe has an interesting model where you can burn NFTs for a share in the revenues from the 2nd hand market trading. This is also a concept worth looking into that I think has a lot of potential. I would rather see a limited NFT that you can get from packs, or that you buy that offers shares in future sales. I am however not sure how this can be solved legally.. because the legal world is really lagging behind the innovation in this space.
Whats your take on this?
Tag me on twitter @anyobservation and we can have a chat.
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