Last week, social experiment The Tweet DAO took crypto Twitter by storm. I covered the story soon after the project’s launch (read here), and there was already plenty of material to write on. The project was still young though, and anything could happen, so I followed, and eagerly awaited future developments.
Here’s what’s going on with The Tweet DAO, one week into its wild, chaotic journey.
Summary of Events
As anyone could have predicted, the Tweet DAO timeline is absolute anarchy.
You have legitimate discourse like this…
Low energy egg-posting like this:
Whatever the f**k this is:
There’s also some attempts to engage with and marshall the other Tweet DAO owners. This phenomenon is actually quite interesting, and I will explore it in more depth in another section.
The Cryptoeconomics of Egg Ownership
The NFTs that grant the right to tweet from the @TheTweetDAO handle are images of eggs, in homage to the Twitter default profile picture. They minted with an increasing fee schedule, where the first 100 were 0.1 ETH, the next 100 were 0.2 ETH, and so on up to the final 100 eggs with a price of 1 ETH. The average price of an egg can then be considered as 0.55 ETH.
The collection still commands a solid floor inline with that average mint price, hovering right at 0.59 ETH at the time of writing.
Let’s think about what someone buying an egg might gain from the purchase.
- A piece of crypto twitter history (of as-yet-unknown significance)
- The ability to post from an anonymity set of 1000 users
- The ability to put content in front of a large number of followers (12.1k at time of writing)
- Access to holder-restricted spaces (if such exist)
- Speculation on the floor price of the collection
- A significant quantity of lulz
Most of these are soft gains, depending on your definition of fun and appetite to troll. The only points with hard appeal are (A) your ability to tweet to the handle’s audience, (B) speculation on the collection itself. It should readily become apparent that everything comes down to the follower count.
Without followers on the account, the owners are left bagholding a timeshare on twitter. Tweeting into the void, once per day each.
If you assume that egg holders are rational economic actors, they are incentivized to grow the reach of the account. Individually this means tweeting their funniest memes, most engaging shitposts, or best info content, every time their NFT comes off cooldown. It also means attempting to marshall the other eggheads into engaging in productive work for the account as a whole.
Here’s the catch. There’s a Discord for the project. It has less than 1,500 members. If you assume a proportion of people in the server are just snooping around like me, that suggests some of the egg holders may not be in the discord, and thus may not be available to coordinate actions.
This means that at least some of your coordination has to occur on the single public forum guaranteed to be shared by all NFT holders: the handle itself. Some users are using their tweets to persuade other egg holders to take actions for the common good like retweeting good tweets, liking from their personal accounts, etc. But, if you get too much of this, the handle becomes a schizophrenic arguing amongst its 1,000 personalities, and no one wants to follow that.
We also have to consider that the handle only has 2,125 tweets at time of writing, and it’s been live for a week. It could have had as many as 7,000 if everyone tweeted when their egg came off cooldown. This implies most holders are not fully utilizing their asset. If holders are not taking the base step of tweeting using their NFT, they are probably not going to engage in common-good work.
As I mentioned in the first article, this experiment could come to a dramatic end in one of many ways. It’s already suffered a suspension. With 1,000 degens emboldened by anonymity, Twitter discipline will probably happen sooner rather than later.
There’s also the slow death to consider. If the account does not grow and provide entertainment or value, it will become boring. It could also simply lose the attention of the crypto twitter gestalt. Any drop in attention will flywheel quickly, as it becomes less fun to be a holder, holders leave, it becomes less fun to be a follower, and attention drops further.
In the bull case, if the account continues to grow, the value of the audience will grow. This would make promos of one’s own bags potentially profitable, and could make a viable market for secondary sales of tweet space. In a similar manner to Convex/Curve bribes, users could offer money to holders in exchange for tweets.
The bribe market would be the most bullish case for the DAO, as it would turn the illiquid JPEG into a cashflowing asset. This also has the effect of reducing sale pressures due to profit taking.
It’s been a wild and wonderful week for the Tweet DAO. Will they make it? Will the eggheads become the first decentralized influenza? Find out next time.