I’m pretty sure you’ve seen the word “FUD” thrown around Twitter here and there lately. You’re also probably wondering what the hell is fud anyway- is it even a word? Why are people using it in so many contexts- is fudding a verb or what? I also bet you went to Google and asked “ What is fud?” and it gave you “ Fear, Uncertainty, Doubt”. Let me guess, you’re still a little confused as to how that applies to NFT culture.
If only there was a guide to get you through the fast-paced culture of crypto Twitter.
Fear no more as this article will remove all the uncertainty and won’t leave you in doubt. Ok… too many puns I shouldn’t.
What is FUD?
FUD is an acronym for three words: Fear, Uncertainty, and Doubt. Acronyms are very common in the crypto world, actually, they are the bread and butter of NFT culture. Cool, but what is FUD? This word is used to describe the overwhelming emotions of being skeptical, afraid, and panicking.
In the English language, the word fud actually exists and it means “an old-fashioned, unimaginative, or pompous person” but this has nothing to do with the acronym – it can get mixed up.
Fun fact, the word fud is older than you might imagine! It dates back to the 1970s when computer architect Gene Amdahl first used it to describe skepticism over IBM company’s manipulative sales method.
FUD, RUG, FOMO Differences
FUD sounds similar to our other favorite acronym FOMO, which means fear of missing out. They’re not the same but rather almost opposites. FOMO makes you rush into things in fear of missing out on a big win or event, while FUD makes you fear losing so you slow down – or get rid of the thing that’s making you uncertain. Now a RUG is not an acronym, it’s short for “rug pull” a word coined to describe a certain kind of scam in the NFT space. FUD is not a rug, but the existence of rug-pulls causes FUD, get it?
How Did FUD Make It to NFT Culture?
When did FUD make it into the Crypto and NFT lingo? Roughly speaking, in the crypto space, we can recall its surfacing in late December of 2021, when cryptocurrency mining was banned in several countries. That’s when Bitcoin holders faced a wave of fear, uncertainty, and doubt all at once of whether Bitcoin is gonna survive this hit. Then the many scams and wavering project founders paved the way for FUD emotions into NFT culture, and it just caught on.
What is the Context of FUD?
FUD is most often associated with emotions, a concentrated dose of panic emotions. It’s like a magic word for internal hysteria over something. What is the sentiment of FUD? Mostly negative and is often used in these contexts:
- Article Titles and click-baits
- Twitter feed and Discord servers.
However FUD could also be used in a good context, it’s a motivator to double-check before doing anything reckless. Fear, uncertainty, and doubt – to a healthy extent- can lead to good decisions.
What Causes FUD?
The crypto and NFT space moves really fast. We have people GMing in the middle of the night, and the sun never sets. Therefore, literally, everything in this context can trigger FUD. However, here’s a rundown of the issues that keep most spiraling into a loop of fear, uncertainty, and doubt.
1- Scams and Vulnerabilities
We already established in the beginning that rugpulls and scams cause a serious amount of FUD. Imagine investing in a project that seemed legit, for it to end up a scam that rids you of your hard-earned money. Given all the Scams, and hacks, it’s totally justifiable to be skeptical and FUDiing in the NFT/Crypto space.
2- Absence of Regulation for Blockchain
The whole blockchain is still rather unregulated, meaning there are no set laws to govern acts in the crypto space. This causes major FUD among people because they get phished, hacked, or scammed and have no way to reverse it. NFT God and Kevin Rose got hacked, and couldn’t do anything about it.
3- Lack of Engagement from NFT Project Founders
In the theme of scams and rugs, whenever an NFT project stops interacting with its holders FUD happens. Now more than ever, given the mayhem everyone’s going through after the Silicon Valley Collapse. We witnessed this specifically with projects like Doodles, CloneX, and Moonbirds where FUDing may be the reason they lose their bluechip NFT status!
The Effect of FUD
If you’re gonna be FUDing around, it’s gonna have consequences. The effect is usually the falling of prices and NFT projects.
Prices of cryptocurrencies will fall apart when investors start to FUD and panic sell. For example, if Bitcoin’s price suddenly drops below its previous nominal value, it will signal a bear market and crypto enthusiasts will refrain from buying into it. Investors start to become fearful that their capital is going to be lost, they’ll feel uncertain about where Bitcoin will go next and, they may even doubt it will ever recover. They may choose to liquidate their assets which results in low liquidity and trading volumes, hence slowing down cryptocurrency exchanges and trading.
The same exact thing applies to NFT collections, where we got holders selling their NFTs on the floor and plummeting the floor price drastically. Community FUD is taking down Bluechip project floor prices to the gutter in 2023:
Doodles: Fell from FP of 8 ETH → 3.4 ETH
CloneX: Fell from FP of 6.2 ETH → 3.25 ETH
Moonbirds: Fell from FP of 9.4 → 3.67 ETH
Don’t Let Them Control You
So you made it this far, you’re either in a serious state of FUD or just curious. Is there a solution to FUD? Unfortunately, we can not because we are talking about an intangible notion of emotions. Who here can have 100% control over their feelings? FUD is a collection of mental states that can influence people’s thinking in a variety of situations. It is also used to manipulate people’s behavior the same way FOMO does. Just be careful.
FUDing can be great at some point since it makes you think twice before investing in something. But, there could also be times when this could be extremely damaging. Here are some tips to get you through FUD:
- Remembering that the web3 space is extremely volatile.
- Don’t get your expectations too high, it can save you from devastation.
- Never invest in anything you aren’t comfortable losing.
- Always keep facts separated from feelings.
- Double-check the facts against rumors.
- Don’t criticize too harshly and don’t be persuaded too easily. Find a sweet spot.
If you’re curious about more acronyms in the Web3 space, check out our ultimate web3 glossary. Chainwticher always got you covered!