Constant Dilution: The reason why some NFT projects are dying right now

Tugan here.

This article is an adaptation of LambolandNFT’s thread. Errors and omissions are my own. Credit for good stuff is Peter’s.

An NFT's floor price is determined by a complex interaction of supply and demand.

While market conditions (bull and bear markets) have a significant impact on supply, demand is largely determined by factors such as the actions of community members (do they offer their NFT for sale?) and team actions (do they boost the supply or reduce it?).

At the end of the day, it all comes down to the fundamental principles of the free market. First, let's look at some examples of supply shock and then dilution.

Case Study #1 - Azuki, Summer 2023