Short Items, April 23, 2022 Edition
What's going on in the Metaverse and on the blockchain?
This has been a largely positive week for NFT traders, particularly those who have been able to get into the larger projects (ahem, Moonbirds). While I was finishing this newsletter on Friday afternoon, news broke that the Akutar Dutch Auction contract was exploited: A feature intended to refund those who bid above the auction’s final resting price was apparently vulnerable to a bug in its processRefunds() function. The drama that has unfolded has involved coded messages, over 15,490 ETH ($45 million USD) in locked up funds, and some real stress and anxiety for buyers (to say nothing of the Akutar team, who had doubtless intended to spend tonight celebrating).
Some are confident that the Aku team or even the hacker will make it right, others are more critical of the team for not having taken warnings about the contract’s vulnerability seriously. The whole thing quickly spiraled into an event worthy of its own post (Forthcoming!). But first, let’s go over some other news in NFT’s from this week.
Liquidity Drains and the Pareto Principle?
Last time, I wrote about what appeared to be a significant contraction of NFT trading volume. Some had speculated that this contraction was the result of several forthcoming liquidity sinks, specifically, MoonBirds, the long-rumored debut of the Bored Ape Yacht Club’s multiverse or land sale or otherwise Extremely Hyped and Expensive Event, the April deadline for U.S. tax filing, the debut of the Murakami.Flowers collection, and VeeFriends Series 2.
As you can see from the graph below, the past week has had much more volume.
Or has it?
The aggregate total of OpenSea Ethereum trading volume over the past seven days (As of about 2 PM PDT, April 22nd) has been 352,763 Ethereum, or $1,046,158,979.89 USD (at the current rate of $2,949.15 USD to 1 Ethereum). The average daily trading volume has been $130,769,872.49 USD.
But have the debuts of these big collections obscured the overall state of the NFT market? The top 10 collections in 7-day volume, again as of mid-afternoon 4/22, were Moonbirds at an astonishing 111,711.01 ETH, Murakami.Flowers Seed at 21,701.15 ETH, BEANZ Official at 6,645.47 ETH, RFKT-MNLTH at 6,431.99 ETH, Akutar Mint Pass at 5,930 ETH, VeeFriends Series 2 at 4,721.54 ETH, The Association (NBA) with 3,904.11 ETH, Shinsei Galverse at 2,441.17 ETH, PreMint Pass at 2,315.22, and Shinsekaicorp at 2,070.46 ETH.
While 7-day volume may not be indicative of these collections’ bigger pictures – most of these are not even one week old, and many collections’ floor prices are deceptive because rarity creates a wide price spread – this list represents approximately 43% of the entire OpenSea volume during this time - and this list does not even include perennial favorites like Bored Ape Yacht Club or Punks. Therefore, if we consider the top 10 collections as outliers, the 7-day USD trading volume is $596,310,618.54 – still higher than the 7-day aggregate volume of $547,126,413.10 from April 8 to April 14th, but not overwhelmingly so (~9%). Compared to the first week of April, in which the 7-day aggregate volume was $918,148,435.18 USD, the current market is still faring comparatively well even when you remove the volume of those ten collections. Even so, these numbers alone don’t show to what degree the overall NFT market is influenced by these highly visible and influential collections.
The Pareto Principle would suggest that 80% of NFT trading volume reflects only 20% of the collections, so this information is unsurprising. Still, though, it complicates the idea that the NFT market is exploding. Furthermore, since OpenSea generally reflects secondary market sales, its volume may not fully capture the market – especially if the NFT market is beginning to evolve towards utility, or even if it is just moving away from flipping. What do you think? This is an issue I’ll continue to cover and explore, hopefully with more rigorous data analysis.
Security and Safety
If you have ever done much of anything with your MetaMask account, then you have connected to a site. But did you remember to disconnect? If you click on the upper right-hand corner of Metamask and select “Connected Sites,” you can see what sites you are connected to. Be sure you disconnect from any that you are not actively using.
Revoking permissions is another important part of NFT security, but it seems that many people misunderstand it. Permissions allow NFT’s or third parties to access or transfer the NFT’s. The annoying transaction fee you have to pay every time you list an item from a new collection is this permission. The site Revoke.Cash provides a simple interface for doing this, but keep in mind that if you revoke permission for something you want to sell, you’ll have to re-sign and pay again. Further, the wording used in these permissions tends to unnerve people. If you’re tech-savvier than I, please weigh in, but from what I can tell, the term “unlimited allowance” is pretty standard and reflects the third party’s ability to sell and transfer the item on your behalf. Regardless, look over your permissions occasionally and revoke any that you don’t recognize!
Do you have any passwords that you’ve been using for a long time, or are easy to guess? You can generate secure passwords locally on your machine using a variety of tools; I like this site. Go change them while I brew some tea.
Photo by Content Pixie on Unsplash
Goings-On
It seems like the maybe-Kanye, maybe-not project has ventured more into the definitely-not territory with the deletion of the relevant Discord server & the removal of information from the website. I have yet to find anyone who’s surprised - or who even still remembers the project. So it goes.
From the perspective of projects I have been following or involved in,1 this week’s wins included explosive growth in utility-based NFT’s. Coniun Pass’s floor price jumped to 1.365 (as of Friday afternoon, 4/22), the Nifty Portal is now trading at 0.279, and the PREMINT Collector Pass is at 2.06. Several podcasts and influencers have remarked on this, and I think this is a positive sign because these projects showcase some of the use cases for NFT’s.
The @RugPullFinder Twitter account launched an official website. As someone who really dislikes Twitter, especially for tracking down old conversations and posts, I was glad to see that development.
Infura, a major node used by Metamask, has had a major outage today (Friday), which has impaired MetaMask performance.
The beta launch of the highly anticipated Coinbase NFT marketplace on 4/20 was met with skepticism & viral tweets about the “comment” feature, but otherwise, the launch seems to have gone well, and now we’re just waiting to see how it progresses.
Have you used Coinbase NFT yet? Are you planning to? Skipping it altogether? Let me know your thoughts & how it went!
Upcoming & New Projects on my Radar
I have a positive view of these projects based on the information I have about them right now. They aren’t getting as much coverage in the circles of NFT social media that I’ve been in, so I wanted to share them here.
This is neither an endorsement, nor is it financial advice, but I think they’re cool.
Cryptogene (a “Free-to-earn gaming ecosystem”). I’ve been following this one for quite some time! The tagline: “Become a degeneticist and create living Kymera NFT’s,” and it purports to use AI and CRISPR. The premise is that players can genetically engineer “Kymera,” which they can then stake, breed (?), care for, etc. It’s probably a great NFT for evil scientists.2 I’d join just for the portmanteau “degeneticist,” myself. I got WL a while ago for playing an easy web game. The white paper outlines the experience in greater detail, and it sounds a lot more complex and interesting than I initially thought. I think that’s why there’s no announced mint date or price yet. Discord link is here (this is not my own invite link; it’s the one from the official site).
Bubbleworld Founders Pass / Executive Founders Pass / Supreme Founders Pass (An access pass / membership). Launching in June, no date or mint price has been announced yet. What impresses me about this one (based on the pitch deck): This is a pass to “a curated set of NFT collections from treasured creators who prioritize building great communities and gaining with them” (italics theirs). There are lots of credible investors associated with the project (MoonPay, GoPuff, High Snobiety, Post Malone, etc.). It seems that Bubbleworld holders get whitelist spots, token allocation for tokens associated with partner projects, discounts on both minting and project royalties, access to private events, “and more.” Therefore, Bubbleworld could potentially reduce some of the friction in NFT’s by curating quality projects, cutting out some of the ridiculousness of groveling for whitelists, and bridging the digital and physical world with experiences. (Discord invites are currently disabled).
KMB World (Cause-based PFP, 3,333-item collection). Minting now for .01! 80% of items are superheroes fighting Putin, 20% are designed to fight him by humiliating him, 100% of primary sales and royalties support humanitarian efforts in Ukraine via Unchain.fund. It’s pure fun, yet a very important cause. I love that the creators found a way to make this critical, very serious issue fun and accessible. I particularly like the idea of humiliating Putin. I want to disclose that I know the creators and have been watching this project develop for several weeks now. I’m excited to see how it grows and what this team does.
Have you heard of these? What fantastic upcoming projects do you want to tell me about?
Thanks as always for reading. It means a lot to me. I hope you’re having a wonderful weekend!
Disclosures and disclaimers:
Nothing in this publication should be considered financial advice.
I currently (April 23, 2022) own 2 Coniun NFT’s, 1 Nifty Portal, and 1 KMB.
No companies or NFT teams have paid me or given me anything in exchange for this coverage. They probably do not even know I exist. Above, I have disclosed any relationship I have with any relevant individuals or teams.
All the information about these projects was accurate as of the time I wrote this, and I have verified this information to the best of my ability. None of the links I’ve used in this post are referral links unless otherwise indicated.
Thank you again very much for reading. If you appreciated this update and haven’t subscribed yet, please do so, or share it with a friend!
If you really appreciate this newsletter, my ETH wallet is open for contributions of any size - any of which would be appreciated! And no pressure if you can’t. Your interest in this publication remains the biggest compliment.
0x4E53CD9f9BF1A0C2f89E7af2Dd8F72b8f0cFC142
Disclosure: I own one Nifty Portal and 2 Coniun Passes and I will disclose that it has been a great week that way. 🚀🚀🚀
That is neither financial nor scientific advice.