Crypto-backed online communities are constantly wrestling with speculation. Take DAOs, or “decentralized autonomous organizations,” which use crypto tokens like access keys – a bot confirms the requisite tokens are in your wallet before letting you into a private Discord server, where the organization awaits.
Rallying around shared ownership of a token can incentivize development and community building, but as the price of the token increases, the group inevitably ends up weighing the value of continued membership against the value of cashing out. The crypto market never sleeps, and neither do token prices. How should community members feel if the price of admission shoots up 10-fold overnight?
This is more or less what happened to Crypto Packaged Goods (CPG), a new community that’s betting big on the long-term value of mentorship. A limited supply of 250 non-fungible tokens works as access keys. At press time, the lowest price for one of those NFTs on the secondary market (that’s the “floor” in crypto speak) was 2.4 ETH, or around $7,000. When they launched earlier this week, the tokens cost just 0.2 ETH apiece.
Orchestrated by Color Capital, a small venture capital firm investing in consumer-focused companies like The Sill (direct-to-order houseplants) and Salt & Straw (ice cream), CPG is, for now, just a private channel on the messaging app Telegram. But there’s power behind that unassuming facade. CPG looks to marry the world of crypto with the world of consumer goods, shepherding Web3 educators, venture capitalists and entrepreneurs into a single chat room.
Read More: What Are NFTs and How Do They Work?
Jaime Schmidt and Chris Cantino, the wife-and-husband duo behind Color Capital, say the CPG Telegram channel is built around mentorship. “We started with identifying 50 ‘mentors’ who we thought would be nice, big names that people would be excited to chat with in our Telegram,” Schmidt said. The list includes some of Crypto Twitter’s heaviest hitters, from influencers (Jackson Dame), to investors (Jarrod Dicker, Packy McCormick), to do-anything entrepreneurs (Cooper Turley).
The idea was to get people talking about the relationship between crypto and consumer goods. Industry experts would act as go-betweens, helping newcomers negotiate some of Web3?s notoriously high barriers to entry.
The “mentors” were each given two NFTs: one for themselves and one for regifting to a potential new member. There were also 150 more access NFTs designated for the public. Within an hour of the announcement, Cantino said, the public NFTs were sold out.
Things get a little more chaotic once you’re actually in the Telegram group (Cantino airdropped me an NFT so that I could access the channel, which I’ve since returned). Moments after I joined, messages began to whiz by – because CPG is structured as a single feed, these messages flow almost constantly, without a filter. A few members discussed which NFT projects they found the most promising. One toasted National Coffee Day with a celebratory GIF. Two others resolved to discuss a potential business opportunity at a later date. At one point, Cantino circulated a survey meant to “identify networking opportunities within the group.”
Part of the goal, according to Color Capital, was to set CPG apart from token-centric communities in the vein of Bored Ape Yacht Club – the collection of NFT profile pictures (or “PFPs”) that has spawned a nascent media empire. “There are so many PFP projects that have been really extractive of their communities,” Cantino said. “The incentives are aligned for everybody to pump, or encourage each other to hold, or drive up the price.”
It’s not uncommon for NFTs to have a community aspect. Developers are constantly spinning off token-gated chat rooms for their projects (see Bitmap, Loot and and Nouns). But a lot of that value is hypothetical: NFT developers make all sorts of promises about the future of their communities (so-called “road maps” are par for the course with PFP collections), but there are no guarantees.
The difference here, Cantino explained, is that “the value is already baked in.”
“The non-ETH value is that in this group, with all these great people, you could make a relationship that changed your life. You could meet a mentor that invested in your startup. You could meet somebody that just gave you that one piece of advice, and then everything clicked.”
One of the challenges posed by this model is there’s nothing to keep the channel centered on that intersection of Web3 and consumer goods, beyond the meat of the conversation itself. Whether Color Capital succeeds in fostering a community with those shared goals will depend on how successfully Schmidt and Cantino can organize events and marshal group discussions.
Schmidt and Cantino also plan to give members access to something called the “Club CPG Investment Vehicle,” which will let “accredited investors” get an early shot at investing in startups. In that sense, an NFT access key for CPG becomes a direct opportunity to make more money down the line.
This is where speculation comes into play. What is CPG’s take on mentorship really worth? An NFT that comes bundled with intel on potentially lucrative NFT projects and startups probably has more going for it than the sticker price suggests.
Someone with the alias “Uncle Rick,” also known as “icculus.eth,” bought 10 access NFTs on Monday for 0.2 ETH each and is still hanging onto them. My first instinct was that they were looking to flip them for a quick buck, but they told me over Telegram they were considering selling the NFTs directly to “people [they] keep in high regard in the space.” It’s a combination of speculation and curation – sharing the love over the counter.
Cantino insists that the value of membership goes beyond the numbers.
“Paying entry fees for token-gated communities is essentially providing ‘proof of funds,’ he tweeted yesterday, just after our conversation. “You don’t ‘lose’ that money when you buy in – you exchange it for tokens at market value. You are staking funds in exchange for membership that can be sold back later.”
That is an optimistic view; most would probably say that you do, literally, “lose” money when that $7,000 leaves your checking account. And it’s hard not to bristle at the idea of spending that much for access to a chat room. But unlike with a concert ticket, or a subscription to a network of physical spaces (like The Wing), the money isn’t exactly gone after you’ve swapped it for an NFT; it’s just been invested.
As long as people remain interested in CPG, members who want out can just flip their NFTs on the secondary market. Think of it like a venture capital firm exiting its position in a startup after making an initial investment: Whether you make money is a measure of the project’s success.
“Maybe you get hired and you find your dream job, or you just get some great advice,” Cantino said of his plans for the group. “That can be worth so much more than the price of entry.”