Letter 24: Infinite Regret
it hits us from every direction, let's not let it consume us
I recently posted a tweet which seems to have resonated with an enormous part of the NFT community. Here it is:
The idea being that even if we make a lot of money on a trade, if we could have made more, we tend not to be thrilled with the objectively excellent outcome.
This leads me to thinking about a bigger idea that has been rolling around in my head for a few months — that the NFT space is filled with infinite regret which comes at you from every direction.
Decide not to mint something which goes on to moon? Regret.
Decide to mint something which is a rug pull? Regret.
Decide to sell something at any price other than the absolute peak? Regret.
Decide to buy something at any price other than the absolute dip? Regret.
Miss out on a mintlist spot because you saw a tweet 3 seconds too late? Regret.
Miss out on claiming a free airdrop worth thousands because you weren’t in the space 3 months ago? Regret.
Miss out on claiming a free airdrop worth thousands because you didn’t use the right protocol 3 months ago? Regret.
Set your gas fees too low in a gas war and miss minting a hyped project that moons? Regret.
Set your gas fee too high and end up paying too much gas for a project that tanks? Regret.
Didn’t research Solana NFTs before they popped off? Tezos? Arbitrum? Regret.
Launched a project which didn’t sell out and wish you did 100 things differently? Regret.
I’ve gone on a lot, I could go on a lot longer. There is infinite regret in this space.
I’m going to talk about why this might be a good thing.
Infinite Regret = Infinite Opportunities
It might be difficult to see at times, especially if you’re not currently a benefactor of these — but there is no shortage of incredible, life changing opportunities in the NFT space.
Yeah it sucks if you aren’t minting projects that 100x, and are seeing everyone around you doing that. However the fact that there are projects returning such insane profits, is a very, very, very good thing. It means you are in roughly the right place, at roughly the right time.
This is a numbers game. There is a huge amount of luck involved when it comes to investing in NFTs. Anyone that says otherwise is lying. There’s also a significant element of skill, and that is what we should focus on. Improving our ability to evaluate projects, to research them, to know what is likely to succeed and what isn’t, and then placing our bets accordingly — this is the way.
Nobody can know for sure what projects will pop off. Nobody can know whether a project that has 10x’d will then go on to 100x, or whether it might crash to 0. The best we can do is make educated guesses, over and over and over again.
As time goes on, if you do this, the odds will slant in your favour. This still does not guarantee success, but it guarantees you have a better chance of success.
I’ve said this so many times before but it’s worth repeating so many more times, because I truly believe it: the only thing you need to do to thrive in this space, is to survive this space.
If you go all in and spend your entire bankroll and rent money on a couple of projects that turn to dust, not only are you out that money, but you are out the opportunity cost of not being able to take advantage of all the future opportunities. If you go busto, it’s incredibly hard to recover — not only financially but also emotionally.
This is why the #1 piece of advice I always give to newcomers to this space is to be patient. There is no shortage of opportunities and there is not going to be a shortage of opportunities, not any time soon at least. Don’t feel the need to rush in and FOMO into whatever hot project your favourite neighbourhood influencer is talking about, or what your friends are talking about. Take the time to really learn and understand this space, and the projects in it, and craft a bankroll management strategy that ensures your longevity (let alone your sanity).
Sure, if you have a steady job and a tonne of disposable income and are okay losing a few thousand dollars by minting random projects then by all means — go ahead. Many of us cut our teeth this way, but by and large, we all lost thousands of dollars in the learning process. It was basically the cost of tuition. It’s a great learning experience, but it’s not feasible for most people. As it is, transacting on the Ethereum Mainnet is prohibitively expensive for 99% of the world or something. Consider other blockchains, and consider being patient and biding your time and money before jumping in and parting with your hard earned dollarydoos.
Align your emotions with your actions, not with the outcomes
I was a professional poker player for 15 years. For the most part, for most of my career the difference between the good players and the great players was not technical skill. It was psychological skill and mental fortitude. It was the ability to not tilt, to not play poorly, to not let your emotions rule your decision making. This is not an easy thing to do.
At some point in my career I received “mental game coaching”. I learned a lot, but probably the single greatest takeaway which I still carry with me to this day is to try to align my emotions with my actions, and not the outcomes of my actions. This is because my actions are within my control, whatever happens beyond that is not.
To continue the poker analogy: the goal is not to be happy when you make money and upset when you lose money. The goal is to be happy when you play well and upset when you play poorly. The goal is to be able to lose a tonne of money but feel fantastic knowing that you made good decisions and knowing that in the long run, if you continue to make good decisions, you are likely to come out ahead. You should also be able to make a tonne of money and not feel like you’re a genius and did everything right — if you played poorly, you should perhaps be a little upset, and critical, and think about what you could do differently next time, even if you came away a big winner.
I think about this a lot in the NFT space. I’ll share a few of my biggest “mistakes”, and how I feel about them all, and what I might have learned.
In June 2021 I sold three Fidenzas for under 1 eth each. For reference, the current floor for a Fidenza is about 70 eth and I think it hit around 200 eth at one point. I don’t feel bad. At the time, it was a huge win for me to flip these for a small-medium profit. At the time, the Art Blocks market was in a bearish phase and I couldn’t responsibly have 2-3 eth locked up in generative art NFTs (despite how much I loved them), without having a strong expectation that they would go up in price. I don't think I could have reasonably predicted the meteoric price appreciation they saw. I am content with my decisions.
Last week I sold a few World of Women for 2.75ish eth each. Within a few days the floor was (and still is) around 8 eth. I feel pretty good about this decision too. Of course I felt the pangs of regret initially, but upon reflection I felt like the market was at a point where it could turn and come crashing down quite quickly, and I didn’t necessarily have the conviction in WoW that I do in many other projects. I wanted to lock in some (still significant) profits, and I didn’t sell all my WoW either — so I still have exposure to the project.
In April or May 2021 I minted 150 Metabots. These were minting at 0.01 each. They looked cute enough, and cheap enough. The market was pretty hot. 1.5 eth for me was a decent amount of money, this was the largest investment I had made in any NFT project at the time. It was a rug pull. That sucked. I was blinded by greed — thinking wow imagine if these go to even 0.05, I would make so much money! I didn’t do any research into the project, I didn’t know the team. I just aped in, and I paid the price. I feel bad about my decision to ape in, but I at least learned a valuable lesson from it: to freaking stop investing in anon teams without a very good reason.
About a month ago I sold two Doodles for 3.75 eth each. The floor is now 11 eth. I think this was a mistake, and I don’t feel great about it — not because the price has appreciated, but because I didn’t have a great reason for selling at the time. I didn’t need the eth, and I have a strong conviction in the team and project and community, so I should have held. It honestly might have been a “boredom” sale — after enough mindless scrolling through my opensea profile I was like “might as well get a few eth here”. I didn’t think about it enough.
A couple of weeks ago I bought a FlyFish Club Omakase Membership on OpenSea for 6.25 eth. The floor is currently 17 eth. I don’t feel great; because I think I should have bought two or three. I don’t feel great because I had a lot of conviction in this play, but only partially followed through with it. The reason I bought was because I saw how few there were, and how few there were listed, and I believed there would be a real supply shock as more people found out about the project and wanted in on it. I also trust in Gary to deliver value to those that believe in him and his projects. I didn’t have a great reason for not buying more than one — I am a big proponent for generally buying multiple NFTs if I think it’s a good investment, so that if/when prices go up, I can sell at least one off to cover the initial costs. I think perhaps my brain was anchored to thinking my bankroll was where it was 6 months ago, and not where it is now. I thought “woah 6 eth is so much money” (which it absolutely is), but I was thinking emotionally not considering the % of my bankroll/networth that 6 eth is now. I think I made a mistake, and have learned something — despite this mistake making me a significant amount of money (on paper).
In May 2021, I stubbornly refused to acknowledge the BAYC as a project to look at. The reason for this was that in March I had aped in to another ape project, “Ape Only”, and was emotionally (and financially) invested into that. So when I saw the BAYC I simply saw them as a competitor and was emotionally against them from the get-go. This was not based on any facts or logic at all, it was pure emotion. Had I taken the time to really look at the project — to check out their website, to understand what the commercial rights meant, to spend some time in the community — I might have bought many more apes than I ended up with. Obviously the fact that I have any, and got them at under 1 eth, means I was still obscenely fortunate. It was still very much a ‘right place at the right time’ thing, and the end outcome has been fantastic. Perhaps if I bought more earlier, I would have flipped them, and not held the 3 I have all the way to now. Yet despite the end result being great, I can look back and recognise that I was not thinking about the project rationally and I initially dismissed it due to emotions.
These are seven experiences, I could write about 700 more. Every project that I bought into, or passed over, presents opportunities to learn from. Make money or lose money, or make ‘not as much as you could have’, or ‘lose more than you should have’, these are things that are going to happen over and over and over and over and over again. These are things that are not really in our control. The decisions we make, and our reactions to the outcomes, these are within our control.
It’s worth remembering that most people don’t talk about the dark side of this space. It might seem to be all GM, WAGMI, LOVE LOVE LOVE, MOON MOON MOON, etc — it really isn’t. We’re still largely communicating via social media, and we all know that people tend to show off their best side and hide their worst. So we end up comparing our worsts to other people’s bests, and thinking we’re doing something wrong and/or that there’s something wrong with us. We end up feeling the depths of infinite regret.
There’s nothing wrong with you, or me. Know that we all go through feeling down and out about ourselves. Know that we all make mistakes, sometimes huge ones, and sometimes we don’t learn from them, and make the same mistakes again. The goal is not to never make mistakes — that’s impossible. The goal is actually quite simple.
The goal is to be better today than you were yesterday, and to be better tomorrow still. It is utterly useless to compare yourself to anyone other than your previous self. It is utterly useless to dwell on things outside of your control. It is very hard not to, but it is useless.
Life isn’t easy, it’s not meant to be easy. The NFT space moves at warp speed and amplifies everything. Days feel like weeks, weeks like months, months like years, and a year is a decade. It can be stressful. It can take its toll. It can be all consuming. Your job is to not be consumed by it; to not fall so deep into a pit that you can’t find your way out, and if you do fall in, to ask for help. There is no shame in asking for help, or for taking a break, or for quitting. I’m reminded of this story from The West Wing (great show):
If you find yourself in a hole, reach out to a friend. We’re largely a friendly bunch in this web3 NFT space and we all gotta support one another. Investing in NFTs is super interesting in that it’s simultaneously competitive while also being collaborative. Let’s lean into the collaborative side of things and try not to focus on the competitive side. Let’s also break any stigmas around talking about the dark side of NFTs. This is a mentally draining and demanding space, and it can really amplify any mental health difficulties a person might be going through (not to mention creating new ones). Let’s encourage open dialogue with a focus on bettering ourselves, and one another. Not to wallow in self pity (the most useless thing in the world), but to seek support and companionship, and help, and advice, and to navigate this insane space together and not alone.
So much of this space revolves around money. That’s cool. Money is fun, it’s exciting. It lets us pay off debt. It lets us put food on the table and a roof over our heads. It lets us buy fun things. It lets us partake in more experience. It opens new doors and opportunities to be able to make more money. Making money can be addictive. It’s like a game. It’s fun when number go up.
Some things are more important than money. Most things are more important than money. While the space is inevitably going to continue to revolve around money for a very long time, we should try our best to not have our personal lives also revolve around money. I know this is easy for me to say from my ivory tower, but I was not always wealthy. I am fortunate to have never been in poverty, but I have experienced most of the rest of the spectrum. Another comma, another zero, they do not grant fulfillment or true happiness.
Family, friends, health, reputation. Living a good and virtuous life, being a good person, doing good things. Leaving the world a better place than you found it. This, to me, is what true wealth means. NFTs are great, money is great, but never forget that at the end of the day
we are all stardust.
Good to see you applying the teachers of stoics into the NFT space and for yourself. Momento Mori brother.
They'd laugh at you on Wall St. And that's great. Fuck 'em. We need you here.