“Your revolution is over, Mr. Lebowski. Condolences. The bums were lost. My advice is to do what your parents did; get a job, sir. The bums will always lose. Do you hear me, Lebowski?”

The Dude wants to get to the fun stuff but must make one final pitstop to review the strategy models.

The Dude leverages strategy models to analyze dynamic projects. Dynamic NFT projects, in the Dude’s humble opinion, are not projects - they are businesses. Those businesses make products and services.

So what makes a dynamic project different from a static project?

Dynamic NFT projects include all projects expected to evolve in any way. For example, one purchases a Bored Ape almost explicitly to participate in a growing ecosystem; emphasis added on “growing.” Collectors are looking for the next “thing” Yuga Labs will produce. By contrast, nobody purchases a Chromie Squiggle and tweets at Snowfro, “wen utility?”

Because dynamic projects are businesses, we need to determine their viability. We do this by asking the four basic questions:

1. Why do people buy from this collection instead of others?
2. What is this collection’s strategy and key questions we must answer?
3. How good are the data?
4. What is the risk versus return on investment of doing this deal?

Questions one and four are open-ended, while questions two and three are structured.

Question two, the collection’s strategy, leads us to nine possible strategies:

• Image Marketing
• Hi-performance Image
• Directed Search
• Geography
• Eliminate the Middleman
• New Technology
• Low Cost Producer
• Commodity Producers
• Be a Crook

Projects generally pursue one dominant strategy, and each individual strategy has a distinctive set of questions that must be answered. As we review projects, we will dive into the specific questions relating to each strategy as the questions are too numerous to list for this short post.

NFT projects largely pursue one of three strategies: image marketing (vast majority), directed search, and geography. Image marketing is dominant because NFTs generally exist visually, leading to a premium for that particular strategy.

Consider other major industries which rely on image marketing: consumer packaged goods (the shape of a Coca-Cola bottle is extremely important to the company) and electric vehicles (driving a Tesla says I give a shit about the environment AND I have resources) to name a few.

Image marketing may be an inherently weak strategy, but it is most closely aligned with the idea of narrative story that exists in a visual medium.

Question three, relating to data, has four distinct questions:

1. Are the data interesting?
2. Are the data sourced?
3. Are the data accurate?
4. Are the data powerful?

Notice that in asking the four basic questions, we successfully stripped away the common pitfalls of NFT collecting, including but not limited to:

• I like the art
• This team will execute so well
• Unparalleled utility

Many will fail to structurally assess projects in their appropriate categories, which will lead to both over and underpricing in the market.

Correct segmentation of projects and the ability to ask the right questions will lead to disproportionate outcomes when collecting NFTs.

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Footnote: The Dude learned these strategy models from a notable professor, who unfortunately cannot be named so as to avoid doxxing the Dude. However, the Dude ascribes all credit to this professor in developing these models and is simply a humble student applying these models to a nascent industry.