Collection size and governance rights
So, the majority of people actually said that most of the value for Nouns reside in the governance rights of the treasury.
The current floor for Nouns is 98 ETH. With 325 Nouns issued so far, this is a total market capitalization of 31,850 ETH. The ETH in the treasury itself is 24,486 (and you should factor in that there’s a 10% dilution in governance rights going forward, because out of every 10 Nouns, one goes to the founders’ address).
The implicit value of the governance rights per noun is 24,486/325 = 75 ETH. Everything above that should be the NFT. 7,364 ETH in total, 23ETH per NFT.
But now let’s look at Cryptoadz, the CC0 collection created by Gremplin (one of the main artists involved in Nouns). With 7,025 itens and a floor price of 1.98 ETH, Toadz market cap (at floor) is 13,909.5.
Besides Gremplin’s involvement, Toadz grant you no governance rights whatsoever, nor roadmaps and expectations of future drops by the team. So in a sense it is the best possible control group, all things considered.
[edit: I was told by f1cken on Fingerprints Discord after publishing this post that Toadz actually have a 200 ETH treasury for proposals , so you would also need to factor that in]
If we assume the same market cap but a collection size equal to Nouns, each Toad would cost ~42ETH.
So how do we explain the difference in valuation for the NFT for Toadz and Nouns? Is the Nouns NFT less valuable than the equivalent amount of Cryptoadz? My qualitative impression is that the Nouns collection, if anything, should be more valuable.
Maybe the collection size a way to create additional market cap (so we’ll see this gap trending down the bigger Nouns collection size grows)?
Maybe lumping together the NFT and the governance rights creates a ceiling for the NFT price? In that case, creating that explicit split (like BAYC did with ApeCoin) is a way to unlock value.
It’s still early and we need more data points to get to a definitive answer. It will be interesting to see how this evolves.
See you tomorrow.