NFT Weekly Recap - May Week4


Bear market continues in NFT. Weekly trading volume dropped another 38.50%. Interestingly, weekly trader count increased by 25.37%. More traders actually generated much less volume. Trading volume per trader decreased by a staggering 50.95%.

Hello guys,

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.

Basic Stats

As usual, let's begin with numbers.

As mentioned in last week's recap, the Otherdeed public sale was the peak of this cycle. Total NFT trading volume (as measured in ETH) kept falling non-stop. The trend is obvious in the bar chart above. Weekly trading volume dropped another 38.50%. Daily volume dropped below 30,000 ETH again on May 21. The last time the market got this quiet was during the Christmas holidays last year.

Interestingly, the number of daily active traders increased by 25.37% last week. It managed to stay above 40,000 the whole week. However, more traders actually generated much less volume. Trading volume per trader decreased by a staggering 50.95%. Whether these traders will keep participating in the market or are selling and leaving remains to be seen.

In terms of floor price, most projects fell once again. The good thing is, they did not fall much. BAYC dropped by a little over 2%. Azuki and MAYC dropped by 6.35% and 7.50%, respectively. On the bright side, Clone X and Doodles enjoyed a green arrow of a little less than 4%. Moonbirds increased more than 12% because of their Oddities airdrop.


Notable Events

Moonbirds Oddities Airdrop

A little over a month after the Moonbirds public minting, the Proof Collective airdropped Oddities to Moonbirds holders. A Twitter account and a website were also created. The website declares that these 10,000 Oddities, or Moonbird pellets, will be revealed in July and that these are designed in collaboration with Gremplin, the creator of CrypToadz. The Oddities look like this at the moment.

Source: Moonbirds Oddities

According to the Twitter Space, titled ‘Moonbirds x PROOF Friday Update,’ Kevin Rose, founder of Proof, hinted that this side project has something to do with what owls hunt and eat. But there’s not too much information released about the Oddities just yet.

These Oddities are trading at ~3 ETH right now, while Moonbirds have a floor price of ~25 ETH. It is an interesting ratio, which shows that the market thinks of Oddities as something between a MAYC and a BAKC. The ratio is similar to what BEANZ is priced relative to Azuki. But MAYC and BEANZ are 20,000 pieces, 2x that of the original collection, while Oddities and BAKC are both 10,000 pieces, the same as the original collection.

There are still around 2 months before the Oddities reveal. As more information will be released regarding what these things actually are, prices will adjust accordingly.

Azuki Airdrop and Tax Implications

Azuki airdropped its jacket token to holders on May 20.

Source: Twitter@ZAGABOND

The Azuki Twin Tigers Jacket is inspired by 'Sukajan' jackets, an all-time classic fashion piece dating back to the 1940s that combines American & Japanese street culture. The Azuki team has put their own twist on the jacket, which symbolizes the solidarity of the Azuki garden. This reversible jacket features quilted Japanese silk in blue and red.

Each Azuki holder has been airdropped a Twin Tigers Jacket token, which can be used to redeem the jacket in the coming weeks. All royalties from the secondary market trading of the Azuki Twin Tigers Jacket token will go towards supporting Stand With Asians, an AAPI-focused community fund.

The token was initially trading at ~0.9 ETH before falling down to ~0.25 ETH at the time of writing. According to US tax law, Azuki holders are likely to pay a 30-35% income tax on the initial trading price of 0.9 ETH, i.e., 0.3 ETH. There is also a possible capital gains tax when holders sell. Therefore, this free airdrop may not be "free" after all. More details can be found in this tax blog.

The United States IRS has not issued clear guidance regarding how to tax crypto airdrops like the Azuki jacket token. But crypto is getting mainstream. To ensure legitimacy, NFT projects should take tax law implications into their consideration as they plan future events and airdrops. For example, it could be better tax-wise if the holders need to spend some gas to claim the token for the jacket because the valuation of the token will likely change to the gas fee paid.

Goblintown, a rather mysterious NFT project, topped volume charts over the weekend. There isn't a great deal of information released about the project yet. Its website states that it is a CC0 project with no roadmap, no Discord, and no utility. Goblintown started as a free mint on May 21. Its floor price once reached 0.7 ETH before falling back to 0.45 ETH at the time of writing. The project held a Twitter Space. But it only made things even more intriguing, because the team mostly talked about making burgers and declined to comment on their roadmap.

What is known is that it is a collection of 10,000 pieces featuring ugly creatures in Goblin Town, including goblins, mosquitoes, horses, and Kevin. Yes, that Kevin from Pixelmon.

Source: GoblinTown

It seems that Goblin Town got popular because it is a free and ugly collection. The low-key marketing strategy with no collaborations or whitelists also made it stand out from the rest of the crowd. It still has only 11.8K followers on Twitter, much less than a typical popular NFT project.

It is a wait-and-see whether Goblintown will turn out to be a worthwhile project or just a meme that disappears within a week (like frankfrank and KevinPunk). It's impossible to predict given the limited amount of information that is public at the moment.

Milady Founders Scandal

0xngmi published shocking evidence on Twitter that the founders of Milady are involved in a series of sickening activities, including racist, sexist, and homophobic blogs, grooming, gaslighting, and a suicide cult. I'd prefer not to cover any specifics. Curious readers could refer to the original thread for details.

Source: Twitter@0xngmi

The floor price of Milady tanked immediately, dropping 69% from 1.93 ETH on May 20 to 0.59 ETH at the time of writing. Similar to the Azuki/ZAGABOND scandal, the general Milady community suffered financially for the wrong-doings of the founders, who still made 5% royalties from all the secondary sales.

The Milady scandal once again highlights the risks associated with anonymous founders. Doxxing publicly may not be ideal. But some kind of zero-knowledge proof, where founders dox themselves without releasing personally identifiable information to the public, is definitely necessary to avoid misfortunes like this.

Other News

Some other news you might be interested in learning more:

  1. Yuga Labs announced that the first Otherside trip is coming on July 16th.
  2. Gem, the NFT marketplace aggregator, adds a feature to Bulk Send NFTs.
  3. Aave is internally testing a lending feature that uses NFT as collateral.

Closing Thoughts

The bear market continues. For builders, now is the best time to focus on building and delivering. For traders, why not get out of the basement and enjoy some sunshine?




trying to learn, think, and write

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