NFT Weekly Recap - May Week2
Hope you all had a great weekend. Welcome to this week's NFT market recap, covering basic stats and notable news with my observations. If there is anything else you'd like to see in the recap, please let me know. DMs are open.
As usual, let's begin with numbers.
Otherdeed public sale is a historical event to be remembered for a long time. Total OpenSea trading volume (as measured in ETH) pumped by 58% this week. It is very easy to spot the increase in trading volume from the bar chart. The daily volume of 191,152 ETH on May 1st is the new all-time-high for OpenSea.
However, the number of daily active traders decreased by 10% last week. My theory is that, because most projects fell in price, NFT flippers became less interested in the market and less active. Many flippers also spent their last bit of ETH on Otherdeeds. Due to the lack of liquidity in the market, prices might decline even further, bringing the trader count down to below 50,000. If that happens, we are back to early March levels.
In terms of floor price, Doodles and Something Token are the only winners. Something Token is new and thus is enjoying its hype at launch. Doodles benefitted from the news that it got a new CEO. Everything else is red. For example, MAYC fell from 40 ETH to 22 ETH and Moonbirds fell from 35 ETH to 25.5 ETH. With all the hype dying down and people leaving the playground, it might be the best time to accumulate some blue-chips.
Yuga Labs Otherside Land Sale
Otherside is a gamified, interoperable metaverse currently under development by Yuga Labs, the creators of the Bored Ape Yacht Club brand. Otherside is a game that blends mechanics from massive multiplayer online role playing games (MMORPGs) and web3-enabled virtual worlds. It is a MMORPG where the players own the world and NFTs become playable characters.
There are a total of 200,000 Otherdeeds, which represent 200,000 pieces of land on Otherside. The first 100,000 Otherdeeds are available now. 55,000 of those were sold during public mint. 30,000 can be claimed by BAYC and MAYC holders. 15,000 are reserved for Yuga Labs and its friends. The second batch of 100,000 Otherdeeds will be exclusively rewarded to holders of Otherdeeds who contribute to the development of Otherside.
The Sale and the Gas War
The Otherside land sale is the biggest NFT event (and gas war) to date. 55,000 Otherdeeds were sold in a public mint on April 30 at 9pm. The price was 305 ApeCoin per Otherdeed.
Ironically, Yuga Labs designed the public sale specifically to avoid a gas war. They decided not to use a Dutch Auction format and set a flat price of 305 ApeCoin. They also enforced a limit of 2 Otherdeeds per KYC'ed wallet.
However, on-chain data showed clearly prior to the public sale that a gas war was inevitable. Total mintable Otherdeeds were over 65,000 from KYC'ed wallets that had enough $APE. There were only 55,000 supply.
As expected, the Otherdeed public mint became the largest gas war the NFT space had ever witnessed. It lasted almost three hours. The demand was so high that it caused Ethereum gas to be consistently above 5,000 gwei during minting, making the network extremely expensive (and practically unusable) for other purposes.
Yuga Labs apologized shortly after the mint ended, but blamed the situation on Ethereum.
This caused an immediate backlash from the NFT community. People were frustrated because Yuga Labs did not take proper actions even though a gas war was clearly expected.
Yuga Labs' minting contract was also poorly optimized. For example, the minting contract still included a Dutch Auction section, which served no purpose other than burning gas. Yuga Labs forgot to remove that part after they decided to not do a Dutch Auction.
The community FUD went on for a couple of days, until Yuga Labs announced that they had refunded people gas for all failed transactions during minting.
It is shocking that Yuga Labs failed to execute the Otherdeeds sale properly. Hopefully all projects could learn from it and do their best to avoid any types of gas wars in the future.
Volume and Price on Secondary Markets
The average cost of an Otherdeed at minting was approximately 2.75 ETH to 3.5 ETH. The mint price was about 2 ETH, because ApeCoin was about $20 a piece around minting. The gas fees paid by minters of Otherdeeds were typically more than 1.5 ETH per transaction, which could include one or two Otherdeeds. The cost for people who bought $APE at below $20 would be lower. But the lowest is probably 2 ETH per Otherdeed.
Otherdeeds were revealed soon after public mint. It generated an insane amount of trading volume. In fact, it made history. OpenSea daily ETH volume reached 191,152 ETH on May 1st, the day Otherdeeds began trading. It marked a 46% increase from the previous ATH record, 130,317 ETH, set on Feb 1st, 2022. Otherdeeds' daily volume was 85,685 ETH, accounting for 45% of the total volume. Its hourly volume of 17,977 ETH on May 1st at 21:00 UTC is enough to put the collection into the top 100 collections of all time by volume, overtaking Lil' Heroes by Edgar Plans' spot. Lil' Heroes by Edgar Plans was a popular project launched on January 16th, 2022 with a lifetime volume of 17,933 ETH. Yes, that's right, Otherdeeds had more volume in an hour than Lil' Heroes did over 5 months.
The floor price of Otherdeeds has stabilized around 3.5 - 4 ETH, which is unlikely to change much until further details regarding the Otherside are released. Building a MMORPG is not easy. Traditional gaming studios could spend years and tons of money on a title yet still fail. If the Otherside underperforms, it will be interesting to see what kind of impact it would have on Yuga Labs' PFP collections.
Azuki BEANZ Reveal
Azuki revealed its BEANZ collection on May 5th. It is well received by the community.
Azuki designed two interesting functionalities for BEANZ.
First, you could pair a BEANZ with an Azuki and generate an image that could be saved without changing the metadata of the individual NFTs.
Second, you could turn on “Selfie Mode” in the Azuki gallery to get a front look at your BEANZ.
Azuki also announced that they picked up Rehito Hatoyama as an advisor. As former CEO of Sanrio US/EU, Hatoyama helped build iconic global brands like Hello Kitty. The Azuki team is only getting stronger.
The next big thing for Azuki is probably $BEAN or Azuki-verse. It's interesting to see if Azuki will follow Yuga Labs or do something completely different.
Gem Acquired by OpenSea and the Revival of Genie
The popular NFT aggregator Gem.xyz announced on April 25th that it had been acquired by OpenSea.
Aggregators allow buyers to batch buy NFTs across all major marketplaces in a single transaction, saving gas and time. Genie was the first NFT marketplace aggregator. But Gem quickly became the most popular one due to better user experience.
For example, Gem is the best for gas optimization. It is cheaper in terms of gas fees to purchase even 1 NFT via Gem instead of on OpenSea directly. OpenSea must have noticed that Gem was gaining traction. An acquisition seemed a logical move for them.
An unexpected turn following the acquisition is that now more people are using Genie again, not because Genie has improved, but because Genie could still issue a token, while Gem, being acquired by OpenSea, is unlikely to have a token ever. In fact, the Genie team has already teased a $GENIE token. Transacting on the platform definitely increases people's chances of a big airdrop.
Some other news you might be interested in learning more:
- STEPN, a Move-to-Earn app, is now live on the NFT marketplace OpenSea and is priced in $SOL.
- Venly, an NFT tools provider, has closed a $23 million Series A round led by Courtside Ventures.
- Zora, an NFT tooling protocol, raised $50M in a seed round led by Haun Ventures.
- VeeFriends S2 is dropped with 55,555 pieces.
- Ryan Carson announced that he would step down from Proof and focus on his new NFT fund.
- Mable Jiang, a partner at Multicoin Capital, announced her departure to join STEPN as Chief Revenue Officer.
A lot of NFT liquidity is now locked in the 55,000 Otherdeeds. Most major projects have already published their good news. We will probably see another period of little activity in the next few weeks.