The NFT market has been reeling following an all-time daily trading volume record. (We hit almost $250 million on OpenSea, not including the other big NFT platforms like LooksRare and Rarible.) Frankly, the market was growing at an unsustainable rate. However, small but significant corrections are positive in the long term for any asset class. NFTs are no exception.
Diamonds in the Rough
Even though there was a steep wholesale correction in the NFT market, there are fantastic collections that are finally getting their moments in the sun.
Karafuru was the standout launch of the first week of February. It’s a collection of 5,555 generative NFTs created by Museum of Toys (a group of experienced toy designers) and the popular Indonesian illustrator, Wede. This is a simple but colorful project that is all about the art, with little utility, so far at least. The traits used to generate the characters are wild, wacky, and bombastic–perfect for sticking out in a sea of mundane NFT projects.
Cool Pets was the next most exciting drop, even though it was delayed 4 or 5 times. Cool Pets is the companion collection to Cool Cats, and its presale finally opened Monday. They minted for 0.5 ETH (or 0 for Cool Cat holders) and are already selling for about 2.5 ETH despite the large size of the collection. For now, the Pets are just bland pictures of eggs, but Thursday (barring no further delays), holders can begin to give them items which will help them grow into adorable adult creatures.
Another important event this week is the $RUG token dropping. The massive NFT and web3 influencer, Farokh, released the genesis NFTs for his new platform called Rug Radio in January. He wants to make Rug Radio a decentralized media platform controlled by holders of the NFT. Each NFT will earn $RUG tokens depending on its rarity starting Thursday. These $RUG tokens will then be traded for Rug DAO tokens ($RDAO) that act as voting shares for the platform. The genesis NFTs have roughly 4xed since they “revealed’ in January and may rise even higher if the platform is successful.
In the last edition of The NFTimes, we discussed a new trend in NFTs that is dominating the market. Azuki, an anime-inspired generative collection of stylish avatars, gave birth to a tsunami of copycat projects. But this wave has already crashed. Many of these anime-inspired or Asia-centered collections have suffered terribly in the past week: Zipcy’s Supernormals, Lives of Asuna, and Killer GF were hit the worst; all having their price floors fall by 50-90%. Azuki itself fell from 15 ETH to 11, despite an incredible 100k ETH trading volume over its lifetime.
Play-to-earn games have been especially successful as of late, but it has had its fair share of recent flops too. The old pillars of play-to-earn, Ether Orcs, Wolf Game, and X are holding up quite well. New editions, however, are having issues taking off, mostly due to the impatience of the NFT market. The death nail of a play-to-earn NFT game is an announcement saying: “our game is launching in a month or more.”
After watching NFTs for a few weeks, it becomes evident that liquidity often flows towards what collectors deem the most profitable short-term flips.
Pixelmon was the greatest example of this deadly impatience.
Pixelmon will be an extremely ambitious open-world game with a decent pixel-art design inspired by the massive franchise Pokemon. Players will be able to explore the world and catch wild creatures that can be traded or sold. It released its genesis collection of about 9k NFTs that cannot be acquired in-game on Sunday.
Pixelmon decided to sell these NFTs in a Dutch Auction, an all too common method of getting as much money as possible from investors. In a Dutch Auction, trading opens at a high price and decreases a certain amount at a regular time interval. Pixelmon opened its auction at 3 ETH where it nearly sold out, raising 10s of millions of dollars. Only a few hundred sold for less.
For reference, NFT projects, with a few unusual exceptions, set their prices between 0.05 ETH and 0.5 ETH at the high end. Unfortunately, many investors didn’t realize that the game wouldn’t launch until Q3, a virtual eternity in the NFT space. Once this information spread to new investors, panic ensued and the price tanked more than 50%. Hopefully, Pixelmon acts as a warning to similar projects who want to sell their NFTs early at an exorbitant price.
Finally, here are a few projects to watch this upcoming week, accompanied by short descriptions:
- These NFTs give holders presale access to Kuroro Beasts NFTs launching in late February, early March
- Kururo Beasts is an ambitious play-to-earn game inspired by Pokemon and Ether Orcs
- Its price has held up despite it still being a few weeks before the game is released
- It’s another anime-inspired collection but with a darker more moody theme than Azuki
- Haus phase holders are automatically whitelisted for it
- Could flop if the anime meta dies off before it launches, but has a decent chance to succeed if it doesn’t
- Starcatchers is all about its art with a cute style similar to Doodles, Cool Cats, Little Lemon Friends, etc.
- Starcatchers has already formed partnerships with other prominent projects
- The whitelist is still open and will likely be quite profitable if you can clutch a spot
- This is a small project just getting started with a similar idea to Haus phases
- The NFT will be a pass to various projects they plan on releasing after the initial drop
- With its tiny supply of about 700, they could be a moonshot if any one of their projects take off
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By: Henry Stater and William Laurent