NFT Weekly Recap - May Week3


NFTs have been falling apart since the Otherdeed sale. No individual project outperformed in the market-wide crash. It may take a couple weeks or even months/years for the real winners to emerge. In the meantime, survival is everyone's top priority.

Basic Stats

As usual, let's begin with numbers.

Otherdeed public sale is probably the peak of this cycle. Not only did it drain a lot of liquidity from the market, but it was also followed by the UST-LUNA collapse, which triggered a crypto-wide sell-off. The double effect is deadly. Total NFT trading volume (as measured in ETH) dropped by 47% last week. Daily volume dropped below 30,000 ETH on May 15, the first time since December 26, 2021.

The number of daily active traders decreased by 31% last week. The party is getting boring, so people are leaving. Daily active traders were below 30,000 on both May 11 and May 12, the first time since November 25-26, 2021, when NFTs were in a grave bear market. In addition, May 11-12 were no holidays. They were a Wednesday and a Thursday, which were typically very busy days for NFT trading.

In terms of floor price, every single project fell. Azuki was down 69.45%, while BEANZ was down 80.64%. Azuki and BEANZ were hit the most, because of the drama around their founder, ZAGABOND. Ragnarok also suffered greatly, being down over 60%. Interestingly, MAYC, Doodles, Moonbirds, and Clone X all fell about 25%. Adidas Originals: Into the Metaverse and Murakami Flowers showed more resilience. But each of the two is riding on good news right now. Adidas is giving out physical merchandise, while Murakami Flowers is on Gagosian exhibition in New York. Their prices may not hold when these positives fade away.


Notable Events

ZAGABOND the Drama

Last week was no doubt a dramatic week for the red beans.

ZAGABOND, the founder of Azuki/Chiru Labs, released an article on May 9th titled A Builder's Journey. ZAGABOND shared his Web3 experience prior to Azuki in the article. ZAGABOND admitted that he was Philip (the intern) and that he was the main creator behind CryptoPhunks, Tendies, and CryptoZunks. ZAGABOND claimed that Azuki was successful because it was built on learnings from those prior, not-so-successful projects.

The article lit up the NFT community immediately because all three projects named in the article were considered rug pulls. ZAGABOND, who was either anonymous or using the pseudonym Philip (the intern) at the time, abandoned the projects and ran away with investor funds.

People separated into two camps. Those supporting ZAGABOND believed in the old saying, failures are the stepping stones to success. To them, the prior failed projects were valuable lessons that taught ZAGABOND how to build Azuki.

On the other side, people denounced ZAGABOND for rugging. When the previous projects ran into trouble, ZAGABOND simply walked away and started a new one. Roadmaps were abandoned. Twitter accounts such as CryptoPhunks and Philip (the intern) were deleted. But no money was returned.

Within hours of the publication of A Builder's Journey, the floor prices of Azuki and BEANZ tanked by almost 50%. People panicked because ZAGABOND could rug Azuki in the future. The drop in price was followed by an immediate bounce back. But ZAGABOND's awful performance in Twitter Space made things worse. Prices gradually recovered after ZAGABOND issued a formal apology and promised to hand over control of contracts and return funds.

Source: twitter@ZAGABOND

It is unclear whether ZAGABOND intentionally chose the day UST de-pegged to release his confessions. But it definitely made May 9 more chaotic. There were rumors that ZAGABOND was about to get exposed by others so he decided to do it himself first.

Mistakes were certainly made. Nobody is perfect.

It is now clear that ZAGABOND will remedy the situation by making those projects' communities whole. The Azuki team is working on handing over control of contracts as well as on returning the funds. They are likely to carry out the tasks given how much is at stake.

Does ZAGABOND deserve a second chance? I believe so. But ZAGABOND needs to show that he truly learned from his mistakes. His performance in Andrew Wang's Twitter Space certainly did not project a good image. Apologizing on Twitter after things got worse is not enough. He must prove it with his actions.

Azuki is already an NFT icon. Its going down would be detrimental to everybody in this space. Hopefully, ZAGABOND could rebuild the community's trust in him and keep innovating at the frontier of Web3.

Murakami Flowers Reveal

Source: japan times

Murakami Flowers is a very unique NFT project. Murakami Flowers seeds were minted in March and April, which can be revealed now and grow into flowers.

It was founded by Takashi Murakami, one of the most famous contemporary artists of our time. His signature artwork is his flowers. In addition to his decades of experience creating traditional art, Murakami previously worked with RTFKT on Clone X. Clone X achieved major success and is now one of the most recognizable PFPs.

Murakami Flowers are Murakami's flowers expressed in a pixel art format. 108 flowers make up a field and there are 108 fields. So 11,664 flowers in total. The number 108 is a reference to the Japanese concept, bonnō, or, earthly temptations.

Murakami Flowers is a strange combination of PFP and art. People have already started using the flowers as their Twitter profile pictures. The flowers could also be printed out as pieces of art, as shown above.

There is a decent roadmap for Murakami Flowers, including collaborations with fashion brands and the production of a game. But it is unclear whether Takashi Murakami, being 61 years old, will be able to navigate the rough waters of Web3 on his own.

Murakami Flowers so far was poorly run. The public mint was heavily botted. A few individuals ended up holding a lot of supply. There is also no official Twitter account or Discord. Announcements were made via an email newsletter.

Murakami was not known for his business acumen. Despite his successful artistic career, Murakami almost declared bankruptcy in the summer of 2020. The artist's lavish spending and a big-budget sci-fi film that was never released could be the cause of his financial woes.

The market still buys Murakami's name. But if Murakami Flowers continues to execute poorly, the market's patience is not unlimited.

Other News

Some other news you might be interested in learning more:

  • Instagram announced support for NFTs.

  • Dapper Labs announced a $725M ecosystem fund for Flow.

  • Yuga Labs released a teaser video of the Otherside.

  • Co:Create, a startup that helps NFT projects launch tokens, raised $25m in a seed round led by a16z.

Closing Thoughts

Bear markets are the best time to buy blue-chips. Those who choose wisely will be rewarded.





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