NFTimes Volume 18 – A Billion-Dollar Metaverse Land Sale?

billion dollar metaverse sale

This January, Bored Apes dethroned Cryptopunks as the top NFT project, and its floor price has continued to increase ever since. Part of this success comes from Yuga Labs’s ability to bring holders of their NFTs value.

They have done this by airdropping more NFTs for free–like the Mutant Ape Yacht Club and the Bored Ape Kennel Club. They also gave holders about 10k Apecoin—or 13k if they kept their Mutant and Kennel Club NFTs.

Investors who minted a Bored Ape a year ago for 0.08 ETH and held both the ape and the airdrop bounty are up at least $800,000.

There is a potentially massive issue with this strategy, which we discussed in NFTimes 14, but it seems to be the best way to create value in the short term.

However, that could change this week.

The Largest NFT Mint Ever

Yuga Labs is going big this year with the launch of its new metaverse RPG, the Otherside. It’s launching on Saturday, April 30th, with the first of two tremendous NFT land sales. We went over the basics of the land sale in NFTimes 11, but the specifics have already changed drastically. It seems even worse than we thought it would be.

Yuga’s reputation of bringing value to only its holders may soon evaporate when it sucks hundreds of millions of dollars from the NFT market this Saturday.

Right now we have almost zero confirmed information about the drop. Comically, most of the info we have came from a leaked pitch deck the company made to woo investors. This seemed like a great primary source—until one of the founders claimed it was an outdated deck that he had never even seen before.

He said that some things have since changed, but we can guess that they kept most of the basics the same, i.e. we know the Otherside will be an open metaverse game with support for multiple different NFT collections, not just Bored Apes and their companions.

We know almost nothing about the game, but we have more info about the sale itself. The deck said there will be two sales of 100k metaverse land NFTs each: one in April and one later this year. The first date was only confirmed a few days ago.

It also mentioned that another collection of NFTs, known as Kodas, will be tied into the land sale. Kodas are the adorable flying creatures with big eyes seen in the trailer for the Otherside. Lucky minters will receive one that is paired with their land.

Perverse Incentives Inspire Rumors

At this point, we have far more rumors than we have facts. The lack of info from Yuga Labs has created multiple perverse incentives for people to carelessly start rumors.

The first incentive is, of course, profit.

One of the most popular rumors claims that the sale will be entirely tendered in Apecoin. This would be absolutely huge for the token, as it would essentially lock up hundreds of millions of dollars worth of the coin.

The rumor has spread so much that a majority of the community believes it must be true. Never mind that it doesn’t make sense for Yuga. Why would they take their largest payday yet with an illiquid token when they could take their haul in Ethereum instead?

It’s still possible that it tenders the sale in Apecoin to make the token skyrocket and endear holders, but it seems unlikely.

Unsurprisingly, many of the Twitter influencers peddling this rumor are owners of Apecoin. I wonder why…not!

The second incentive is attention.

Unfortunately, NFT Twitter is often tainted by influencers looking for nothing more than attention and profit. To attain as many followers and likes as possible, they often use a tactic called “engagement farming.”

For example, they post Tweets like “Which NFT project should I buy?” all the time. This gets investors to comment on the projects they have embraced, hoping for quick profit. The Twitter algorithm then promotes these Tweets to others, and the original poster gets their desired boost in engagement.

Rumors with gargantuan implications can yield great results, via posts designed to get people to like and comment, whether they’re true or not. The influencer @SpiritAzuki set NFT Twitter ablaze when he tweeted this:

“BAYC Land contract found on testnet | Here is a breakdown ??| -Mint is all in $ape | -Toggle for KYC.”

He confidently stated that he had found the land sale smart contract on a test network, despite having no confirmation to support his claim. He also failed to mention that the contract is called “Eggplant Farm.”

He even tweeted earlier that day that “Sometimes it doesn’t matter if a rumor is true or not. People just love to speculate.”

This doesn’t mean he’s being malicious at all, but it doesn’t give much credence to the rumor he propagated only 7 hours later.

Another influencer later claimed that this contract is set up to sell the land through a dutch auction starting at 300 Apecoin. On the surface, this might not seem ridiculous, but it is. If this ends up being the price–and it sells out at 300 Apecoin–Yuga Labs would end up with $500 million worth of the token. That’s from the first sale alone.

Assuming Apecoin stays the same price or moves higher, that would bring in more than $1 billion worth of the token over both sales. Yuga would never be able to sell a large majority of those tokens—let alone all of them—without annihilating its price.

Worse still, it would likely prove devastating for the NFT market to lose that much of its relatively low liquidity. It would essentially be a massive wealth transfer from the pockets of traders that might buy other NFTs with it to the coffers of Yuga Labs and their investors.

True or False?

We will find out which of these rumors are true and which are false soon enough. Until then we have to wait and think carefully about why someone might be spreading a rumor.

Either way, Yuga Labs isn’t going anywhere, and their forthcoming launch is sure to send shockwaves through the world of NFTs.


Do you want to learn more about NFTs and keep up with the rapidly evolving market? Check out some of our favorite editions of The NFTimes:

Keep up with Henry and NFTs 24/7. Join him in AlphaMint’s dedicated NFT Discord server.

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