NFT Projects Are Just MLMs for Tech Elites - Napkin Math - Every

When the elements of financially incentivized community, exclusivity, ownership, and growth are mixed, MLMs produce spectacular flameouts. LuLaRoe is the subject of over 50 lawsuits and has shrunk to a fraction of its former size.

But if there is any solace, there is a silver lining for NFTs: With MLMs, your entire “community” rests on a singular goal behind financial independence by selling a product - within the world of Web3, there’s a belief in a larger movement around decentralization and peer networks that connects people.

When we examine some of the more popular crypto projects, similar elements are eerily present.

This recruiting method is such an effective method of growth for the overall business that distributors will typically make more from creating new believers than they would by selling their own product.

We posit that the most prominent NFT projects, things like Bored Ape Yacht Club and Pudgy Penguins, hold such a remarkably similar structure to Multi-Level-Marketing companies (MLMs) that they will also suffer from the same failures. Investors should exercise extreme caution as they evaluate this emerging asset class.

MLMs incentivize recruiting behavior with what they call the “downline.” This is MLM gobbledygook meaning that when an existing distributor recruits a new distributor they receive some sort of financial compensation—typically a % of that person's earnings.

Today I would like to straddle that very difficult middle ground of appreciating the promises of the technology while simultaneously pointing out the (very obvious) flaws of some of its current iterations. T