Have Porsche Reversed Their High-Speed NFT Flop?
Porsche’s first foray into Web3 had an uneasy launch, but have they got the project back on track after a difficult start?
FEBRUARY 17, 2023. BEYOND THE MINT. WRITTEN BY JOHN NICHOLS.
Luxurious let down, or on the road to redemption?
Porsche, the luxury Germany sports car brand, made a splash in the NFT community with the announcement of a collection celebrating their iconic 911 sports car. Initial signs were positive, but after the announcement of a 0.911 ETH mint price, popular sentiment took a nosedive, leading to Porsche issuing a hard stop with only 16% of the planned supply minted.
Since then, the noise has died down significantly. Have Porsche quietly been turning their NFT project around? Let’s analyse the mistakes made, the caveats to apply in hindsight, and where the project sits today.
Mistake #1: Mint Price
Whilst $1,500 for an exclusive, limited-edition item from a luxury household name might not sound too outrageous, Porsche significantly underestimated how the mass market would react.
In a world of sub-0.5 ETH mint prices being the norm, Porsche’s 0.911 ETH mint price – a wink and a nod as subtle as a brick through a window – was ridiculed from the start. For comparison, luxury fashion house Prada holds monthly phygital drops – where holders can acquire exclusive, high-end garments – for around 50% of Porsche’s mint price.
The timing couldn’t have been worse. With the bear market in full swing, and Fear & Greed indexes firmly in the red, the community didn’t mince their words, with cries of “cash grab” aplenty and the mocking memes in full flow.
Or sell the collection out at 0.0911 ETH and build a community within the space that wants to support and rep the Porsche brand, without being to afford the car.
The game is free on Twitter, just ask for help if you need it.
— Farokh (@farokh) January 24, 2023
Caveat #1: …Mint Price
Holders of the now 2,363 NFT Porsche community have recently been made aware of utility which – to petrolhead holders – could more than justify the 0.911 ETH mint price.
Alongside cosmetic customisation options for the NFTs, and purported limited-edition branded merch, a recent holder AMA revealed an IRL event roadmap, with S-tier motorsport experiences, exclusive events at iconic race circuits, and unique opportunities at Porsche Experience Centers around the world planned throughout 2023. Why would they want to be so secretive about this top-draw utility? Your guess is as good as mine!
Furthermore, for all the ridicule the 0.911 ETH mint price was given, aside from a very brief period post-mint, the floor price has hovered at around 2 ETH. It appears Porsche are adding value to web3, rather than taking it away.
@eth_porsche laid out their road map for NFT holders #PorschePioneers #porscheNFT. Amazing IRL benefits like PECs and races!
— RadMatt (@RadMatt_eth) February 16, 2023
Mistake #2: Lack of Communication
Porsche has taken a notoriously non-Web3 approach to communication around the project, both pre and post-mint.
Remember the hard-stop on minting? Their tweet didn’t coincide with an immediate pause, causing widespread confusion and further irritating the already riled-up community.
Crazy sequence of events w/ @eth_porsche
– Tweet on supply cut & stopping mint
– FP swells by .3 ETH
– Everyone realizes mint is still open
– Everyone mints #NFTs & sell immediately
– FP returns to mint price
Winners?
– Porsche for selling ~160 NFTs in <1 hour
– Shrewd traders pic.twitter.com/p1Kch1OrLH— metaversatile.eth (@metaversatile_) January 24, 2023
Even today, with key information, roadmaps and alpha afforded exclusively to holders, and public information both low in substance and offered far too infrequently, it’s not that the project doesn’t have utility (see Caveat #1) – it’s that it’s woefully communicated.
Looking back to the announcement of a 0.911 ETH mint price, better communication on utility could have – and most likely would have – taken much of the sting out of the seemingly high price. Alas, hindsight is 20/20.
for the price of a porsche nft i could buy a '96 civic which has way more utility pic.twitter.com/N8pDVfdkSn
— camol (@camolNFT) January 24, 2023
Caveat #2: Creating Exclusivity
Whilst true web3 degens might prefer transparency, openness and a degree of accessibility for all projects, Porsche have achieved something of a rarity in the space – a community where being a holder really does feel like you’re part of an exclusive club.
Updates are given almost exclusively to holders and holders alone via Porsche’s Discord, with details rarely leaking to the outside world. It might not feel very faithful to web3, but it has created a tight-knit, secret society-esque feeling.
For a luxury brand steeped in history, brand recognition and motorsport heritage, why not make an exclusive club to cater to your most loyal fans?
Wait. PORSCHΞ is actually bringing holders together at an event over the next months? 👀 more info on our Discord.
— PORSCHΞ (@eth_porsche) February 16, 2023
Mistake #3: No Community Engagement
Whether intentionally or not, what communication we do get from Porsche comes across as overtly headstrong, and wholly detracted from how the wider community feels.
Porsche didn’t acknowledge the backlash to the mint price – the biggest in a long list of queries and questions – at the time, leading to potential buyers feeling unsupported, unloved and unimportant, reinforcing the common belief that this was nothing more than a cash grab.
It’s difficult to judge how impactful this was to the ultimate number of NFTs minted, but in an industry where community is everything, being perceived as cold and non-cooperative won’t do you any favours.
Porsche’s #NFT launch looking like straight trash right now.
No attempt to engage with the community at all.— David Gokhshtein (@davidgokhshtein) January 23, 2023
Caveat #3: Brand Management
When Porsche announced their NFT project, many took it to be another example of a luxury name creating an accessible way for the masses to experience the brand. It’s very likely this wasn’t Porsche’s intention.
Yes, the status quo up now has been to create a low-cost mint, sell out, then grow from modest foundations, but with Porsche’s drop – and I’m sure many drops from projects and brands in future – that assumption will be challenged.
I have to applaud Porsche for taking the risk to be different. Instead of using NFTs to appeal to a wider audience, they’ve used NFTs to rejuvenate and galvanise their existing fanbase.
Rather than insisting Porsche were just ignorant (which I personally don’t believe is the case), it was clear a high mint price would reduce the number minted. Do I think they sold less than intended? Yes – but they also collected more than 2,000 ETH from their initial mint. There’s not many projects out there that can lay claim to similar results.
Bonus: Wait, You Can Refund NFTs Now?
Before we get into where the project sits today, Porsche’s NFT endeavours kicked-off a crucially important, but much less discussed, debate in web3.
You see, before minting a Porsche NFT, buyers had to tick two checkboxes. Many purchasers skimmed over the fine print – after all, who has time to sift through pages of legal jargon?
Enter @darkp0rt, who decided to take a closer look. What he found might have major implications on the future of the NFT industry…
Something caught my eye on the Porsche NFT mint page that might just change the entire game for everyone.
And no one is talking about it… 👇🧵 pic.twitter.com/Vd4Mzidvhk— Paul | Top Dog Studios (@darkp0rt) January 25, 2023
The first checkbox is standard fare, but the second checkbox required buyers to waive their “right of withdrawal”, a consumer protection law in many countries (particularly the UK and the EU) that grants buyers the right to a full refund within 14 days of making an online purchase.
Although no current precedent exists, some believe that NFTs could soon fall under this umbrella.
@darkp0rt decided to test this out. He reached out to Yuga Labs to see if he could get a refund on his Otherdeeds mint, which he paid $9,000 for but was worth only $2,200 at the time. Yuga Labs initially rebuffed his request, before supposedly forwarding the request to their legal team, which is where the situation currently stands.
I'll update this thread if it progresses to anywhere interesting.
As expected, first-level support said "no" stating that there are no refunds under their Terms of Service.
I asked to escalate to their legal team, which they did. pic.twitter.com/3UzMhxMWJ0— Paul | Top Dog Studios (@darkp0rt) January 26, 2023
An important aspect of UK consumer protection legislation is that if the seller fails to inform the buyer of their right to a refund, the refund period is automatically extended to 12 months. This potentially means that UK-based buyers could get a refund up to a year after purchasing an NFT.
The discussion surrounding NFTs and consumer rights is just getting started. It’ll be fascinating to see how it plays out – though only when a precedent is set in court will we get our answer. When that happens, and whatever the outcome, it’ll be a landmark moment in the history of NFTs
But who needs a refund when you’re living the Porsche lifestyle, right?
How Are Porsche NFTs Doing Today?
In spite of the backlash, furious debate and purported “mistakes”, it’s hard to argue that Porsche’s NFT project hasn’t been a success to date – and the future looks brighter than ever.
Utility outvalues the mint price, the secondary market is healthy and stable, and Porsche’s NFT holders appear excited, happy and appreciative to be part of an exclusive club.
As the market continues to grow and evolve, it’ll be fascinating to see both how Porsche’s NFT project develops from here, and if any of their contemporaries follow their example.
The German automotive marquee have proven that there’s more than one way to succeed in NFTs. It might not have been what everyone expected, and they may have had swathes of web3 degens up in arms, but let me be absolutely clear: their approach, for them, has worked.
Porsche took a big risk. It’s paid off.
