How to Market and Sell NFTs to Investors

Ishan Pandey: Hi Elan Neiger, welcome to our series "Behind the Startup." Please tell us about yourself and the story behind Levana?

Elan Neiger: Hi Ishan, thanks for having me. I got into crypto in early 2017 as an investor. It was clear to me then that crypto was not going away, and after working in other industries all my life, a few months ago, I had the opportunity to join Levana. Levana is a platform for generating leverage on any asset. It is also an acronym; Levana stands for Leverage Any Asset. We're a financial tool for traders to increase their exposure to tradable assets.

The core product is a leveraged synthetic asset trading platform for perpetual swaps. That's a long way of saying we're building the most advanced decentralized exchange in the Terra ecosystem. We have an incredibly experienced and diverse team, investors and an amazing community of excited supporters. At the same time, simply building an exchange is boring. Adventure and magic make life fun. The team is composed of sci-fi, fantasy and adventure geeks, so we decided to trailblaze the Terra NFT space.

We established an entire world of backstory and lore around dragons (leverage), dragon riders (leverage traders), and the community of dragon keepers who enable the platform. We launched last month with our unique evolutionary NFTs in a 44 hour Meteor Shower launch, and by the end, we raised roughly 4M. Those funds are being used to create a trading pool for the first product we are bringing to market, Levana Leveraged Index tokens (LLI's), the first of which is Luna2X. Since our NFT launch, our NFTs have become the largest NFT project on Terra, with the largest number of wallets and the highest trading volume for weeks running.

Ishan Pandey: What are your views on NFTs and how can NFTs be leveraged in different industries? Further, how do you market NFTs?

Elan Neiger: We love NFTs. So much can be done with them, so many ways to create touchpoints that appeal to a massive audience. We were tired of "yet another PFP" and projects that build up to a minting event and disappear almost immediately after. When we first brainstormed about designing a new approach to distributed NFTs, we started by looking at all the things that have become a standard in the space that presented significant detractions from healthy community building:

● Whitelists

● The Good Morning Army

● Discord shilling

● Fake users to boost up numbers (on Telegram, Twitter and Discord)

We wanted to avoid these aspects, so we decided to start at square one and invent a completely new distribution method that would be fun and open to anyone. That became the basis for how we designed and built our project and our initial NFT Meteor Shower; essentially a silent auction for different tiered meteors, with a chance for a dragon egg inside. The Meteors, dragon eggs, and power dust all have a role to play in our metaverse gaming and world-building, which we are currently developing with several game studios. We also wrote a recap of our NFT event that explains more.

Ishan Pandey: Please tell us a little bit about the Levana protocol and how it works? Further, please tell us why did you choose Terra as the native blockchain for your project?

Elan Neiger: On a high level, Levana is a Delphi incubated protocol led by a team of crypto veterans who understood that leverage trading represents a huge opportunity for the crypto space. The protocol leverages tokens and Perps are positioned to capture significant market share. It is also a DAO, fully community governed.

There doesn't yet exist a way to efficiently and cost-effectively gain exposure in either a long or short position to generalized assets - that is, assets that do not necessarily involve custody.

The market for derivatives is huge - the spot market is 80-90 trillion, and the derivatives market is 40x-200 the size. The protocol enables a user to no longer simply be exposed to the markets based on their current financial standing; your only limitation to how successful you can be in a trading market is just by your level of confidence, and that's really a game-changer.

Why build on Terra? We feel that Ethereum has been taken over by the dominance of centralized companies like Tether and Circle. Collateralized stablecoins like DAI are also backed by centralized coins; there is a lack of capital efficiency.

Stablecoins on Ethereum like Frax and Empty Set have no economic incentive to sustain them. We were also concerned about the future of DeFi; it needed a reset from Ethereum. For example, our team theorized how to build an algorithmic coin from scratch, and realized that Do Kwon had already built it three years ago. From there, we were easily converted into LUNAtics. Long story short, we felt that Terra was the most undervalued ecosystem.

Ishan Pandey: The derivatives market is one area in the realm of DeFi which has not yet been tapped into. What prospects does the derivatives market hold for the future DeFi? Further, what are the regulations around it?

Elan Neiger: Derivatives, in simple terms, are contracts that derive their value from underlying assets. These derivatives can come in many forms, including options, futures, and swaps. In traditional finance, these different types of derivatives have been used for many reasons, such as hedging and speculating.

While the derivatives market is clearly larger than the spot market in TradFi and CeFi, this has yet to translate into DeFi today. Currently, the derivatives market in DeFi is made up of a few players and it's far smaller compared to the spot market. If DeFi is to follow the same path as TradFi and CeFi where the derivative market becomes much larger than the spot, then this presents a tremendous opportunity for any derivatives protocols to fill that gap.

Ishan Pandey: Could you share with us your thoughts on the present condition of crypto's cybersecurity? What needs to be done to dispel the widespread belief that investing in or holding digital assets is a security and investment risk?

Elan Neiger: A few things need improvement - the first example is insurance. How do people lose money? They lose money because their account gets hacked on an exchange, which is often done by SIM swapping -or social engineering attacks - so that needs better security on exchange's parts and better education for new people to the crypto space. If you go to a website and it tells you to type in your seed phrase, do not do it! Never type in your seed phrase online.

Next is investment risk: people are investing in highly volatile early-stage businesses with very little censorship, so 99% of projects are going to be low-quality money grabs. I'm not sure if there's any way to shore up security on this besides government regulation, which usually throws the baby out with the bathwater. DeFi now is like the early internet - most projects are fluff, but over time, the quality will last and the bad ones will fade away.

Ishan Pandey: The cryptocurrency ecosystem is evolving toward a cleaner, more environmentally friendly future. How will this impact the intense debate surrounding Bitcoin and its carbon footprint?

Elan Neiger: Bitcoin offers the most environmentally friendly way to convert excess electricity and store excess electricity value. Power grids that previously were burning fossil fuels and throwing away extra electricity now can convert that into BTC, which has a net positive impact on humanity.

Proof of stake coins like Luna does offer a less power-hungry solution. And a combination of these two approaches focusing on renewable energy and optimization of existing energy creators for things like BTC + having low energy solutions will be a catalyst for an environmentally friendly future.

Ishan Pandey: In the domain of blockchain technology, decentralised finance and non-fungible tokens are now the two most prominent implementations. How can these two trends be effectively merged?

Elan Neiger: Non-fungible tokens create a huge opportunity to grow an engaged community. Defi requires an engaged community to be effective. We're early on in the experiments of overlapping these industries, but the value drivers are fairly obvious when you frame it this way: NFT's are a gateway to crypto for the average no coiner, and they help build an engaged community. - Defi's challenge is building and creating this strong community. The strong synergy between NFTs and DeFi is pretty obvious when you look at it through that lens.

Ishan Pandey: Despite fears of it being a fad, NFT sales volume increased by about 200 percent in the first half of 2021 especially compared to the first half of 2020. What has led to this sudden boom?

Elan Neiger: Two main things: Everyone is sitting on massive gains, so they spend it on NFTs. And two, people are now entering the crypto markets specifically to get into NFT collectables.

Ishan Pandey: What are your views on the rising gas fees on Ethereum? Further, what problems are projects facing due to it?

Elan Neiger: It is becoming harder and harder to experiment or innovate on Ethereum due to the fees, so many new products are launching on L2s or other chains, which are more approachable to the retail market.

Ishan Pandey: What future trends are we going to see in the DeFi and NFT industry?

Elan Neiger: I think that we will see Play 2 Earn become mainstream, which is the natural low-hanging fruit of finance and collectibles merging. And from that adoption, there will be a cycle around investments, innovation, and awareness that will bring new ideas and new entrepreneurs to the space.

Disclaimer: The purpose of this article is to remove informational asymmetry existing today in our digital markets by performing due diligence, asking the right questions, and equipping readers with better opinions to make informed decisions.