The Dude minted his Proof Collective pass for 1 ETH.

In the last year, the Proof team did some amazing things and some not-so-great things.

There are aspects of Proof to be concerned about but also things to be excited about.

This post is neither designed to blindly cheer for Proof nor bash it.

Let’s call some balls and strikes for stuff that falls within Proof’s locus of control.

What went well

The good! I’ll focus on few things Proof did well: Moonbirds, NFT product launches, building the media brand, IRL events, and hiring.

First off, Moonbirds was a superb launch and well-received.

Immediately breaking records with over $280M in volume in the opening weekend, a wide range of influential folks swooped up “birbs”, and floor prices ended up reaching ~14x mint price at ATH – it’s hard to argue that the launch wasn’t successful. Moonbirds dominated timelines, discussion, and speculation for months. Those of you with your finger on the anger trigger that Moonbirds current floor price is at mint price should realize I’m talking about the launch: well marketed, well received.

Next, the suite of products Proof delivered crushed: three seasons of Grails in addition to Oddities. Imagine choosing this little black and white bubbly fella before artist reveal during Grails I:

…only to find out you minted an early iteration of Larva Lab’s Autoglyph!

Talk about surprise and delight!

Oddities was also (relatively) stealthily dropped, with intrigue behind those spinning cocoons gathering attention throughout the latter half of the spring. Although I am well aware many didn’t like the aesthetic upon reveal (umm were you not familiar with Gremplin’s unique style?), Oddities continued to funnel attention to the ecosystem.

Collectors clearly love to get together and connect on all topics NFTs/crypto.

Proof did a superb job throwing these events, listening to feedback after NFT NYC (Club Proof was thankfully short-lived), and put on discussion-forward events. At this point I’ve been to events in Miami, dinners in LA, and Grails Reveals in LA. Bravo to the team here.

An editorial note for those non-US based or who simply haven’t had a chance to get to an event: I wouldn’t be too peeved that there hasn’t been an event in your city yet or that you’re missing out on some secret alpha that gets passed at these events.

The real magic here is simply connecting with fellow collectors.

Proof’s media brand grew in positive ways that makes Proof competitive in the NFT media landscape. Media NFTs are in their infancy and should be on everyone’s radar - but that’s a post for another time (although the one you’re reading is collectible right now…). Proof clearly evolved beyond just a media NFT (which is what the Collective partially was out of the gates?), but recognize that core asset investment like a podcast studio helps build the brand.

After all, I have yet to meet one Day 0 Proofer who didn’t listen to either Modern Finance, Proof, or both to find Kevin and get into NFTs. It’s good to remember that podcasts probably helped red pill you! Don’t you want the next newbie to learn about NFTs, art, and collecting through Proof instead of the dystopian wasteland of weird YouTube videos complete with thumbnails of some bro, mouth agape, pointing to a Galactic Gopher and the caption, “Are Gophers the next Bored Apes?!”

We could all do with higher quality media in crypto.

Hiring! Before diving into all the good stuff, let’s take a moment to acknowledge one hire that went…sideways? Ryan Carson’s short-lived stay at Proof might be the stain that will take a few more cycles to wash out and, quite frankly, doesn’t reflect well on the choice of a critical hire initially involved with Proof. I’ll generally reserve commentary here, but Ryan has since had some issues and still likes to let folks know about his roughly four month effort at Proof. Take that as you will!

More salient now are impactful acquihires like the Divergence team, a suite of engineers, and clearly impressive folks like NFT Stats to head research. A particular note of appreciation to Eli, who wormed his way into every Proofer’s heart with spectacular work on Grails combined with an abundance of patience and grace, even in testy times. Other rockstars like Stevey, Maggi, and Mau are crowd favorites already. I’ll also point behind the curtain to someone who doesn’t get much public attention, but I believe critical in the ecosystem: Josh Cook.

A lawyer by training and former partner at the esteemed law firm Goodwin, Josh is ostensibly the “adult in the room” to keep the trains running on time. It’s undeniably beneficial for a startup to have leaders looking at the sky paired with operational folks to keep them grounded and ensure that their fancy ideas can face reality. Josh is that guy.

What didn’t go well

Onto every FUD baron’s warm, safe echo chamber of complaints from the peanut gallery!

Hooo boy what a week for the FUD! So much has been said in the last week that I’m sure I’ll bypass your personal pet peeve with Proof, but to summarize I think we can broadly categorize complaints into: communications, overpromising/underdelivering, and a lack of coherent strategy.

When Proof made the very sudden move from individually delegated IP ownership to CC0, many collectors were caught off-guard.

I personally took notice when notable collector Lakoz inked a deal to license his ultra-rare glitch bird before the deal fell through with the move to CC0. Ouch! (I also found it interesting that even in a CC0 world, Lakoz’s endorsement was still worth something)

But the move to CC0 proved a microcosm of a larger problematic trend around communicating with the collector base.

Most recently, Kevin explained to the Collective that passes would be sunset (as technically announced upon launch) in 2025 for, essentially, what amounted to a business model decision. Many members took umbrage because they viewed themselves as founding members who bootstrapped the community into Moonbirds and beyond.

This whole topic is a deep, dark, black hole that already has half of you slamming fists on your desks with bloodshot eyes, screaming “YOU’RE GODDAMN RIGHT I DID!”

I won’t pour more salt into the wound except to say that many folks felt alienated and let down – that much is undeniable.

I’ll add that no team (except maybe Yuga) has walked the tightrope of rewarding early adopters perfectly while expanding the community.

Take the Proof team’s perspective for a moment: if they stay quiet about plans, holders scream and shriek for transparency. If they go full open kimono, there is nothing left to surprise and delight! My sense is that the team is trying to take a hybrid approach now: show building efforts where appropriate, but keep the juiciest efforts in the dark.

Part of the reason I think holders felt disappointed was an impending sense that Proof has overpromised and underdelivered.

Whether it was hints of trait specific rewards for Moonbirds or “waterfall” benefits from the Collective on down, many holders I spoke to reported feelings of generalized weak execution. Instead of surprise and delight, many holders felt strung out and demoralized.

A tangible example would be the promises of Highrise and delivery of…well, nobody quite knows anymore. Future Proof in August hinted at collector pages to display their NFTs in a sleek, organized fashion with Proof’s media integrated organically into the page.

I could see what they were going for: a more beautiful way to showcase your collection, with Proof’s media boosting the experience, and perhaps with a future flair and flash of tokenized-incentivization to interact (e.g., I like your collector page, instead of a “like,” I’ll drop you a $HOOT).

However, most Proof members instead saw a product already in the wild: Deca galleries. Frustration was expressed, concerns were heard. Since then, the team has pivoted to some sort of additional build out of collector profiles as they currently exist on the Proof website with more features, etc.

The last stop on this trail of tears is a lack of coherent strategy. A Collective member on Discord chat asked Kevin and Justin a question along the lines of, “in a simple tag line, what is Proof’s purpose?” Instead of a snappy, almost instinctual answer, Kevin gave a meandering answer about the need for the team to spend time figuring that out.

Yikes.

The gaping hole of a north star may leave a collector feeling like they got into a car with a driver who punched it out of the driveway, gassed it on the freeway, and then after a few hours turned to you and asked, “so where are we going again?”

What to be concerned about

Looking forward, what do we have to be concerned with? Two things in particular!

The first is a sense of haphazard blind shooting instead of laser focus. Returning to the lack of strategy, there is a fear that Proof will experiment and try so many diffuse things that it can’t do one thing really, really well.

For example, Proof of Conference struck me as an odd venture because it would soak up an incredible amount of organizational focus. I mean, to host thousands of people over the course of a few days, wine and dine them, entertain them, issue new NFTs, schedule speakers, rent space, cross-communicate with governmental agencies – holy shit, Batman!

The diffuse efforts remind me of an old boss of mine who would respond to new ideas with: “ok – what are you not going to do in order to do this?”

Don’t mistake this sentiment for the Dude discounting the value of connecting with fellow community members. But in terms of building the next generation of exciting technology, I see so much organizational effort (and capital!) put towards ensuring the right experience that there is no laser focus on what really matters: scalable, revenue-generating, must-have software and crypto products.

Which leads me to my next concern: delivering killer products. What is a killer product?

Something that goes far beyond what people want, but something that they need. Customers may not even know they need it until they use it (circa 2012: “wait, I can use this app to call a car service to where I am right now? And I don’t even hand over any cash?? Why would I ever go back to taxis!”), but after they use it, they simply cannot go back.

This is often also the venture capital analogy between a vitamin and pain killer: a vitamin is a nice-to-have, but you need that pain killer right now.

So what does a “need” product look like that aligns with Proof’s sentiment and is within the realm of reason?

One example is something Kevin floated long ago, but which immediately clicked with me: incentivizing social interaction and nailing the middle of a social-crypto Venn diagram:

Ok in practice this could look like the following: every 24 hours, your Moonbird spits out an L2 NFT “receipt” of sorts which proves that you own the bird.

This “receipt” is kept on a mobile device and, by itself, is essentially worthless (maybe even soulbound to avoid trading/speculation for reasons I’m about to explain). Your mobile device, should you choose to activate it, can then be geofenced along with other mobile devices which have that same receipt – proving you were within the same tight geographical area as another user, say, within the same bar.

Then all collectors who are hanging out with each other get airdropped $HOOT to pay for the bar tab.

Initially not literally able to turn around and pay the bartender in some random coin, but effectively reimbursed. Of course, there are loads of ways this system could be gamed so a lot of disintermediating steps would need to be taken, but it is within reason and viable enough.

Now that is a product people would get excited about.

What to be excited about

Enough doom and gloom. In my humble opinion, there is actually quite a bit to be excited about within Proof.

For starters, the team’s decision to sunset the Collective pass is, quite frankly, a good business decision.

I’ve seen commentary that it could be a loss leader which furthers the brand, but at the end of the day the awkward multi-tier structure of Proof (Collective with 1k, Moonbirds with 10k, Oddities at 10k, Mythics at 20k) makes a Moonbirds-first offering simpler and easier to prioritize for years to come. Kevin clearly became tired of the endless speculation on the pass, and in some ways, I’m looking forward to the pureplay collectors being the only ones who remain.

The decision shows the Kevin can make hard choices.

At the end of the day, startups are like chewing glass – eventually you start to like the taste of your own blood.

Decision-making paralysis is a death knell to startups, so the decisiveness was paradoxically a good thing, speaking in business terms.

Furthermore, let’s not forget that cash is oxygen for startups! Without it, they die!

Founders need to defend the castle first before they go questing, otherwise they are leaving the gate open for the foxes to enter the henhouse. As painful as it may be, prioritizing cash flows (particularly in a post-royalty world, the topic of another post entirely) is simply critical for startup survival.

A note to those who bought at inflated prices: acknowledging this may sound paternalistic, I would highly recommend you very, very seriously consider capital allocation risk in future decision making.

When a collector allocates 0.01 ETH, I think most would agree that you are taking very little risk. When you spend 20, 30, 120 (!) ether on any NFT, you are incurring what for the vast majority of people is a significant amount of risk. As that floor price gets higher and higher, there is a longer and longer way to fall.

Consider a lesson from psychology: loss aversion is a person’s tendency to prefer avoiding losses over acquiring equivalent gains, as first identified by Tversky and Kahneman. What does that mean for you as a floor price is tanking?

I think it becomes much more painful to ride the elevator down than the flip side of joy gained as the numbers go up.

I’m not sure I can emphasize this more. Once you get above mint price, you are engaging in the speculative end of the market!

What happened to “don’t spend money you can’t afford to lose”?

Pair this outsized risk with the fact that money is driven by emotions, not by logic and you are setting the stage for a significant emotional event – up or down! And the cold reality is that if the price is going up on ANY token, I challenge you to be an honest arbiter and say, “you know, the founder(s) could do a better job with x, y, and z.” On the flip side, not every move a founder makes while the airplane is losing altitude is the wrong one.

Rant complete.

Returning to joyful topics, we’ve now seen different NFT brands carve out verticals aligned with specialties. Yuga is pursuing gaming. VeeFriends is pursuing retail. Art Blocks is pursuing art.

What is Proof pursuing?

I’d argue something vaguely along the lines of moonshot ideas within the intersection of art and social, powered by crypto.

There is undeniably “something” within that intersection, but nobody has cracked that code yet. When they do, look out below! If you thought red hearts on Instagram got people going, just wait until they’re getting paid real-time in doggie coins.

I think the team learned their lesson in surprise and delight. After promising so much in specific ways, KRO et al. realized the value in a balance (at a minimum) of transparency with surprise. I think the team has set up exciting, unannounced fireworks and product launches that will leave holders astonished and joyful.

Also, don’t you just sense that Kevin gets it?

The sly comments during 100 Proof episodes about realizing small things like changing backgrounds are fun but don’t really move the needle. Unfortunate security incidents aside, this is the same guy who was buying CryptoPunks under 1 ETH, telling us about Fidenzas, and waxing poetic about Chromie Squiggles early on:

Finally, even if all of the above fails, at the end of the day what Proof gets you is access.

Specifically, access to Kevin and Justin’s network. I know of no other NFT founders with such positive relationships across the broadest swath of artists, creators, and crypto players than Kevin.

From Larva Labs to GaryVee to Tyler Hobbs to Alida Sun to Matt Kane to Dmitri Cherniak to SnowFro to Beeple to Emily Xie to Chris Dixon to William Mapan to Yuga…the list goes on and on. Their touch points to the most successful people in the crypto space is undeniable and generally aligned with where I see the most durable, risk-adjusted plays are. If you buy the thesis that utility NFTs really come down to access, it’s hard to point to someone in the NFT landscape with access rivaling Kevin Rose across the art and social verticals.

That access is worth something to me – quite a bit, actually.

What is it worth to you?

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