NFT Update
7 min readFeb 16, 2022
2022–02–16
Summary
Better risk sentiment over the past few days, with some of the attributable news being easing tensions between Ukraine/Russia.
- BTC comfortably above 50dma, and as long as price stays above $41k, we think the trend is in our favour — added some to our proprietary position yesterday
- ETH also presented a nice buy opportunity — following the breakout from its downtrend channel on 2/7, price came to retest the previous resistance as a support, which was then respected. Bullish as long as price stays above $2,900 — added some to our proprietary position yesterday
- Definitely seeing bid for risk in the last 24h with bitcoin dominance ticking lower + positive funding rate + alts rallying. Although we are bullish given bitcoin price action (as a bellwether for the broader market), we are not yet convinced of the alt rally, and are cautious when it comes to adding alt-exposures. Aside from that, we’re also paying extra caution to macro risks (Fed, geopolitical tensions) + equities price action ($ES, for one, does not seem very bullish given double top formation @ 4,585, and previous close below 200dma)
- Outperformers so far have been $BNB (+5%), $AVAX (+9%) — both trading surprisingly strong. On the $BNB side, it’s worth noting its price action, currently testing to break out of its downtrend channel; on the $AVAX side, $95 is the key level to clear. Fundamentally, don’t see too much going on either side, aside from BNB renaming Binance Smart Chain to BNB (build-and-build) chain, and Avalanche dApps collaborating with Terra’s UST significantly
On the NFT,
- Relatively quiet with dwindling volume (Chart 1) and count (Chart 2) — possible start of retracement in the NFT market? Won’t be surprised to see NFT underperform should broader market continues its positive tone, and various narratives (e.g. L1, L2, infra, etc.) grasp market attention again
- Also interesting to see that CryptoPunks is again catching up with BAYC
1. Project Updates
LooksRare updates ($RARE)
- What’s the deal: $LOOKS emission (which incentivized traders in the form of rebates) was reduced from 800 $LOOKS/block -> 380 $LOOKS/block on 2/10, resulting in reduction of trading rewards and $LOOKS staking rewards. Here are some of the results:
- Staking APR, which previously stood at 600–700%, is now ~250%, together with $LOOKS token price decline from >$7 to $2.2 (at the time of writing)
- Trading volume fell from >$500mio/day to current level of <$200mio, and are around similar levels to OpenSea, which would be predominantly genuine trading activities (due to fees)
- Wash trading volume as a % of total trading volume are still around the same level at ~97%
- LooksRare team also came under scrutiny last week as they cashed out ~23k ETH via Tornado Cash. However, as some have already pointed out, if LooksRare can convert just some of the NFT users from OpenSea to LooksRare, it would be a success.
Axie Infinity pivots to free-to-play in its Origin announcement
- More about the pivot: Axie Infinity ($AXS) is the biggest play-to-earn game, but has been suffering from declining activities since its peak in November (see Chart below), as well as declining AXS (-60% from peak) and SLP (-90% from peak) price. One of the biggest hurdles to potential players accessing Axie Infinity has been the upfront cost of purchasing Axies to play the game (rationally — who will pay first just to try a game?). The pivot will give players 3 free Axies — new version update is expected to be ~end of Q1'22
Quick blurb on Near NFTs
- Why it matters: We’ve established that owning blue-chip NFT could be one of the best ways to get high-octane returns. Despite the broader sell-off in underlying L1 tokens, the ‘symbolic’ NFTs have outperformed the L1 token, e.g. BAYC/CryptoPunks vs. ETH; Solana Monkey Business vs. SOL; vs. Galactic Punks vs. LUNA. If you are a $NEAR bull, here’s a spreadsheet of upcoming NFT mint for the Near ecosystem
2. New Entrants & Partnerships
Metaverse continues to remain hot, and corporates continue to dip their toes in metaverse.
- JPMorgan opens a lounge (“Onyx Lounge”) on Decentraland, marking the first bank to enter the metaverse (hi Jamie Dimon). The lounge was unveiled as part of a broader research report covering the metaverse.
- McDonalds filed trademarks for a virtual restaurant online that will deliver food in person
- Gucci revealed partnership with Sandbox to create interactive fashion experience based on Vault (new experimental online space by Gucci)
- Vice making a HQ in Decentraland
- Samsung hosted live stream on Decentraland, where users could perform quests, acquire NFT badges and wearables.
- MillerLite opens their Meta Lite Bar on Decentraland
Binance x YG Partnership
- What’s the partnership: for now, they just signed Memorandum of Understanding to build strategic partnership, in which they will cooperate on a range of blockchain projects, especially in the NFT space; Binance will provide the NFT platform and technology infrastructure (probably on Binance Smart Chain) while YG will supply NFT content and gaming assets.
- What’s the deal: Korean entertainment companies seem to be actively exploring NFT, as a form of monetization, with CEO of SM Entertainment previously also on Solana’s Breakpoint Conference. Also, interesting to see Binance re-enter the Korean market. Previously, Binance opened Binance Korea with dream of creating liquidity for the domestic audience, and an avenue for Korean clients to buy crypto without Kimchi premium. In BSC-space, activities have been rather lackadaiscal from its peak in Q1'21-Q2'21 as critique of centralisation and other chains offering more attractive liquidity incentives took place.
Zynga outlines NFT gaming plans
- What’s the plan: staff expansion of the blockchain team (from current 15 to as many as 70–100 by year-end) + acquisitions + launch of playable games (+ will be giving existing game teams, e.g. FarmVille, the option to opt in our out of any NFT plans). However, it’s also interesting to see that Zynga pointed out that ‘things are really frothy right now’, and that they were looking at the cycle, and figuring out whether they would like to jump in
- Catching up to other game studios: Ubisoft has especially been embracing towards NFT/metaverse, having launched its first in-game NFT in Dec’21, investing in Animoca Brands, and also bringing some of their game characters into The Sandbox (in which they already own a pretty big real estate)
OnlyFans launches verified NFT profile pictures, closely following Twitter’s decision to launch verified NFT profile pictures on its platform (anyone has the hexagonal profile pictures?)
Crypto Superbowl Ads
- It wasn’t an overstatement to say that Super Bowl = Crypto Bowl, with the following crypto features/references in the ads: Coinbase, FTX, e-Toro, Nouns NFT/Budlight
3. Raises
OpenSea launches venture arm, NFT ecosystem grant programme
- More about OpenSea Ventures: it will be backing companies and projects across the market for non-fungible tokens and Web3 by offering capital and access to its leadership and investors. In specific, it will focus on 4 themes: new NFT protocols, social and gaming projects, and NFT aggregators
- So far, many crypto projects/protocols/companies have launched their own venture units/ecosystem grants to try to gain increased exposure/influence over NFT/metaverse space. Some examples include: FTX, etc.
Animoca x Brinc Launch $30mio Guild Acceleator Program
- What’s the Guild Program: the program will fund up to $500k/guild, with priority for projects with focus on sustainability and giving back to player/scholar communities. And what is a crypto gaming guild? These are usually DAOs that offer users the necessary funding and tools needed to play blockchain-based games, as some games have relatively high barriers to entry, e.g. Axie Infinity. In return, the guilds will take a cut of the earnings made from playing the P2E game. The most prominent guild so far is YGG, which successfully launched its token in Jul’21, which focuses on Axie Infinity, The Sandbox, and League of Kingdoms.
Galaxy Fight NFT (cross-IP, cross-platform PvP fighting game) raises $7mio from Animoca Brands
RareRound closes $1M Seed Round from Mechanism Capital and County Capital
- What is RareRound: cross-blockchain NFT gaming platform, which allows players to bet any of their NFTs from any NFT collections while playing casual games, e.g. poker, Blackjack, etc.
