Liam Herbst, NFT Analyst, on the Current NFT Market and the Future of NFTs | Ep. 250

In an exclusive interview with cryptonews.com, Liam Herbst, NFT Analyst, talks about why the term “NFT” must die before there’s another NFT bull run, the long term bull case for NFTs, and why ETH will outperform virtually every NFT.

About Liam Herbst

Liam is leading the go-to-market strategy for a new NFT company which is currently in stealth mode. He previously worked with BasedAF, Blur, and DeSo, and his NFT trading journey began in January 2021 with NBA Top Shot.

Before getting into NFTs, Liam worked at a startup accelerator called On Deck. He graduated from the Ivey School of Business at Western University and played four years of professional junior hockey.

You can follow him on Twitter (@liamherbst_), where he posts informational threads on the NFT market.

Liam Herbst gave a wide-ranging exclusive interview which you can see below, and we are happy for you to use it for publication, provided there is a credit to www.cryptonews.com. 

Highlights Of The Interview

• Why (the term) “NFT” must die before there’s another NFT bull run
• The long-term bull case for NFTs
• The most important metric in NFTs (Blur lending outstanding volume)
• How new NFT trading instruments like futures will make the market better/more efficient
• Why ETH will outperform virtually every NFT

 

 

 

Full Transcript Of The Interview

Matt Zahab 
Ladies and gentlemen, welcome back to the Cryptonews Podcast. We are buzzing as always and I’m super pumped to have today’s guest back on the show. Liam Herbst coming in hot for round two after he crushed the first episode everything NFT related. Liam is leading the go to market strategy for a new NFT company which is currently in stealth mode. By the time round three comes on, which will probably be in a couple of months, that will be locked and loaded and we can finally disclose the name, but until then, it’s still stealth mode. He previously worked with BasedAF, Blur and DeSo, and his NFT trading journey began in Jan of 2021 with the one and only NBA TOPSHOT. Before getting into NFTs, Liam worked at a startup accelerator called On Deck, and he graduated from the Ivey School of Business at Western University, which is an absolute treat of a time, and also played four years of professional junior hockey. He’s also one of my favorite Twitter followers. Anything NFT related, he’s your go to guy. Do check him out. That’s @liamherbst_ on Twitter. Liam, my friend super pumped to have you back on, dude. How you doing? 

Liam Herbst 
Excited to be on man. Thank you for having me. All is good on my end. 

Matt Zahab 
Love to hear that. We had a blast on round uno and pumped to have you for round two. A little bit of a different background this time, though, I believe you are up north. Whereabouts are you? 

Liam Herbst 
Yeah, I’m in Tiny Ontario, actually, so cottage country, just north of the city in Toronto for the weekend. 

Matt Zahab 
So nice. For the listeners who aren’t familiar with northern parts of the greater Toronto area more specifically, Muskoka. It’s like our version of the Hamptons for New York. If you’re fortunate enough and have enough cake, you get out and you rip up north, take the two three hour drive, spend the summer there. How much of a treat is it being up north in the summer? 

Liam Herbst 
Yeah, it’s the best. It’s one of my favorite things, man. So really  happy to be here this weekend. 

Matt Zahab 
Relaxing, peaceful, tranquility. The only thing is, WiFi is a bit of a battle, but looks like we have that on lock. We love to hear that. Let’s get into NFTs for a sec. So you’re one of my NFT guys. I have a couple of guys for most areas of crypto, whether it’s your shitcoins, which again, haven’t invested in forever, your traditional blue chip coins, got a couple of guys who are always on lock with that. NFT, DeFi, some ZK Tech, you name it, you’re one of my guys for NFT, you are always on the pulse. You spend way too much time on Twitter and you’re way too good at Twitter. Always lurking around, always with the updates. Give us the TLDR. What is going on in the current NFT market in mid July 2023? 

Liam Herbst 
The NFT market is, in my opinion, a bit of a transition period where we went from 14 16 months ago. The PFP driven hype mania NFT scene was like, completely popping off. Everyone was stoked about other side. Azuki was going crazy, Doodles and Moonbirds and everything was up and up. And we’ve gone through this period, I mean, it’s pretty clear now over the last 14 15 months, where everything’s kind of been down. Only the running joke inside NFT community.  Like, when crypto goes down, NFTs go down, and when crypto goes up, NFTs go down. So that’s been the place and on one hand, it’s kind of tough to see so many people leaving that space that existed in NFTs, and so many people obviously losing a ton of money by holding and trading at the same time there are a lot of really interesting things happening on the edges of bringing new groups of people into NFTs that aren’t there for that speculative, hype nature, but use it as a way to improve experiences that they already have. So I’m excited with some of the things that are happening around, like Nike, with dotSWOOSH launching digital collectibles that are be interoperable across different games and ecosystems. Fortnite, maybe like Snapchat, know Apparel and that kind of stuff. Then you have, like, Dr. DisRespect, who’s launching his own game and having NFTs as a way to play it as an early user, and then also going to have an NFT reward layer for that. Then you have things like reddit avatars that have come out that are native to a specific social media platform that eventually can get different perks and such for being a user on that platform. So we’re going through this period of transition where the main value proposition was really like speculation and dollar go up to now, having actual products that people want to play and trade and interact with and frankly more so, just use. So I’m excited about it and I’m optimistic on where the future is going, but at the same time, obviously it’s a tough period and I think we’re still a while away from really seeing NFT start to explode. 

Matt Zahab 
Yeah, that was well said. It’s pretty crazy looking at the charts and seeing how down and to the right it is, like, across every single metric possible. And we are going to get into metrics in a bit, but I want to go back to dotSWOOSH for a while, because this is an NFT project that I think is extremely important in regards to mass adoption, in regards to utility. And of course, when you have a brand like Nike, I mean, it’s one of of the most recognizable brands on the planet. I recall there was a study, I think McDonald’s was number one with that crazy M. Of course it’s cliche. It’s in like, every freaking country in the world. Tastes the same everywhere when you’re buckled. I mean, a nice little McDonald’s rip is always a treat. Definitely not the most healthy for you. But nonetheless, talking about dotSWOOSH for virtual apparel, why are you so bullish on this? And I’d love if you could speak about execution that they’ve done and the plans that they have moving forward on this as well. 

Liam Herbst 
Yeah, the thing that I’m most excited about is just the fact that it’s meant to appeal to normal people. It’s not meant to be like, okay, we need to capture the 10,000 Board Ape holders and CryptoPunk holders and try to get them converted to our stuff. It’s taking an avenue where it appeals to normal people and appeals to frankly like activities that they already partake in. People spend a shit ton of money, or a lot of money I should say, on Fortnite Skins, a lot of money on dressing up their Snapchat avatars. And I think that as we move to a world that is more digitally native and people continue to spend more time and want to own a part of these interactions that they have online, I think that what dotSWOOSH is doing will kind of become the norm. If you want to stay anonymous online, but you still want know have a video call and be able to interact and have your voice over and face over, etcetera, you’ll probably dress yourself up in maybe it’s a Nike shirt, backwards hat, your kicks, your Gucci belt, whatever it is. And all of that will presumably be an NFT. And then the other side of it is also what Nike and Artifacts are doing I think is really interesting and I expect to see more of with Nike is actually like chipping physical products with NFTs as a proof of authenticity, verify it’s real and create a better layer for that collector side and that trading and speculation side. On top of those assets today we’ve seen a little bit of that like StockX creating NFTs of different products, but you don’t really know. They didn’t manufacture them, they’re authenticating them, but they may not actually be real. We’re seeing a little bit of this also with Arcade, the lending platform, taking in Rolexes, allowing people to offer loans against the Rolexes by creating NFTs that you can lend against and leverage that side of things. So I think that side of things is also going to become much more popular in the next couple of years. Very excited for that. 

Matt Zahab 
So the Rolex thing is another really interesting part as well. So just walk me through the process there, someone let’s say I have a Rolex, I go on the platform and I can lend my Rolex. Is this IRL or am I lending the value like a fractionalized value of that Rolex to someone who buys the NFT. How does that whole thing work? 

Liam Herbst 
So from my understanding, I don’t know, 100%. This is completely accurate, but from my understanding, how it works is that, let’s say, Matt, you have a Rolex, you ship it to basically somebody who custodies it, verifies its authenticity, and creates an NFT that signifies that Rolex, adds it to in this case, it was like Arcade XYZ, which is an NFT lending protocol. And then lenders, you could put up a request to borrow, let’s say you want to borrow like 5 ETH against your Rolex and you want it for six months. You’re willing to pay like 15% interest on that. And then lenders can then either agree to match that loan, etcetera. So there have been a few instances of this, and I think we’ll see much more. But the thing for me is, I don’t love the idea of having a third party company verify an asset, authenticate an asset that they didn’t create, because it just opens the door for situations like the Logan Paul Pokemon Card, rug pull, you know what I mean?  I think initiating them from the start out of the factory, having them chipped and have that actual chip represent the item in a sense to me is where I see the future going and would give me much more confidence as an investor, as a lender to engage in one of those type of agreements.

Matt Zahab 
I mean I can get spooky pretty quick When I was in Dubai, it was this guy, he was like showing us the differences between the fake ones and the real ones. I literally and again, I’m not a watch guy, so take this with a grain of salt. But I couldn’t tell, I literally couldn’t tell the real one from the fake one. And again, obviously there’s pros who do this for a living, but just from even the feel like the weight was almost identical to, I feel like it’s pretty darn easy to just change a couple of numbers and go from there. And so many people don’t have the box and the authenticity certificate from the Rolex because they often get bought from end users so many times it’s just a shit show. I think I’m the same with you. I wouldn’t say I’m bullish on that one bit. 

Liam Herbst 
Yeah, I think it needs to be something that forces you to alter the item in a way. Like if it comes in a box or comes in a receipt, you can just get rid of it. But if forcibly have to alter the item in order to remove the authentication chip in it, then you can easily see that somebody removed it or didn’t remove it. It becomes at least harder, in my opinion. It’s still not a perfect solution, and I still think there will be instances where people begin hack this in some way or steal it in some way, but I see it as a much better future. And it’s funny, like you mentioned that I went to Beijing several years ago, and they had a six story mall, basically all countertops knockoff shops, anything you can imagine. Six stories, every single luxury handbag you can imagine at 5% of the price. And shirts, hats, socks, belts, shoes. If you can think of it, it was there and it was pretty crazy to see that. And I don’t know, as a brand, there’s an argument to be made of, do they really want to the counterpoint in this is do brands really want to stop this counterfeit culture? Will they make if you have people buying these items and showing them off all around the street, free advertising for them. So who knows? I’ve heard that there’s a side of it where maybe even the brands don’t want to stop it. But yeah, I’m not sure. I think when we get into the world where everyone has some AR glasses or AR contact lens, 10, 20, 30 years from now, whatever it is, maybe it’s sooner. And you can see in your filter, in that overlay to be like, okay, those are legit Nikes. Okay, that’s a legit Rolex. That sounds like a pretty interesting world to me and I think that NFTs will help enable that. 

Matt Zahab 
Yeah, very well said there. The term NFT is another thing that I see you tweeting about all the time. And again I’m in the same yacht as you. I think it’s got to die for a couple of reasons. Just the term. There’s so much FUD towards it because people made seven figures, eight figures and the odd sick puppy making nine figures doing trading NFTs like a Degen when again most of these NFTs have zero utility. Heck, I have one on my wall right beside me The cool cat that was worth one 100K and now it’s worth nothing. You win some, you lose a lot. Story for another day. But on NFTs the term needs to change before there’s another bull run. You and I are in the same yacht here. It’s a big anti signal to the market because people have lost so much money. What are the front runners? Digital Collectibles seems a little too meh and way too nuanced and conspicuous. Do we have any good terms or can we market it, label it advertise NFTs in a particular way to get the masses involved? What can we do? 

Liam Herbst 
There my take on this actually is it’s almost like the abstraction of the term instead of the replacement of the term. So we look at like MP3 as a term. MP3 is the file format in the same way that NFTs are just a way to store an asset in a database. It’s pretty much I don’t know if it’s the accurate representations to call it a file format, but it is like a format to store an item. So there are a lot of similarities there. And what happened to MP3 is like when MP3 music first came out when we were younger and you had your MP3 player and you could download music on it and the fact that it was like an MP3 was cool. And then Apple came on and Apple didn’t use the term MP3. They did talk about again, obviously they didn’t talk about the file format. They just talked about the benefits to the consumer and why it was superior than what previously existed. And there’s still like MP3 songs, still the same format. But the focus was on why it was a better product for the end users. Why they could have 1000 songs in their pocket. And that to me, is the future that NFTs need to take in order to reach mass adoption. Same thing when Apple sells computers today, they don’t first present the specifics on how many gigabytes of Ram or the CPU that’s further down to tell the story. It’s usually like faster, lighter.  You can make these really cool videos, like the screen is brighter and see things better. It’s not as focused on the specification. And what happened with NFTs is like we took a spec and we took this term and everything became valuable just because it was an NFT. The amount of absolutely useless dog crap that became worth thousands or tens of thousands of dollars just because there was the term NFT associated with it was absurd. And now what has happened is the speculative premium of something being an NFT has completely disappeared, or it is completely disappearing. I still think there’s room to go. And what will happen is when something doesn’t become valuable anymore just because it’s an NFT, when we stop thinking, oh, I want to own this NFT because an NFT in itself has no value. The only value is the story people tell about it and the value that it can bring the end user. We’ll need to get to that place where we focus on the benefits to the end consumer, and that’s what makes it valuable. And NFTs help improve those benefits to the end consumer. And dotSWOOSH is a great example. dotSWOOSH doesn’t list NFT at all anywhere in their marketplace. A lot of the gaming companies that are exploring Web3, they don’t say NFTs. Digital gamers hate it, whatever. They say something else. Right? And that’s where I see us going. And I could see them talking about how, oh, you own it, you have full custody over it. It’s easier to trade it, interact to create things on top of it, showcase it. Whatever benefits is that the asset has. And how it’s better as an NFT. I think that is what’s going to get shown and displayed instead of just saying, come buy our NFTs because that sales pitch is not nearly as effective anymore. 

Matt Zahab 
So true. One of the earliest points I learned in marketing was you always want to market advertise and showcase the benefits and not the features. Right? I’ll use my example at Hush for a while. All of our marketing at Hush, all of our sales feels everything. It wasn’t 500 thread count, 25 pound weighted blanket. It’s going to put you asleep quicker, make you stay asleep longer, and feel more refreshed the next day. No one gives a shite about the thread count and it’s like people just want the comfiest bed/sleeping set up possible. They want to go to bed quickly, they want to stay in bed all friggin night, not wake up and they want to feel good the next morning. You know what I mean? Like, talk about the benefits, not the features. That’s all it is. When you buy a pair of Nike shoes, why do you buy a pair? It’s not because of the shock foam or the whatever. It’s like it’s because it’s like Nike, what’s the benefit of wearing Nike? It’s a brand that you know of, that you’re comfortable with, and other people will check it out when you’re walking or running. So it’s the little things like that that really move the needle. How can we do better as a community at hammering home the benefits and not the features? Because just like you said, it seems like every project, it’s talking about the features of it and not the benefits. Like, oh, 10K Metadata here gives you access to this. How can we change that? So it’s now going towards benefits and not features? 

Liam Herbst 
Yeah, I would say it’s just creating products that people actually want. Not everything needs to be in NFTs. There are some things that can be improved by the fact that they are NFTs and it’s again, just building digital products that people want. So I’d say one example could be if you’re using an online gambling website and you want to bet on March Madness and you pick your bracket and you put $20 as a bet into your bracket. And the current point systems that you have is like, okay, one person can win, like, a million dollars if they guess the bracket. That’s basically like, impossible lottery. Yeah, but if you wanted to and you could create an NFT of your bracket, and you could stat rank them by the number of wins or number of points, whatever it is, by people, and have some 80% of the winnings go back to the 1000 people and proportionate to where they fit you, put $20 in. But let’s say you don’t necessarily want to go for that 100K top prize that you’re happy taking a 3X return on your bracket and you want to make a bunch of different brackets. If they’re an NFT, there could be a marketplace for them, and you could see rank them easily by the number of wins they have, by updating the Metadata for that NFT and then buy install them on a marketplace. To me, I see that as, like, a superior experience on what exists currently for March Madness brackets. And those are the kind of creative things that should happen. Another thing is, if I want to buy $5 or $10 outfit for my Snapchat, whatever it’s called, I’m super into that space. But anyways, I want to buy, like, spend $5 $10 in a Snapchat outfit. Okay, I can do that, but it’s isolated to Snapchat. If I buy a certain pair of digital Nike shoes you want to bring, maybe I want it on my Snapchat guy, but I also want it on my Fortnite guy, and maybe even the character itself. I want to be able to represent it in both Snapchat and in Fortnite. That’s an example of interoperability, like updatable assets, interoperability, easily transferable. There are lots of things that can be improved through those underlying features and benefits in specific cases. Now, it’s a creative problem, and it’s a creative problem of which brands are willing to and which founders are willing to take that next step to make things better. That’s what I’m looking forward to, and that’s how I think we make this transition away from NFTs, which could become a bad term to just flourishing digital asset ecosystem. 

Matt Zahab 
100%. Liam we got to take a quick break and give a huge shout out to our sponsor of the show, PrimeXBT. And when we get back, we’re going to talk about the most important metrics in NFTs and new NFT trading instruments and how it will make the market better and more efficient. Time for PrimeXBT, our huge and amazing friends at PrimeXBT who offer a robust trading system for both beginners and professional traders. It doesn’t matter if you’re a rookie or a vet, you can easily design and customize your layouts and widgets to best fit your trading style. PrimeXBT is also running an exclusive promotion for listeners of the Cryptonews Podcast. After making your first deposit, 50% of that first deposit will be credited to your account as a bonus that can be used as additional collateral to open positions. The promo code is CRYPTONEWS50 all one word. That is CRYPTONEWS50  to take advantage of this offer and receive 50% of your deposit credited to your trading account. Again, that is CRYPTONEWS50  all one word to receive 50% of your deposit credited to your trading account. And I’ll back to the show with Liam. Liam, let’s jump into the most important metrics and metric in NFTs and present day this appears to be Blur lending outstanding volume. I understand this a little bit. You understand this a whole lot. I’m throwing the ball over to your court. Tell us why Blur lending outstanding volume is one of the most important metrics in NFT land present day. 

Liam Herbst 
So to step back a little bit on what’s broadly happening with the NFT market is we chatted about this a little bit on the last podcast. But when Blur introduced the incentive to trade NFTs to earn basically this currency Blur, which is quite valuable, what happened was a group of traders, specifically a group of those Blur token farmers were willing to accept NFT losses in order to earn Blur dollars. So we’ve had the same 10% to 20% of NFTs within a collection. It’s the same like 1000, 2000 NFTs within a collection that are just getting flipped. It’s between these farmers all the way down. What happens when you introduce lending, and that’s what determines the floor price by the way, those bottom like 10% 20% because they keep on pushing things down, it brings down the value of the other 80% of NFTs that are being touched just because that’s the way the market works. The goat dominates its value based on the floor. When you introduce lending to that cycle, what happens is that farmers can now lever up these NFTs in order to get more of them, place bigger bets, use more size to earn more points, and they can also use it to protect their downside if they get stuck with an NFT. So if I’m a farmer that has 100 ETH worth of NFTs, I could now take out 50 ETH worth or 60 ETH worth in loans against them and have 100. And let’s say I have 100 ETH NFTs and 100 ETH liquid. I could take out 50, 60 ETH. So then I have 150 ETH liquid so I can earn more points with that. I earn points through bidding, listing and offering these loans. And then the other side of it is, let’s say I place 150 ETH of bids, and then Machi Big Brother comes and dumps five Board Apes onto me. I then have 250 ETH in these NFTs and nothing liquid. So I would want to take out more loans in order to get more liquidity back. You create this system where the amount of leverage in the ecosystem actually has a drastic impact on floor prices. And everybody is incentivized to take out these really, like as high risk, short term, they’re perpetual but high risk loans as possible because they just want to protect their downside. And so, anyways, we saw a few weeks ago what happened with Azuki where they were leading up into this really hyped mint event, and a lot of collectors, as well as a lot of farmers, were taking out a ton of leverage on Azukis, which was helping propel the floor price up and up. But it got to a point where if Azuki dropped, like, 15%, there was a huge amount of loans that were right below there. He’ll begin entering liquidation, and then a substantial amount all the way down to the bottom. And so everybody, once it dropped a little bit and the loans started hitting and more supply kept on getting thrown into the market, and the farmers are becoming more cautious. They’re like, okay, I don’t want to lend my money out. I want to retract it back. So that bubble that was inflated, that was driven by leverage, completely unwound. And given that that leverage was across all these different assets, all of these different NFT collections, because you can offer bids and offer loans like cross margin, in a sense, across many different collections. So when Azuki crumbled, everything else did, but you can see a pretty direct correlation with basically the amount of money that people are willing to lend to perpetuate this cycle and the price of NFTs. So NFTs crashed quite a bit, but then they started to rebound a little bit, leverage started to go up, and I’m just like I think the same thing is probably going to happen again at some point before this whole charade is over. 

Matt Zahab 
How bad was that Azuki NFT drop? That was a top 20 blue chip project, and they colossally screwed the dog on that one. What was the team thinking there? 

Liam Herbst 
It’s tough. I mean, a lot of the value propositions of projects are pretty flimsy. Azuki’s value proposition. And the reason why they were able to support such a high floor price is because they had great execution. People are like, great execution, and a group of really hardcore whales supported them. And when you have high net worth people who support the project, since so little is actually transacted and the market caps on, these are relatively small, if there’s a FUD event, the whales can just swoop in, buy 20 of these NFTs, and then the panic sellers who were driving the floor down can know they’re off the books, that supply is gone, and then things can gradually rebound. Yeah, but what happened with Azuki is that they had that reputation. That their amazing execution, which in my opinion is what was really holding up there and supporting their prices for a long time. And they had kind of kicked the can down the road on what they’re going to do next. Always like some slightly vague, obscure thing that just looked cool without really doing anything. But they had this alert that they were doing something massive without really delivering anything. It got to the point where people had built up, okay, something big is going to happen here. And then when they launched it this new Elementals Mint, where they basically printed 20,000 NFTs that look like the current 10,000 they had, and they made people spend $40 million on them. Their holders as well. They made their holders spend $40 million, so they had less money to support any drop that happened. And then the supply was up three times as much over all these different collections. So it just broke the cycle of trust and also broke the amount of funds that their high net worth holders are willing to put in to stop that project from falling. It’s tough. I think, in my personal opinion, I think that it was a little bit rushed because they wanted to get in front of this other big anime project that was launching called Ether, and they wanted to get their 40 million before Ether took their 10 million or whatever they were going for, and what ended up happening is it just lost trust and began to cascade. 

Matt Zahab 
Did you snag any? 

Liam Herbst 
No, I’m definitely not buying. 

Matt Zahab 
Yeah, same. I had a buddy who I haven’t heard from in while who was like, hey, I grabbed ten, you want five? And I’m like, someone’s texting you that, it’s usually not a good sign, you know what I mean? Because if you find gold, you’re usually not giving gold away for free. So as soon as that happened, I fired up Twitter, saw what everyone was writing, and I was like, I’m good for that. Another thing I’d love to discuss is new NFT trading instruments futures. It’s made the market better and more efficient. Is there anything else new that’s going to pop off soon? Again, we have  futures come up earlier this year. Any other new trading instruments that can make the NFT market a more efficient, better and interesting place to trade and mess around with? 

Liam Herbst 
Yeah, I think we’re going to see a lot more native marketplaces and then marketplaces that are very modular in a sense that can be designed in a way that appeals to reflect what people actually want to find in the assets as well as have more customization on the user end for what they really want to see. So I think that’s going to happen. We’ve talked about perps before. I think that it’s a little bit of a risky area because NFTs aren’t as liquid and NFT perp actually I don’t think they had their safety practices and the way that it was designed wasn’t seem to be up to par and they tried to grow a little bit too fast. They ran into some trouble. Tribe3  is another one I mentioned which has been doing well and I think is going about it in a much more cautionary way and excited about them long term. And then just on that point we just said about modular marketplaces and products releasing more of their custom own native marketplaces. There’s one company called Mintify that’s building more of like a Bloomberg Terminal type experience for trading and it is going to basically build systems or build designs and such that do reflect the individual nature of specific assets like if you wanted to buy Sandbox Land as an example, or Metaverse Land and other deed, even a DeGod which has these points attached to it that are off chain, etcetera, that’s not really reflected in OpenSea or Blur today. And they’re taking the approach that more and more NFTs are going to have unique features that aren’t this catch all experience. So when you have tickets on when you have tickets that are NFTs. And what is the secondary marketplace going to look like for tickets? It’s probably not going to look the same for PFPs, it’s probably not going to look the same for art blocks, etcetera. So they’re trying to build a system that is much more modular, has a much higher level of customization on the user end, etcetera. So I think that we could see that future arise a little bit more with unique individual marketplaces from companies as well as more like modular, larger marketplaces. 

Matt Zahab 
Yeah, no, that’s a super good point, I know we are getting a little tight for time here. A couple more points, Liam. Another thing that you hammer home and that I love is you are very bullish on ETH. And you think it will outperform virtually every NFT. I am in the same camp as you here. You and I are sharing the same yacht. Maybe not a yacht, maybe it’s more like a kayak or a tin boat, but at least we’re still floating. We’re not underwater yet, but nonetheless, why do you think ETH will outperform virtually every NFT? 

Liam Herbst 
I believe in ETH and I feel like more and more projects will begin to come online and the demand for smart contracts is going to rise significantly. And ETH has pretty significant network effects in that realm of things. The reason why I say I think ETH will outperform NFTs, at least major NFTs, is that the path we’re going to is more high supply, low cost NFTs. That’s where I really see the future and that’s where I really see this next wave of NFTs happening. I don’t think we’re going to see 10,000 collections owned by 4000 people with floor prices of 10,000 jump off. I think there’s going to be a pretty strong bifurcation between very low supply niche, niche collector items and then the high supply open, accessible that you want to get tens of thousands, hundreds of thousands, millions even of users onboarded to. And if we look at the latter one, like imagine if Fortnite comes on to the Web3 scene and they launch. The amount of assets that will be traded, owned, etcetera. It’s not possible, obviously, to get an L-1. It’ll likely be on an L-2 and what will happen is that amount of activity will drive much more value to the chain, presumably rise the value or grow the value of ETH itself as an asset. And I just don’t see there being the same demand trickling down at least immediately into to these current, like, 10K type project styles. Basically, to sum it up, I think the future of NFTs is very high supply projects, tons of activity on the blockchain. And when that happens, I think that the value of ETH will increase. And I don’t see necessarily the same demand coming for these mid size, smaller NFT projects that exist today. 

Matt Zahab 
Yeah, it’s so true. Last thing, your current investing approach, you’ve been doing pretty darn well. You’re buying art early from top ten NFT artists. You’ve been hammering this home. We talked about this on the last pod as well. This has inherent utility, just like the beautiful piece of art behind you. I don’t know who did that. It looks pretty darn sweet. I’d hang that on my wall. I don’t know if it’s nice. I don’t know if it’s not nice. I’m not an art guy. But NFT art, it has such an in your face. Obviously, utility being its art, if someone thinks it’s beautiful and the artist has clout, they will pay for it. It’s like any other art where people go, why is a Van Gogh? Or why is the Mona Lisa worth $100 trillion? It’s because the market thinks it is. And the market has agreed that this piece of art is worth X amount of dollars. So you’re doing this, you’re doing pretty darn well with it. Why are you buying so much early art from top ten and NFT artists? 

Liam Herbst 
I’m trying to. I mean, I definitely don’t have the bankroll to buy, like, XCOPY 101 and stuff. At least not yet. But my general take on this is I believe that this is a massive inflection point for art and art history and the people who were the pioneers in this early stage that have remained relevant throughout this bear market and will likely sustain that relevance over future cycles. I think that their early work will be very highly demanded and it’s obviously scarce. There’s so many reasons why I think art on chain is better. It’s obviously like verifiable. You can see the provenance and lineage of who owned it, how much it’s transacted, the prices. It’s all very easy and transparent.  The ability to trade it is so much easier. But more importantly, I just think it’s cooler. It’s like I would rather own Dynamic Gif from XCOPY than I would even a cool painting or whatever. I think that you can do so much cooler stuff. So I’m trying to collect more of these animated active works from collectors like XCOPY Fellowship, Jake Fry, Jake Freed, ACK, all those kind of people just trying to build up my stack of stuff that I personally just think is really cool and that I like and I’m happy to hold for 5 10 years, probably never sell and just begin to collect that now. And my thought is, I really only think maybe like 15 20 artists from this current time period will really be relevant in ten years. But the ones that are their early works will be incredibly valuable and there are enough of them. It’s not like in trad art where it’s just like the one of ones predominantly they get awareness and you can see you can buy one of 7000 piece from XCOPY and I think that’s pretty cool. You can have 4000 people, 5000, 6000 who own XCOPYs like real work that they have created. Not prints, not extras. I think that much stronger network effects around those artists and their ability to grow and share over time, and especially the ones that are still active, that are putting out new work now, their early work will only just go up and up in value, presumably over time. So I think it’s a safe bet that I’m putting some funds into now. Definitely not betting the house on anything in crypto, but it’s been a fun journey to collect that and looking to add more. 

Matt Zahab 
I love that, man. Yeah, I need to follow in your footsteps and do the same. Have some ETH sitting on the sidelines and need to level up the art collection, maybe get rid of the Cool Cat and throw up something sweet and improve the house aesthetics as well. Liam, always a pleasure my friend and love chatting with you. Love having you on. Can’t wait for round three. Until then, wishing you all the best. Hopefully I will see you in person soon. And before you go, please let our listeners know where they can find you online and on socials. 

Liam Herbst 
Yes, man, it’s my pleasure. Always a fun time to jump on and chat. I’m at @liamherbst_ on Twitter. My tag name is Herbie, so I tweet often. My focus actually on Twitter is moving towards investor case studies and fun stories about these crazy trades and where people can learn from them. Taking more of a medium and long term approach. Stepping back from the craziness of like, this thing went up today, this thing went down to trying to better understand the principles and consistencies between people who have had real outsized success in the market. So if you’re interested in that, an example of one thing I wrote two friends of mine who bought a bunch of Board Apes early and sold them for made like $18 million on the trade. So that’s the kind of stuff I’m going to be covering. And yeah, if that’s up your alley, follow me and shoot me a DM. Would love to hear from you. 

Matt Zahab 
As always folks, I will include everything in the show notes and as well as Liam’s twitter handle @liamherbst_ . Liam, always a pleasure, man. Really appreciate it and can’t wait for round three. 

Liam Herbst 
Thank you. I’m excited for it too. 

Matt Zahab 
Folks what an episode with Liam Herbst. Always bring in NFT knowledge. We absolutely love to see it. Anything current NFT market and future of NFT related, we covered, Liam covered rather. Always a treat having him on. Huge shout out to Liam and his team for allowing us to do this so quickly. Again, folks, if you enjoyed this, and I hope you did, please do subscribe. It would mean the world to my team and I. Speaking of the team, love you guys. Thank you so much for everything. Justas my amazing sound editor, you are the absolute man. Appreciate you so much. And to the listeners love you guys. Thank you as always. Keep on growing those bags and keep on staying healthy, wealthy and happy. Bye for now and we’ll talk soon.