Hashmasks in the Dark Forest, or why DeFi alphas will love farming Name Changing Tokens.

Hashmasks are still keeping me awake at night, here’s why…

The purpose of this article is to briefly explain why Hashmasks will inevitably attract the keenest players in the DeFi world. Having honed their craft in the cut throat world of trading on decentralized exchanges—arbitrage, front running bots, leverage and a whole plethora of secret tricks—these well capitalized whales will find profit in applying their crypto-native mindset and DeFi skillset to trading Hashmasks. Their presence will increase the value of Hashmasks at the same time as it influences how the Hashmasks game is played.

This article is for an intermediate audience that understands the basics of Hashmasks. If you’re just getting started with Hashmasks, please read my introductory article first:

Hashmasks could decenter the art world, upend DeFi, and trigger a dramatic transfer of wealth.

With that background in place, let’s now proceed on a speculative mind journey. I’m going to move quickly and assume that the reader has a relatively sophisticated understanding of Ethereum.

The Tokenomics of Hashmasks: Floor and Ceiling

Okay, let’s begin with the tokenomics of Hashmasks, an NFT on the Ethereum blockchain. There are many different ways to value Hashmasks.

Thus far, the dominant method has been to look at them as individual artworks, judge their rarity and price them differently on the basis of explicit and hidden traits. This is an approach more typical of the art world and collectors who prize uniqueness. Right now, the ceiling price of Hashmasks is roughly $650,000, the highest price paid for a Hashmask.

There is another way to value Hashmasks, however, and that is to look instead at the minimum price of the most “common” Hashmask. This is the floor price and it is determined by the minimum price on OpenSea which should, ideally, be nearly equivalent to the price of…