NFT Micro｜Can art NFTs be selected from the perspective of value investment?

short story:
British economist John Maynard Keynes was not afraid of the arrival of German troops in France during the First World War when he learned that a large number of paintings by the late artist " Edgar Degas " were about to be carried out in Paris After the auction, he persuaded the then Chancellor of the Exchequer to spend 20,000 pounds for funding, which was allocated to the National Gallery to purchase many of the works that were sold at the auction. He also collected 135 paintings by famous artists during his lifetime. And most of them were bought at low prices. The total investment at that time was 13,000 pounds. If the total value of the paintings is estimated today, it should have exceeded 70 million pounds (about 88,000 US dollars).

Regarding the NFT market, the assets have not been actually invested in it so far, and the main reason is that it is still difficult to understand. Compared with the cryptocurrency of the blockchain, it can be regarded as the product of science and technology, but NFT is to incorporate the creative arts such as text, drawing, and video into the blockchain. The advantages and disadvantages of science and technology have their own theories and data, but the evaluation of art is not. It is very subjective, and the application is gradually expanding. If you invest at will when you are confused, you will not know whether to buy it for its artistic value or simply fall into FOMO.

If some NFTs that are empowering, applied to Gamefi, and born in response to DAO are excluded, and the NFTs of artistic creation are simply used as the target, can we choose with the thinking of value investment?

📈About value investing

The Simple Core of Value Investing:

1. Choose an excellent company with a near-monopoly or leading position: it has excellent and difficult to penetrate business products, sustainable revenue growth, strong moat and continuous cash flow income.
   
2. Start when there are enough safety margins: start at a relatively cheap price to keep room for future growth and reduce the risk of loss.
3. Long-term holding: It has growth potential and can be re-invested on a regular basis. The power of long-term compound interest cannot be underestimated.

🎨About Art

Citing the content of the Educational Dictionary of the Education Research Institute, the concept of art can be classified into six items:

1. To produce beauty: This is the classical definition, which asserts that art is an intentional human activity whose purpose is to achieve beauty.
2. Representing or recreating reality: This definition is based on the artistic theory of "art imitating the present treasure".
3. In the creation of form: Art is the giving of form to things.
4. Representation: This definition shifts attention from the activity to the subject and focuses on the artist's conception.
5. It is to produce aesthetic experience: pay attention to the effect of artwork on viewers, and argue that the effect of art is to produce aesthetic experience.
6. It is about generating excitement: It is argued that art is about generating overwhelming, subversive, or downright exciting experiences.

It can also be simply divided into two types:

1. Activities and productions involving technology and thought are called art, and there are many elements of "technology".
2. Activities that contain aesthetic value and their products express the creator's thoughts and emotions, and empathize with the appreciators. There are many elements in "thoughts and emotions".

On the whole, it can be regarded as an excellent artwork that can effectively convey the "thoughts" and "emotions" that the creator wants to express through "technology".

🤔 How to evaluate art NFT

Since there are many types of artworks, and they can be freely created, there is no monopoly, and artwork preferences are more subjective. The style you like may not be loved by others, so if you want to evaluate whether NFT artworks are worthy of collection, individuals will think about a few Observation Point:

• Whether the creator's works have their own style and can continue to be produced, and some people are willing to bid to buy them ; ➡️ It means that the creators are not simply following the NFT craze, not treating buyers as leeks, and the style of the works is not unpopular.
• Whether the creator's works can maintain a certain level, and can make further breakthroughs and innovations with the evolution of technology ; ➡️ The investment is in digital art creations, non-traditional art works. If NFT can be applied to Metaverse in the future, its value should also be able to Then increase.
• In addition to creating, the author also operates his own social platform ; ➡️In addition to showing his works to more people, since he wants to invest, he hopes to see its value return in his lifetime. After all, he is not buying a master class like Van Gogh. of traditional art works.

When you are optimistic about and appreciate a certain creator, it is all down to how to buy it with a sufficient margin of safety;
In the trading market, no one is willing to sell at a lower price than the purchase price, especially those well-known and excellent works of art, it is even more difficult to see their prices collapse, but in the blockchain cryptocurrency world, there seems to be another Feasible way; the so-called one day in the currency circle, ten years in the world, the current NFT transaction method is still the mainstream of ether (ETH). It is easy to see that as long as you work hard to accumulate coins when the currency price falls sharply or is in a bear market, there is still a chance to buy your favorite NFT works at a lower cost, and finally wait for the sharp rise in the currency price or the purchased NFT author. The public is optimistic about the favor and the market price soars, and then sells to earn a reward.

🔎Art NFT works observation

Promoting social justice with blockchain technology through @Matty's article | CodeGreen gave the Matters community 100 free NFT minting quotas, recognizing that Code Green , a decentralized non-profit organization, is currently on the official website on the theme of Women&Climate In the auction, I noticed an NFT artist " Donglu Yu ". Through the introduction, we can see that Donglu is a senior concept artist with more than 14 years of experience. He has participated in the visual development of many AAA game works. EX: Far Cry 4 , Assassin Creed 4 series , Deus Ex: Human Revolution and other games and the 2019 Lion King movie, and was invited to participate in the International Women's Day event in March this year. His artistic creation style has personal preferences (art is inherently subjective), so as to observe the artist's NFT-related matters:

• CryptoArt 's Top Artists list:
  This ranking is based on Total Artwork Value, and it is considered as a reference only. In the ranking on April 26, Donglu is now ranked 482. 23 works have been sold, and the highest selling price of works is 57,000. Thousands of US dollars, the total value is about 380,000 US dollars, and the average value of each work is about 16,000 US dollars. Check the sales price and date chart of the works. Big jump off the difference.

• scarcity
  Most of Donglu 's NFT works are sold on the SuperRare platform, which supports only one version of a work, which is very scarce and guarantees that only one of the purchased works will be in circulation in the market.

SuperRare is an NFT platform specially built for professional and well-known artists. If users want to sell their works on SuperRare, they must go through a strict review, so the review failure rate is also very high. In addition, SuperRare has a relatively complete protection mechanism for the copyright of works. It is a highly respected NFT trading platform for professional artists or creators who focus on copyright issues.

• The richness of works In addition to the general static visual paintings, the finished products recently launched by Donglu also add auditory and dynamic visual effects to add more artistic value.

• community management
  Donglu operates on multiple NFT trading platforms, fundraising platforms, and communities (Twitter, Instagram), with fans ranging from thousands to more than 100,000, and also interacts with fans on community platforms. Place the creations for appreciation. The 23 NFTs on the SuperRare trading platform are only a corner of the works, and there should be opportunities to develop their own exclusive brands.
  
• The rate of return is based on the information of the Superrare platform. For the two works that have been sold and listed at the list price: Red Shades of Love and Blue Night , the initial selling price (currency: ether) is 20 and 6 respectively. The current List price It is 40 and 27.81. If someone is willing to buy it in the end, the rate of return will be nearly 2 to 4 times as much.
  

Personally, I like the style of the creator's works. If I only collect works of art, I will consider it, but I will observe the frequency and price of subsequent works.

in conclusion:

So can you choose art NFTs with a value investment strategy?
It is considered to be quite difficult. After all, it is still difficult to evaluate its value from public information such as company financial reports and fundamentals. It is also greatly influenced by people's subjective aspects. Risk is still high, especially market liquidity will be a problem. But the NFT boom will only start in 2021, and it is to be expected how it will develop in the future

But at present, NFT will not be used as an investment target option. For NFT, I am optimistic about its future development and application in Web3 and DAO. However, if it is to be used as an investment tool, it still needs to be considered. Although there are many people in the market who rely on NFT transactions to make big money news but reminded himself to beware of "survivor bias".

I am a Talf house, sharing my life experience, learning, reading and other experiences through text. Keep it for yourself and for those who are interested, thank you for reading.