About our Collection
Updated: Sep 26, 2021
TheGreatMando and I started collecting NFTs in January 2021 and decided to combine our best acquisitions to form the Canary Collection after 9 months of collecting. This is a brief article to give an insight into our thought process for collecting the NFTs we have, and what we feel will have value in years to come.
We believe we are at the start of a digital renaissance; a paradigm shift in secular trends and the uprising of Web3 which has led to the birth of a new digital culture. The concept of valuation is changing. Old-skool financial valuation models miss two important factors; community and meme. The former can be measured in some aspects, the latter is certainly intangible. The rise of NFTs epitomises these concepts, and presents a real opportunity to "collect" digital culture.
The Canary Collection is a diverse collection of NFTs with certain focuses that we will outline below. You may note that we do not own many CryptoPunks or ArtBlocks. We believe these are the "bluest chip" of NFTs, and our focus has been on finding art or collectibles we viewed as being underpriced. A fully balanced collection may have an allocation to X% Punks, Y% ArtBlocks and Z% everything else; the Canary Collection is the Z%.
So how do you figure out what the Z% should comprise? Here's what we looked at and felt would be drivers of future value.
Community - this is probably one of the most cliché terms in NFTs right now so I'll try not to mention it too much, but it is important. Our favourite metric for this is the number of "unique holders" of a project (relevant mainly for 10k avatar projects). A larger number of unique holders obviously dictates community size, but also is a reflection of propensity to sale. For example, if you own 3 CryptoPunks, you might think to yourself, "I'm happy to hold one that I use as my avatar, but I may look to take profits on the other two at some stage". When you get down to your last Punk, chances are, you're probably too emotionally attached to it to ever sell it, and that becomes your "ride or die" NFT. So we believe the greater the number of unique owners, the smaller the "effective supply" there is at each price point, which can result in aggressive moves higher. Our biggest bet with regard to this metric is the Bored Ape Yacht Club (BAYC), of which we own 70 of 10k NFTs. At time of writing, this project has 5,520 unique holders. We also believe Cool Cats at 4,656 unique holders is following a similar trajectory, of which we own 31.
IP - owning IP rights to your NFT is an industry-disruptive game-changer. The persistent hype, steep value increases and growing communities are clear indicators of current and potential brand value for the best NFT projects. To me, it's kind of like what Apple used to be. I always FOMO'd into buying the new iPod or the new iPhone, almost religiously. Once you have created the hype, the human disease of FOMO will always take over, and it's quite astonishing how some of the best NFT brands achieved that in a short space of time. We will live in a world brands like CryptoPunks or BAYC will be household brands, and it'll be sooner than you think. Now imagine if you can own the IP associated with your NFT...how powerful is that?
Airdrops - we like owning NFTs that have roadmaps comprising airdrops; after all, who doesn't like free stuff? The BAYC airdrop gifted members an additional $30k of value per NFT, which was easily monetisable. Projects with the strongest dev teams tend to bring the highest quality airdrops which have and hold a lot of value to the point where one can recuperate their initial investment. Another good example is the airdrop of $RARE tokens to SuperRare collectors and artists. We like Cool Cats which is set to bring a $MILK token for gamification purposes, as well as a "companion" for each cat. We also like the PixelVault universe, which has already returned 100x from the original PunksComic. The MetaHero complex will grant you additional gamification tokens as well as free mints for its next collectible. As you can see, holders benefit from significant additional value alongside the price appreciation of the original NFT itself.
Liquidity - for the majority of our collection we've focused on projects that offer strong liquidity with daily trading activity. Our largest holdings rank within the top all-time trading volumes on OpenSea, demonstrating consistent activity through cycles.
Cultural and historical significance - away from avatar projects, we believe NFTs of an older vintage with cultural significance have the potential to become some of the most expensive digital assets in the world. When collecting 1/1 art, many phased by the lack of metrics and rarity in order to judge value. We actually view it as a very simple maths problem; there is a fixed and finite supply of NFTs in any given year...NFTs from 2018 are rare, NFTs from 2017 are even rarer. Identifying cultural significance is more of a challenge. We like XCOPY given his unrivalled talent to integrate memetics into his artwork, and own "Rekt Guts" a 1/1 minted in November 2018 (if you've been in crypto long enough, you can probably relate to this art!).
We are in love with the NFT lore created by the first ever SuperRare artist, Robbie Barratt. We intend to write a longer post about the significance of the "Lost Robbies", but the following article is a good description: https://editorial.superrare.com/2020/09/05/the-lost-robbies/
Note that the above two pieces were the 360th and 990th pieces ever to be minted on the SuperRare platform; we believe the low token ID themselves to be a component of future value in years to come. We own one NFT from 2017; a Founder CryptoKitty. These are among some of the first ever ERC-721 tokens, and were arguably one of the first NFTs to hit mainstream news. There are only 100 Founder CryptoKitties, you can read more about their history here.
It is important to note that the aforementioned criteria for assessing NFT value are not limited to the above. There are multiple things to look at, but we do believe these are some of the most important things to consider in understanding what will become more coveted and valuable as the NFT world expands. Finally, as always, none of this constitutes any financial or investment advice; we like the art! View our full collection on OpenSea
Current inventory list: Bored Ape Yacht Club: 70
Cool Cats: 31 Metahero Identities: 28 Mutant Ape Yacht Club: 15
Mutant Ape M1 Serum: 6 PixelVault Founders DAO: 15
Genesis PunksComic: 5 Pegz: 9 Avid Lines: 7 The Currency by Damien Hirst: 3 CryptoPunk: 1 Founder CryptoKitty: 1 XCOPY 1/1, 2018: 1 Fewocious 1/1, 2020: 1 "The Lost Robbie" 1/1, 2018: 1