In 2021, at the height of the $NFT mania, macroeconomist Tascha Che (Tascha Labs) announced plans to buy a $5,000 diamond, create an $NFT from it, and then smash the precious stone to pieces.
All of this was meant to prove that physical objects could be destroyed, but their digital versions could forever preserve a representation of value. This idea was criticized by most cryptocurrency and $NFT communities.
Nevertheless, in August 2021, Tascha bought a 1.3-carat diamond online and began working on ways to destroy it. At first, she wanted to hit the diamond with a hammer, but, of course, she did not succeed. In the end, she managed to find a mechanic who selected the right tool and split the stone into pieces.
The next step was to create an $NFT on a marketplace so people could bid on it. Surprisingly, fortune smiled upon her. In September 2021, one user purchased the $NFT for 5.5 $ETH, which at that time was valued at $17,000—more than three times the price Che paid for the diamond.
Che actively posted about how her idea was correct, though in reality this sale did not prove that all digitized assets retain their value despite the destruction of the physical prototype.
After acquiring the $NFT, decentralized finance advocate and investor Ivan Zhang owned it until October 2025, and sold the token for 11 $ETH or $43,000. Thus, the value of the destroyed diamond $NFT nearly tripled, while prices for one-carat diamonds over the same period fell by almost 40%.
At the same time, Zhang wrote that diamond prices would continue to fall, as the production of synthetic diamonds becomes easier and retail demand declines.
Accordingly, if the $NFT were meant to preserve the value of the destroyed physical commodity, one would expect its value to decline correspondingly.
Che's experiment convincingly proved that $NFT prices are driven by hype, not by economic fundamentals.
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