Key Insights:
- Following social cues and trends enable traders to determine whether NFT projects are overpriced
- Buying underpriced rarities leads to instant equity creation which allows for a smoother exit strategy while being flexible with positions and selling for smaller losses will help preserve liquidity
- Enforcing royalties into contracts is extremely bullish for creators and could function as a market catalyst
We had the pleasure to sit down with Runn1ngm8n – a prolific NFT trader who prides himself on helping others navigate the space.
Runn1ngm8n’s foray into NFTs began in his early 20s when he started playing online poker. Through 15 years of grinding poker lobbies, he learned how to read people and see situations from opponents’ perspectives – a skill he attributes his NFT trading success to. Like others, he started on the Ethereum blockchain, applying his trade amongst notable NFT projects such as Zed Run and Axie Infinity.
After realizing a friction point with gas fees, he knew Solana was going to be the future. Last October, EasyEatsBodega and Runn1ngm8n cultivated a community in the Nifty Discord server which quickly became one of the premier community trading channels in the Solana ecosystem.
Runn1ngm8n shared in-depth trading insights with us:
1. Keeping up with the current meta
R: You must stay up to date. It is about the fundamentals. The NFT market is in its infancy. If you look at how influencers move the markets, it shows how immature it is. It is maturing, but I’m not going to listen to anyone’s tweets. For technical analysis, I use one-minute candles on SolSniper. In terms of a trading tool, NFT Soloist UI Suite is the best I have used.
For social cues, there are three main indicators - total number of PFPs, mentions on Twitter and Hello Moon. It’s not an exact science, but if a project does start to appear on Twitter, it is an indicator that it may break into a new range. In this situation, a lot of people usually buy, but I will delist in this environment and wait for a new price range to be confirmed unless I think the market is overextending.
2. Let’s talk tactics
R: NFT projects are in different stages. Identify what is the best strategy to trade this particular project. At a basic level, for a big volume mint, you want to trade as it moves. For a steady volume market, you want to trade at a slower pace. NFT markets have layers. Every asset in an NFT market is priced differently, therefore turning it into three dimensions.
I’m big on rarity trading. In theory, you can garner instant equity in a position by buying something underpriced. It helps with risk if your thesis is around capturing equity from undervalued rare NFTs. This strategy also allows for a smooth parachute exit because you have a better NFT. If you set up to capture instant equity you have an advantage over the trader next to you.
3. Staying Agile, Molding Positions and Price Confirmation
R: There is a consensus that conviction plays are morally correct. Conviction plays are when traders hold for extended periods of time and sell for profit in the future. However, I can generate more Solana by being agile and trading the in-between. It is a skill best developed on smaller collections. In high-volume NFT projects, I prefer to trade the next week on that project. In any market, I’ll start looking at price and enter with one or two buys and play within a price range. My goal is to generate $SOL, catch profits and create a buffer or net positive on this project.
If the market loses interest or sentiment changes, my rarity buys will allow me to parachute out and bring my positions back down. You do not want to overexpose yourself. You must be able to scratch losses. It is a lost art. A slight scratch can lead to decapitation. You have to get into the habit of scratching losses as a lot of people incur massive losses holding to zero.
When it comes to price confirmation, a market will range between two different levels. For example, if a project ran from 5 to 7.5 $SOL, it’ll range from 7.2 to 7.8. Once that’s confirmed, I can trade it again. I will take rarity at the bottom of that range, not at the top. What you really want to do is repeatedly generate positions. The less time holding, the less risk to which you are exposed. You do not want a big position that is more difficult to liquidate.
4. Emotional Regulation, Self-Improvement and unwrapping overextension
R: Let’s go back to poker. Education and training is all about plugging leaks in your game. You need to admit to making mistakes. That is how you get better. If you go out there with the mindset that it’s someone else’s fault, you won’t get far. You need to be emotionless – even keel. You need to be able to preserve liquidity when the trade doesn’t feel right. Over time, you won’t even feel the pain.
NFT traders overinvest and overextend. When markets turn negatively, you can take advantage of another trader's emotion. I’ll try to accumulate when it’s the worst possible sentiment.
5. Current and Future State of Solana NFT Market
R: You must understand, zoom out and look at the current situation. Creators are separate entities from traders. It’s a balance between the two parties within our ecosystem. Both parties need to understand each other and realize we need each other to exist.
Collective royalties at 10-12% were too high and led us to a 0% creator royalty event. We need creators to keep innovating and without royalties there is no creation. Currently, there’s a real opportunity where royalties should be enforced into the blockchain contract. The fact that we are addressing it in a bear market has probably left us with less casualties.
I become bullish when it is bearish and vice versa. Lots of projects will not release innovations into a zero royalty environment. Creator royalties will come back soon at a contract level. Once this happens, it will take Solana to the next level. Royalty enforcement and a y00ts reveal will lead to existing projects revealing updated roadmaps. When we see catalysts appear on solid Solana projects, we will see traders flood back in instantly.
