The NFT market has taken another turn for the worst as the crisis in Ukraine continues. Almost every bluechip collection is down. Bored Apes dipped below 70 ETH, Azuki fell to 9 ETH and Cool Cats are struggling to break 7ETH again.
Is it time to declare a bear market?
We can’t keep calling it a short correction anymore. Luckily, NFT bear markets usually aren’t very long. Sometimes they only last a few weeks.
The Cash Grab of All Cash Grabs
We at least had one thing to giggle about during this time of crisis. Tai Lopez, an entrepreneur and internet marketer with questionable tactics, launched his first NFT project this week. All the NFT community could do was laugh at his absurd cash grab called the OG (Original Garage) Social Club.
Did they really expect to get 80 ETH?
Even for the top NFT collections in the world, 80 ETH is an insane price to ask. The reserve price, 10 ETH, is absurd too. It seems like he removed the price minimum after he realized no one would give him 10 ETH and 1 finally sold for about 3. Cash grabs are unfortunately quite common in NFTs, but they usually aren’t this outlandish. At least we had fun laughing at this NFT project with three clever tiers–Silver, Gold, and Black cards.
Each tier has an extremely long list of promised utilities. For example, Lopez says Silver NFTs will grant access to pop-up events, a holders exclusive hotel, metaverse events, and more. Gold Cards (varying in price between about 1 to 5 ETH) give holders access to Lopez himself in small group settings like small conferences and games of basketball. Somehow about 235 of these Gold NFTs were minted, though the project did not come close to minting out.
The first two types of OG Social Club NFTs were overpriced (and a bit ridiculous), but the Black collection was even more insane. He offered 30 different categories of Black Cards, each with their own 1 on 1 event with Lopez himself along with access to an exclusive hotel, nightclub, restaurant, and more. He originally put them up for sale in Dutch auctions starting at 80 ETH with a reserve price of 10 ETH.
(We have talked at length in the NFTimes about overhyped NFT projects launching through pricey Dutch auctions. A Dutch auction is where the sale opens at a high price and decreases at a regular interval until it sells out or it reaches a reserve price. This is different from most NFT mints where there is a set price, usually much lower than where DAs open.)
A Positive Exploit?
One of the scariest moments of the past week for a small subset of NFT investors was the Treasure marketplace exploit. Treasure is a pioneering decentralized NFT ecosystem on the Layer 2 network Arbitrum. At the foundation of Treasure is the Bridgeworld metaverse.
Bridgeworld is built on an economy with three basic elements: $MAGIC, Treasures, and Legions. $MAGIC is the native token of the Treasure ecosystem and powers everything on it. Every NFT on Treasure is bought and sold with $MAGIC and has different uses in each metaverse project in the ecosystem.
$MAGIC is produced by using 2 different types of NFTs together: Legions and Treasures.
Importantly, Treasures only make $MAGIC when its holder has enough $MAGIC already staked. Treasure is careful at keeping $MAGIC inflation at bay with mechanisms like this. Legions are like the players and are required to do anything in the Bridgeworld metaverse. They can use Treasures to create more $MAGIC and can build infrastructure and equipment.
The entire Treasure ecosystem is controlled by the Treasure DAO (decentralized autonomous organization). It’s decentralized because $MAGIC stakers govern the DAO. They vote on important decisions like $MAGIC distribution, choosing which new projects to onboard, and revenue-sharing agreements for the marketplace.
The Treasure ecosystem is likely the best way to bootstrap a new metaverse NFT project right now. It promises to have a strong community, with an $80 million market cap token to build into its project, and possibly even funding from the Treasure DAO.
There is one big issue.
The NFTs will be difficult to trade. They can’t be traded on the platform with the highest volume by far, OpenSea, and users have to learn how to send ETH over to the Arbitrum chain.
Will this cause frustration?
Treasure’s proprietary NFT marketplace is the largest on Arbitrum and had few problems until last Wednesday.
Then came the hack.
Suddenly a bunch of NFTs started selling for 0 $MAGIC even though they were listed for much more. The community panicked. Users were urged to delist every NFT on the platform.
Soon the marketplace had to be shut down. We found out later that a developer working on another Arbitrum marketplace for the new project Shogun War was the one to discover the exploit.
The wider NFT community worried that a similar exploit was recently found on OpenSea . It caused mass panic even though it was a phishing attack that only compromised about 32 wallets. However, the Treasure exploit made everyone with NFTs listed on the marketplace vulnerable.
Only 154 NFTs were stolen and 150 were successfully returned. The holders of the final 4 have already been reimbursed for their loss.
This was a pretty miserable sign for the backend side of Treasure, but a fantastic one for its community and leadership. A lot of people knew how to re-create the exploit and still, only 154 NFTs were taken. Most of those people who leveraged the exploit said that they were doing it to protect the holders and eventually sent the NFTs back.
The Treasure team worked overtime to fix the problem and make sure those affected were made whole again.
Finally, here are a few projects to watch this upcoming week, accompanied by short descriptions:
- I Like You, You’re Weird is an art and community-focused project with more hype than most of its competitors
- The art is extremely abstract and colorful, reminiscent of the Peaceful Groupies but more intense
- The founders, Mason Rothschild and Amber Park are talented and celebrated artists with decently large followings
- Cyber Brokers is an art-focused collection of 10,000 metaverse avatars that has started to gain a lot of attention
- The realistic art was drawn by the already famous artist Jose Bellini
- Holders will automatically become members of Bellini’s upcoming metaverse fashion brand MirrorWare
- Super Ordinary Villains is a collection of 8,888 generative villain NFTs
- The few sneak peeks they have released show off a wacky and unique art style
- It has some of the best production values of any new NFT project. They even made a hilarious 4-minute orientation video with multiple actors and an infomercial
Want to keep up with Henry and NFTs 24/7? Join him in AlphaMint’s dedicated NFT Discord server, and don’t forget to check the previous edition of NFTimes.