NFT Update

  • After last Thursday’s bullish hammer on SPX and NASDAQ + double top on VIX after gapping higher + false breakout on gold, market’s been consolidating. However, the fact that bitcoin didn’t make news lows despite SPX and NASDAQ aggressively selling off make us bullish in the short-term.
  • In terms of price action, BTC (+16%) had strong rally on Monday, and it’s performing the broader market (ETH +12%, BNB +10%), with the exception of LUNA (+71%), NEAR (+28%), and Cosmos-related tokens ($JUNO, $OSMO).
  • Ruble trading pair volumes surged on Binance + big premium for BTC/UAH
  • On the derivatives fronts, funding rates still pretty flat (3d annualized funding rate BTC -0.5%, ETH -0.5%). However, on the options fronts, put/call ratio of BTC and ETH diverging, with ETH ratio quite a bit lower than that of Bitcoin’s
  • OpenSea volume (Chart 1, 2) and transaction count (Chart 3) are both normalizing from blockbuster performance in start of the year — Feb’22 set the 2nd most monthly trading volume of $3.58bn
  • As a function of tapering off of interest, NFT prices are also normalizing (Chart 4, 5, 6). Floor prices of 4 blue-chip NFT projects we closely monitor (CryptoPunks, BAYC, Artblock, Meebits) have mostly fallen further
Chart 1: OpenSea Daily Transaction Volume (Blue, Bar) and 7dma (Orange, Line) in US$
Chart 2: OpenSea Monthly Transaction Volume in US$
Chart 2: OpenSea Monthly Transaction Volume in US$
Chart 3: OpenSea Daily Transaction Count (Blue, Bar) and 7dma (Orange, Line)
Chart 4: Floor Price of Selected NFT Projects in ETH
Chart 5: Number of NFT Projects (from Zeneca) with Increased ETH Value (Orange) and Decreased ETH Value (Blue)
Chart 6: Net* Number of Projects With Increasing ETH Value
Chart 7: CryptoPunks vs. BAYC Floor Price
  • Why it matters: vampire forks have not differentiated their competitive advantages/USP aside from airdrops and rewards, and effectiveness of their challenge still seem quite limited given non-fungibility constraint of the marketplace, resulting in naturally narrower liquidity/room for liquidity fragmentation (vs. fungible tokens). As such, with halvening of emission on Feb 9th, trading volume has dramatically decreased, and APR now stands at ~186%, with token price @ 1.42 (MC: ~$350mio, FDV ~$1.5bn). However, volume has become more organic (ref to Chart below) + next emission halvening only on May 10th + bullish-looking chart = buy the dip as tactical play. Parallel = Nov’20 Sushi after initial vampire attack
Daily Trading Volume of OpenSea vs. LooksRare
Daily Zero Royalty Volume vs. Remaining Volume
  • What is Shibuya: web3 video platform allowing users to engage, fund, vote on the outcome and become owners of long-form content. The first webseries to launch on Shibuya will be ‘White Rabbit’, by director Macije Kuciara. During the series, the show’s main character will come across 2 doors, and users can mint a Producer Pass (an NFT which helps fundraise the production) and stake it in the door, deciding on the fate of the character. As staking reward, users earn $WRAB token, an ERC20 token which represents fractional ownership of the show.
  • Why it matters: Majority of media production (music, film/show production, etc.) has been done by centralised labels that take on more of VC-model in which the labels pool the risks of multiple projects, and directors/artists traded most of their economic upside for downside protection. This model is being challenged with Shibuya.
  • Previously, they added BTC & ETH (very small) to their balance sheet.
  • According to the company announcement, the marketplace will cover areas such as sports and entertainment, including music and anime.
  • What’s the deal: ‘21-current NFT mint boom is likened to ‘17-’18 ICO boom in which a vast majority of projects were mere cash grabs, and there were ~zero deliverables by the projects. Pixelmon, an NFT project, was pitched as an open-world RPG NFT game inspired by Pokemon and Minecraft, and did aggressive marketing. On 2/7, Pixelmon conducted Dutch auction-style mint at mint price of 3 ETH, raising total of ~$70mio. The metadata reveal on 2/25 featured hilariously poorly-made NFTs — refer to this thread for rundown!
  • What is UkraineDAO: Some members in the crypto community felt that it was a good opportunity to show that Web3 and cryptocurrencies could help the current situation (instead of rugging people), and earn brownie points from rest of the world. Specifically, Russian punk rock group Pussy Riot, alongside Trippy Labs and PleasrDAO, formed a DAO (UkraineDAO) to use the “power of web3 tech and community to raise funds for Ukrainian organisations”
  • What are they doing: The DAO is currently accepting donations (1. Donate to UkraineDAO.eth, or 2. Participate in 1x1 party bid) NFT drop consisting of 10,000 Ukrainian flag NFTs minted on Ethereum, with all proceeds benefiting the Return Alive Foundation and NGO Proliska
  • Aside from UkraineDAO, Polkadot and Tron founders also petitioned government officials to accept their chain’s respective native tokens; Tron donated $1.2mio in USDC, whilst Polkadot founder Gavin Wood donated ~300k DOT to Ukraine
  • What’s the rug: Sotheby’s was poised to host what could have been the largest NFT auction ever of 104 CryptoPunks (dubbed ‘Punk It!’). However, pseudonymous collector 0x650d tweeted that he decided to not proceed with the auction (perhaps because the bid was not good enough?). Sotheby’s charges sellers 10% standard commission (and buyers 14–25% premium).
Chart 1: NFT — Blockchain
Chart 2: NFT — Games
Chart 3: NFT — Others

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