Loss Aversion & NFT FOMO Science | Project: Bankless DAO

Theme: Loss Aversion NFT
Loss aversion in behavioral economics refers to a phenomenon where a real or potential loss is perceived by individuals as psychologically or emotionally more severe than an equivalent gain. For instance, the pain of losing $100 is often 2 to 3x greater than the joy gained in finding the same amount.

• Are we having fun yet
• Stop checking prices on long holds
• Science of FOMO and HODL
• Do the emotions match the reality

• Affordable project: Double down - https://www.coingecko.com/en/coins/bankless-dao 

• NFT News
  • NFT Headlines: 
    • Mark Zuckerberg Unveils NFT Roadmaps For Facebook & Instagram 
    • Uniswap Labs Pushes Further Into NFTs With Genie Acquisition 
    • Doodles NFTs Announces Pharrell as Chief Brand Officer, Fundraise Led by Alexis Ohanian - Decrypt 
    • eBay acquires NFT marketplace KnownOrigin 
    • Solana NFT Marketplace Magic Eden Raises $130M, Plans Multi-Chain Expansion - Decrypt 
• Transcript:

[00:00:00] Today on all about affordable NFTs, we are talking about loss, aversion and NFTs, the secret science behind FOMO and ho we'll get to that later though. Andrew, what are we seeing in the news? Oh, right. Yeah. What are we seeing out here? We've got, oh, we've got genie X, Y, Z has been acquired. So this is an aggregator.

[00:00:22] This has been acquired by UNS swap labs. So. Uh, UNO is their first real push into NFTs, but I think this is pretty significant. We saw gem another aggregator get acquired by open sea a couple months ago. And this was, uh, this was the other big aggregator out there is the other big aggregator out there right now.

[00:00:44] And, uh, that's big that UNOP has, has acquired them. Um, I can definitely see, um, how they will, uh, or, or how this could add some different liquidity options with, uh, unit swaps. You know, if the unit swap can build this into their suite of products, Yeah. We mentioned genie a while back when we were talking about multiple bids and bid aggregators, and you actually called the fact, they're like, I'm gonna do some transactions on here because I bet they're going to make a distro at some point now they don't have a coin coming, but they are, as I understand it, going to be rewarding, the people that had transactions, and this has already been snapshotted with U S DC coin or with a stable coin.

[00:01:23] I love it. I, you know, what's in your wallet. I think we did some transactions there, way back because of that episode. So late in alpha. Yeah. Yeah. I mean, that's, that's interesting. I haven't seen a, a straight U S D C airdrop like that, but I like it. I don't have to worry about the token price suddenly diving as everybody is everyone.

[00:01:44] Yeah. Usually when that happens, it's like, all right, start your engines. Let's liquidate this thing as quick as. All right then next we've got some news on what is coming for Facebook and Instagram regarding NFTs. So, um, I'm not sure if you've had a chance to look much into this, uh, yet George. Yeah. I mean, as I understand it, it's a deeper integration with NFTs and eyeing toward, uh, an actual, I think more of a, a marketplace, as I understand it.

[00:02:14] Yeah, and it sounds well, they are putting aside the, the issue of the 47.5%. Um, fee that they'd like to take. They're saying that they're just, just going to be a free for now tiny taste. Don't worry about it. We're gonna give you it free for now. And then, I mean, at least they're telling you this time that they're what they're going to do.

[00:02:33] In many cases, it's been, we'll give you something free and then we just change the terms later on and start charging charging brands for, for the same exposure. So, you know, we'll see what happens here. Um, You know, we we've talked about how this has the potential to bring a lot of people in. And I just hope that it is the right experience.

[00:02:53] If this is what's going to be the first NFT experience for many people. What I do like is it's making you realize that there's a commoditized race to the bottom game for platform fees, right? Even 2.5, maybe look back and that's the open C. Maybe just you're like for doing what exactly making it riskier, allowing a whole bunch of other fake projects to scam me, letting latent contracts get stolen.

[00:03:21] Like what, what was this 2.5? Get me, uh, sorry, sorry for the flood there. But like, I'm just saying it's reflective of a commoditized market where the, the number you're going toward is zero. So you're gonna make your money maybe some other way. Uh, but 2.5 seems high and it's a very, very important. You don't have to look far back in history books to see Facebook with a, a proud history of rugging developers and people that rely on its platform.

[00:03:47] Yeah. Yeah. So what's another 45%. I think it's well worth it. Right?

[00:03:51] Well, 47.5 45, whatever man. That JPEG's gonna 10, 10 X. Okay. All right. So next here we've got doodles. They have announced, uh, Pharrell as their chief brand officer. Um, they've also raised another round, uh, led by Alexis Hanian, um, the founder of Reddit and has his own, uh, VC fund. Now, um, the, the price on those have of course climbed on that news.

[00:04:16] They also had a, I understand they had a impressive party. I assume. PLL probably. Probably performed at the party. Um, but they've had some pretty, uh, good live events I've heard in the past. I think they had a big event at, so by Southwest and, uh, the price after that RA, uh, uh, started going up as well. So, um, interesting.

[00:04:35] Definitely. Uh, not going away, like we've seen some other, I don't know, some other big name projects, just kind of Peter out. And we're seeing that they're still, still going for it here. Yeah. I mean, I consistently hear strong things about their team. Um, I don't own any doodles. They are. They're not on my short list.

[00:04:52] Cause their price doesn't come to very much affordable territory. Very often. Point . Yeah. That's good for them. Right. congrats if you are a holder. Cause that's uh, I wouldn't, I wouldn't look to sell that right now. If I, if I were holding no.

[00:05:06] We've got some other news of a, I guess, a web two company coming into the NFT space. This is eBay acquiring NFT, marketplaces, known origin. I dunno if I'd say marketplace necessarily. It's more of a, uh, NFT art platform. Um, but that's. It was that's big news. Um, I was very surprised to see that eBay was the one that ended up with known origin.

[00:05:31] I thought that there was, I mean, it seemed to me like there was a possib, there was there would've been a good case to be made for them being acquired by a more crypto native company that, uh, I presumably could keep, just give them more stability, um, over time. Well, you need, you need capital to make acquisitions.

[00:05:49] And when you're capital and your bank may have been held in crypto, It's hard to make moods potentially. So, you know, it may be a big web, two opportunity buying point. Yeah. I just, I didn't didn't know that I was going to have eBay based NFTs in my wallet. well, I mean, you see it in Shopify. I mean, the eCommerce giants know that there's a lot of transaction volume.

[00:06:16] And, you know, they're, they're in that game. And so I think there's a realization that it doesn't matter if it's, you know, tangible and tangible with regard to like, am I, is it a physical object or we're just talking about a transfer of ownership of a object or an idea. Yeah. I mean, they definitely get that part.

[00:06:36] And I think, you know, in some ways it's a lot easier when you don't have to deal with the, the physical object. Yeah. Or unless. News story we've got here, Sal NFT marketplace, the, uh, magic Eden, uh, has raised 130 million they're planning to expand to, uh, more chains. So, you know, we may end up seeing them be, uh, more epic competitor with open sea right now.

[00:07:01] So does, or Sal is on open sea, but, uh, there's. I think it's something like less than 2% of the overall volume is done on open sea. So there's not much competition between them directly right now, but I think we may see that, uh, magic Eden may, you know, may expand to the Ethereum chain at some point, right?

[00:07:21] If someone just dropped 130 million on you, you better have a total addressable market. That includes more than Solana. So I have really liked using magic Eden. I think, uh, it's, uh, it's really turned me on to like the possibility that there's something over there. Um, but it's, it's good overall for the market, 6 billion valua evaluation on that, uh, on that hybrid in a monster bear market.

[00:07:49] Okay. Yeah. I mean, that's, you know, that's an impressive, that's an impressive, but also magic Eden has days where it outperforms in terms of total volume transacted, open sea. That's true. That's a good point. Um, and yeah, we will, we'll see what happens here. I think that, you know, we're still seeing the, the marketplace.

[00:08:07] Uh, we're still seeing the market, the marketplace has developed, and I don't know that we will, that it will just be open sea. Like it has been, uh, dominating the Mar marketplace PLA or marketplace wars in the future. Yeah.

[00:08:21] All right. So our affordable project this week is a bit of a, I'll just be honest, uh, a cop out, double down but I'll, I'll make the case, uh, again, just really quickly about the Bankless and Bankless Dow token. And, you know, we mentioned it before that is coming from Bankless the leading podcast, I'd say leading crypto podcast, frankly.

[00:08:45] Um, with an amazing, dedicated, uh, audience, but also just respect in the space. I mean, just to throw it out there, one, the opportunity just to map it out is the Bankless, uh, Dow token. Currently trading at 1 cent. And now, you know, this thing is down quite significantly. Like, I mean, look in 90 days, you know, it hit a high hundred percent in the last 24 hours though.

[00:09:13] yeah, no. Uh, depending on what 24 hours we're talking about, but you know, this thing was, uh, at 12 cents, um, back in December of 2021, But I just want to, you know, play out the, the narrative really quickly is that Bankless out holders that have at least 35,000 tokens get access to the community. But what's more are part of this community that has the potential for a future NFT drop.

[00:09:37] Nothing's been said, nothing's been promised you can look back at the Kevin Rose conversation that they had. But again, if you're thinking about, you know, and I try to do this levered E plays Bankless is. Really the Vanguard of communications around E they pick up the phone and have Vitalic on the line.

[00:09:57] Boom he's on the podcast. They have a reputation in the crypto space, such that they like DMed mark Cuban last week. And with 40 minutes notice the guy is on their podcast for an episode. If we are looking for things that can carry reputation and attention capital a attention, which drives value. Um, I see this as, you know, a, a levered E play, um, at a time when you're saying like, okay, they have the, the means of production.

[00:10:28] They have the means of broadcast and they have the reputation and trust that is necessary to, to launch something of significance. And I think they are smart. And they're not gonna launch shit during a bear market, but they're building and thinking. And I think post merge and when the market returns, they're gonna remember who their friends were.

[00:10:49] And so, uh, it's a project that I'm, I'm looking to double down on and get a little more friendly with. Yeah, that's a, it's a good one to bring back up. It looks like it's actually at the, you know, right around the lowest price it's ever been. Um, so, you know, I think that's not a bad time to be buying. Um, and like you said, how many is it that you actually have to hold to, uh, to be able to join the 35,000 so full disclosure?

[00:11:15] I am, I already have 35,000. I'm, uh, looking at. Maybe pulling the trigger on some more so that I can hold and then sell when, when it, when it rises a little bit, um, you know, the old buy, I'd still be able to hold weird. When you talking about like tokens, you like? Hmm. Yeah. I mean, it is interesting, you know, we're, this is not a, an NFT, but obviously, you know, we think that there may end up being an NFT here as we've talked about in the past.

[00:11:40] Um, and, uh, you know, it is funny to think, you know, when you're buying just amount of tokens and there's no pictures, it feels. It feels very different. um, you don't feel, you don't have the much of a, an attachment to those, those tokens when it's just a number. It's true. I, you know, it really begs that, like, I want to be identified as a member of this community more so than like, oh, I looked at the assets you're holding, but on the chain and I found like, no, I like com strong communities will look for.

[00:12:12] Identifiable membership element it's um, I dunno, you know, clearly not financial advice, like I'm speculating on speculation. That's what that's, what's been in my head recently. I like this one. I, I think I do not have any yet. Um, I think I may need to, uh, go, go take. Take the advice that, you know, we gave out at maybe the wrong time, the first time.

[00:12:35] But, uh, so hold on. I, I took my own advice, but here's the joke like E I think at that point may have dropped more than the price of at the, at the point would now the transaction, but it was, it cost, I think at a time I did, it was like about 0.5 E to get 35,000. And now it's down to 0.3 E to get 35,000.

[00:12:56] And of course you can, you know, play the game any way you want dollar cost or. Just hate it. Yeah. Nice. Well, thanks for reminding us of this one, George. Yeah. I mean, our ultimate advice is we realize every time we do our project reviews, we should've just bought about two of everything we ever said, regardless of what we thought at the time, the problem is selling it at the right time.

[00:13:19] yeah. Yeah. Over a period of time, we would've done fine, but there's points at which you should sell. This is true. Well, maybe we should, uh, maybe we should get into that a bit. oh God, I don't wanna touch it. I'm so fresh. The only thing I can for sure do. And like the people in square laugh, cuz I just keep saying it is like the only firm advice I can give you is just wait until I sell something and that number's gonna go up it sure.

[00:13:41] As the sun rises in the morning, you wait for me to sell it. And that, that freaking thing is going up only. All right. So look for, look for George to sell. I'm the ultimate. I'm the ultimate sell signal. Just add 72 hours. okay. Here we go into loss. oh man, here we go into loss, avers, NFT land. And, and here's, here's the narrative that I'm, I've been thinking about, what is really behind FOMO and ho and I'm just trying to get into like why I've made some of the mistakes I've had and, you know, Been frustrated when I've been the idea of loss, aversion is a behavioral economic term referring to the, the idea that the, the real or potential loss is perceived by individuals, uh, you know, emotionally it's, it's more severe than an equivalent gain.

[00:14:29] So put another way the, the pain of losing a hundred dollars is like two or three times greater than the joy of. Finding the same amount, which is, which is a weird way to put things, but it is something that has been literally proven in, in various ways where they do experiments of, you know, would you take this gamble if it meant losing this much versus gaining this much.

[00:14:55] And we just, we hate losing things which makes it tough to play the NFT game with the swings, being what they are. And it can really, uh, cause you to make stupid buying and selling decisions. Because of this loss, aver versus playing the game as though, like you were a computer who could calculate the proper expected value and there's this like loss, aversion engine, just running the background.

[00:15:20] I don't know. Does this make sense to you? Do you see this manifest? Yeah. I mean, I, you know, I've heard of this, uh, phenomenon in the past, you know, the idea that, uh, , you know, you're, I dunno it, it's probably the reason why, why we don't sell our NFTs at the right time and, you know, hold them on the way down.

[00:15:37] And then when they go down, man, it feels like, it feels like you lost, even though you never, you know, you were never ready to sell at that high price anyway, you didn't have that, but it still feels like you've lost that. Um, when it does go down and. We've all had a bit of that, at least a bit of that recently.

[00:15:55] Um, probably a lot of that and you know, it does hurt and we, I don't think that most of us appreciate, or, you know, the science is telling us that we really don't appreciate things when they're going up. Um, to the same degree that, you know, we, we, uh, we hurt when they go down. So one way to think about it for me, I'm just trying to consider when I'm watching a number go down by, you know, oh, I've lost 0.3 on this thing.

[00:16:21] Versus when I sell for like a gain and to really say like, oh, I'm still frustrated by my gain because I'll watch it go up still. And then it's like loss a version on top of my gain. I'm like, I don't even get the emotional upside. And sometimes it could just not be fun. You it's like, even when I win, I feel like I've lost because it goes up by, you know, an amount that I was like, ah, I lost it by this.

[00:16:45] It, it, it's a very hard game. Yeah. That's the, I mean, like you were saying before, you know, you wait until, wait until George sales and then the price is gonna go, but you do feel like you lost that because you had the chance. To be, you know, to hold until that higher price came. Of course, you know, would you sell at that price or would you hold until, you know, until it ended up being at an even lower price than what you did sell it for us?

[00:17:08] You know, I think it is really hard because you don't, you it's, it almost feels like when the price go goes up, it kind of feels like, well, that's what it's expected to do. That's not, I don't, you know, I, I bought expecting that the price would go up and that's what it's doing. So I'm not necessarily going to sell when I see that happen.

[00:17:24] Um, But then all of a sudden, when it starts going the other way, you know, you, you may think a little differently, um, you know, cuz you do feel like you, you lost that opportunity. The reason I also bring it up is I'm trying to steal myself a little bit with an emotional guard, wondering whether or not my emotions about a project or my instinct about a project

[00:17:46] match the match, the reality. And so put another way. if I see that my project that I'm invested in starts going down, my emotions are probably going to cause me to hold onto it with the aspiration that I won't lose this money. If I just wait long enough and it slides and slides and continues to slide.

[00:18:10] So I could have taken a much smaller loss, which is felt as two or three X, but it's going to make me a little bit slower in thinking about selling on the way down. And conversely, it's also going to mess with how I, uh, calculate expected value for, you know, oh, I have a profit now, but I'm gonna be maybe slower to pull a trigger because it could go up more and I could lose out on that, on that Delta.

[00:18:39] So, you know, I'm, I'm trying to think about it both on the upside and downside, but it, it definitely is in play and causes me to make messy decisions. Yeah. I mean, the emotions of you're certainly gonna get tested in crypto and in, and in NFTs cuz we see these things move so quickly. Uh, Both up and down price directions.

[00:18:59] And that makes it, I mean, that does test your emotions in here. And I think it's important to just think about that, acknowledge that there are emotions at play with these and, you know, try it's, you know, try to take those out at times when you're, when you're making your buying and selling decisions. But you know, it obviously cannot be done fully.

[00:19:18] I think it is important to try to try to keep these things in mind. Take some wins when you, when you can and recognize that those are, those are actually wins and you need to do it or else, you know, it's gonna be tough to, to stay, stay around the NFT. Uh, just the FD space for, for long, I would think. And the other piece for me is the idea that this is the science behind FOMO, the fear of missing out I'm going to lose.

[00:19:48] I'm going to lose, which is going to have the emotional impact of two or three X, the amount there. And one thing that I'm really trying to hold myself to is, is not letting loss aversion jump in when I miss a mint. And then that sort of following 24, 48 hours where the price sort of pumps and inevitably comes down except in very, very, very rare cases to not be part of grabbing that bag in the.

[00:20:18] Following 24, 48 hours after, after a mint, uh, after a mint out, I'm like, if I missed the train, I missed the train. Let's just wait. Yeah, I think, yeah, I think that's smart. You gotta try to do that. You know, you, you know, there are the rare cases where it keeps moving up and I think there's some, you know, when you're interested in the project, you have, you have a tendency to think that, well, I've obviously picked the project.

[00:20:46] That's gonna keep moving up. Cuz I've picked out the one, the one from, you know, among all these others, that this is gonna be the smart one, but you gotta re. You're probably not that good. You probably, I, I know that I'm not. Um, and I generally, and you know, that's when I do make the mistakes is when you're thinking that, you know, somehow you've, you've got some sort of , um, insight into why this one's going to be so different than all the others.

[00:21:12] Yeah. I think that's a whole, whole other episode of assuming that you're better than the average investor is a very dangerous place to be yet. Here we are throwing dart. That's right. All right. Thank you for humoring me on the, on the loss of Virgin game here. Uh, anything else to add before we sign off?

[00:21:31] No, I think that was a good, good discussion. Good discussion. See you out there. I'm gonna go check the, the Bankless price now.