How I Evaluate New NFT Projects and Why I Decided to Buy Koala Agent #273
I always loved the artwork of the Koala Intelligence Agency but felt like I missed the boat back in the late August hype when the floor spiked well above 1 ETH. Now that the price had come back down, it was finally time for me to pick up a 'walla'. Here’s what I like about the project.
When I buy a piece of digital art, an avatar, or another kind of collectible, the aesthetics matter a lot. It needs to be something I enjoy looking at, or an avatar that I would actually want to be my profile picture. Objectively speaking, the KIA artwork is of a really high quality. You can tell it's done by a highly skilled artist whether you like the style or not.
Speaking of personal taste, I really like the KIA collection. I generally prefer clean, monochromatic, and ideally grayscale artwork with just a splash of color to add some contrast and a spark in the artwork. Based on this description, you can tell why I'm excited about the koala I was able to pick up.
The koala I bought is actually one of the least rare ones and serves as a great example of when aesthetics matter more than rarity. I'll enjoy having this in my wallet, or even as my wallpaper or profile picture, even if the price gets cut in half.
For the overall success of the project, I also like that there are no “bad” pieces in the collection. In many collections you’ll see a few (or a lot) of pieces that are much less attractive than the rest. These can really drag down a project by lowering the floor price, the community spirit, and the interest from potential newcomers to the project.
The attitude and style of the koalas vary quite a lot, from the serious and subtle to the fierce and flashy, but they're just different in who they appeal to, not in their quality. The broad appeal is arguably one of the strengths of KIA.
Utility and roadmap
I will admit that the KIA NFTs don't have the strongest utility right now. This obviously isn't a deal-breaker for me, but I do want to see some concrete plans for the future.
One thing the KIA project already does very well is supporting some great causes. They have donated a significant amount of money to charities helping wildlife and koalas specifically. I love seeing this willingness to help the less fortunate and use money for good! It says a lot about the team and makes me even happier to be part of the community.
Furthermore, while the project doesn't have a concrete roadmap right now, it is expected to be announced within the next few days. Most importantly in this context, I believe that KIA has the team in place to not only come up with great ideas for the roadmap, but also to execute on them. An elaborate roadmap without the right team is worthless, as proven by many other NFT projects.
What's really important when a clear roadmap isn't yet in place is how the team communicates about it. In the case of KIA, the team of 4 has done a great job with the communication on Discord and Twitter, giving frequent and consistent updates on what's going on behind the scenes and when the community can expect more concrete announcements.
This communication has kept the community engaged and prevented people from raising a lot of questions and doubts about the future of the project. Even when there’s nothing super concrete to announce, it’s much better to tell that to the community and give some rough deadlines as the KIA team has done.
When the hype and short-term speculation died down in late August, the strong community became even more visible. The numbers tell one part of the story: KIA has almost 23,000 Discord members and more than 24,000 Twitter followers, plenty of which are using their Koala Agents as their profile pictures.
Furthermore, the 10,000 Koalas are distributed among almost 5,000 owners. This is very impressive in this space, especially for a relatively low-priced project. It’s very common for newer 10k projects to have 3,000 - 4,000 owners, whereas the BAYC, for instance, have their 10,000 apes distributed among 5,500 owners. The BAYC has one of the highest distributions in the NFT avatar category, but it also makes intuitive sense for something with a floor price of $120k.
The good thing about a high owner distribution is that a person who owns just 1 NFT is less likely to sell. Someone who owns 10 or 50 NFTs from the same collection is likely to suddenly sell a bunch, thus pushing the prices down. These people generally have a lot of power over the market, so the fewer of them who are in a collection, the better.
The other part of the story is the less quantifiable one, the "vibe" of the community, the feeling you get from spending a few hours in an NFT project's Discord. It's always hard to put into words, but you know if you like it or not. If it's something you fit into and want to be a part of. I personally like what I’ve experienced in the KIA Discord so far, which is absolutely essential because the community is such a big part of what I'm buying with these NFT purchases. People are welcoming, helpful, and not just talking about sweeping the floor, pumping the prices, and making money.
Price & timing
Now, when I buy something because of all the above, my exact entry price and expected ROI obviously don’t matter as much. At the same time though, I am still an investor and don't like losing money. Luckily, it just so happens that great artwork, a skilled team, and a strong community are likely to be what turns KIA into a great long-term investment.
In terms of price and timing of my purchase, I like to see some consolidation and stabilisation after a big run-up like the one KIA had in August. The prices have been consolidating all throughout September and have started to creep back up. I believe we could see the prices continue in this direction, especially as specific plans for the future are announced. I also think that the prices are unlikely to drop below the levels we’ve seen in September.
Of course, as always, none of this is financial advice. This is all still very new to me and everyone else, and I'm still just learning, exploring, and sharing along the way. I'd also love to hear what you think of the Koala Intelligence Agency and my thesis about the project, so please reach out or drop some comments below!