Many people got into crypto for the money, but what made them stay?
For Daliso Ngoma, it was two things: supporting artists by collecting their stuff and having fun while at it. But it didn’t start this way.
Let’s start with the biggest lesson you’ve learnt from collecting NFTs?
Never make assumptions until you test them out. I heard about NFTs for the first time in 2017. Then, the CryptoPunks NFTs were free to mint, although you had to pay a small sum for gas fees. But I thought people were silly for spending money on “Jpegs.” Fast forward to 2021, the space blew up. If I had taken advantage of this knowledge earlier, I probably would have made a killing.
On a related note, I knew about cryptocurrencies and DeFi projects even earlier, but I didn’t take an active step until a few years had passed.
That sounds interesting. Can we take it back to the beginning?
Sure thing. I suppose it all started in 2014. I was studying for a degree in Computer Engineering at a Malaysian university, but I was still plugged into the tech news at home in South Africa. Sometime during the year, a crypto exchange called Bitx — which is today known as Luno — launched.
How much did you know about crypto at the time?
Not much, and I didn’t think much of it either. My focus was on getting good at mobile development, even if that meant not having the time or the bandwidth to think about much else. Crypto might have been a new technology, but I didn’t think I was missing out on anything.
When did it feel like you were missing out on something potentially huge?
That would be 2017. My housemate taught me about Initial Coin Offerings (ICOs) — which is a way developers raise money for their crypto projects — and I was curious. I took my first active step and participated in a couple of ICOs for DeFi projects such as Aave, which was called LEND at the time.
It was a lot of jumping into Telegram groups and reading whitepapers to check what the tokens were about before making a financial commitment. I made a few returns, but it wasn’t constant.
Why not?
Again, I had other interests. This time, I had started an Augmented Reality (AR) and Virtual Reality (VR) devices distribution company called African Technopreneurs, and most of my energy was directed toward this.
So yeah, while I participated in some ICOs, I didn’t look deeply into more crypto projects. I thought that I had my hands full with AR/VR development, and it would be tedious to combine it with crypto.
That said, I started Dollar-cost averaging to passively invest in BTC and ETH. Around this time, I also heard about NFTs, but it wasn’t until 2020 that I started wondering what was happening in space.
Do you have any idea what sparked this interest?
The 2020 pandemic and the global lockdowns. First, it was hard to get the AR/VR hardware from China, effectively crippling the business for a few months. It was bad timing because I had just hired a couple of people for the business, and now there wasn’t much to do.
Two things about this event steered me towards crypto: I needed something else to do in the meantime, and I could also use some other means to make cash.
Interestingly, things were picking up price-wise in crypto, so it made sense to at least look into what was happening. For the remainder of 2020, I experimented with DeFi projects such as Uniswap.
As the year drew up to a close, NFTs came up on my radar again, and I figured that it wouldn’t hurt to dip my toes in.
It’s a fast life. What was it about NFTs that drew you in?
I like art. I picked up photography when I was in Malaysia. Essentially, I appreciate such things.
Besides, the NFT space is distinct from others in the crypto ecosystem. I don’t need to have technical knowledge of crypto or look at numbers or charts on screen for hours nonstop. It is more fun buying art pieces — I like the art, and I buy it.
There was one more thing about NFTs that I liked.
What was it?
There was more cheer in the space, which made crypto and DeFi bros seem like a bunch of trolls in comparison. For instance, there were several rug pulls that happened in crypto in 2017, and it was almost as if people didn’t care about the ecosystem.
More often than not, the NFT community was about celebrating each other and enjoying the art. I liked this vibe better.
Fair enough. Did you have any initial goals, though?
Because everyone was recovering from the dreariness in 2020, my earliest experiments with NFTs were tied to speculation. Buy an NFT when it is low, and sell it when the price peaks.
After a few months and multiple interactions with other players in the space, I realised that it’s not all about the money. I guess when you’ve made some returns, you want to stay around and see how you can contribute to the space. In my case, there was a flip in my brain and I was like “wait, I can support an artist from anywhere in the world by buying their NFTs.”
It was also refreshing to know that most of the money would go to them. I do think that the noticeable absence of gatekeeping was one of the reasons that kept me in the space. More than a year later since my first experiment, I’m still very much into NFTs.
Can we talk about some of these experiments?
Sure. At first, I bought at least an NFT from all the major marketplaces — OpenSea, Foundation and Rarible. I didn’t buy from SuperRare because I assumed that the art there was more expensive than others — I saw projects being listed for double-digit eth. It didn’t matter how much I liked the art, the money had to come from somewhere.
Haha. True.
I made my first purchase in April 2021, and it was an NFTcalled “SKUL 003.” Interestingly, the artist is also an AR developer named Leighton, so it made sense that I gravitated toward his art. At about the same time, I bought another NFT from Foundation. The name of this one was “Stop Being Poor.”
Interesting name.
Yes, I thought it was funny, and that was why I bought it. I did something funny as well: I bought it for 0.1 ETH ($300), but I listed it for 10 ETH (~$30k). I know no one is going to purchase it at that price, but it’d be another great joke if someone does.
The experiments just picked up from there. I bought into projects like the CoolCats and a lot from African artists. I’ve also gotten into projects that aren’t too mainstream but have given me sizeable returns.
The next point for me was to start minting and selling my own NFTs as well.
Oh?
They are actually tongue-in-cheek. I tweeted something on Twitter, made a screenshot titled “Just right-click” and minted it on Foundation. When it sold for 0.1 ETH, I split the money with the artist who inspired me to mint it.
Between then and now, I’ve taken more screenshots and minted them on Foundation and OpenSea. It’s wild because the average one sold for $300 — $400. At the very least, the proceeds gave me liquidity to support more artists and collect their stuff.
Fascinating. Speaking of, how do you decide which NFT to collect?
My general rule is that it’s probably worth it if it looks nice. Also, if I like the artist and the work they’re putting in, I’ll go for their stuff.
Then I consider the community behind a project. It’s overrated sometimes, but it also works because communities are a great way to find interesting stuff. Recently, I bought into Tubby Cats and Froyo Kittens, and it was an easy decision because crypto Twitter is fond of these projects.
On the flip side, how do you know it’s time to sell?
It depends. Sometimes, it’s because I need liquidity to buy into another project. However, one simple guide I follow is to be open to selling an NFT when it’s worth x10 the original price. I should say that this rule doesn’t always work. I’ve sold some Cool Cats NFTs for at least 10x the initial price of 0.02 eth (~$64), and then the floor prices — the lowest price of any NFT within a collection — have grown to 6 ETH (~$19k) the last time I checked. However, if you can get your initial capital out, consider doing so. The rest is house money.
I should add that I don’t sell everything. There are some — typically the ones where I have only one NFT in the collection — that I’d probably hold for as long as I can.
How do you imagine your relationship with NFTs has evolved?
I’ve toned down the need to primarily make money from NFTs because I’ve taken out the profit I need for a variety of things. These days, I’m fine with spending time in the community, understanding what’s happening in the NFT market and figuring out how to play a part in supporting other artists.
Last question. If you were a sceptic, what would you find annoying about NFTs?
There’s a bit of delusion about how sales work sometimes. Let me add some context: fast or huge sales don’t happen all the time, but I feel many people expect this to be the norm. It isn’t, and it can be somewhat annoying seeing how out of touch the space can be.
In the grand scheme of things, though, this is pretty negligible. The most important thing is I’m having fun, as are other people.
Check back every Monday at 10 a.m. for a new episode.
