It was a wild rollercoaster ride last week, as Yuga Labs stole the spotlight with their Otherdeeds land sale. Featuring the likes of ApeCoin and even Elon Musk, the Bored Ape saga continues with its fair share of drama and controversy. Read on as we dive into what happened last weekend, as well as other interesting trends in the NFT scene that have caught our attention.
Return of the Bored Apes
Otherdeeds Mint
OpenSea Daily Volume (Source: Adapted from rchen8)
While NFT volumes have remained fairly stagnant over the past month, the highly-awaited Otherdeed land sale boosted volumes on OpenSea by a substantial margin. While average daily volumes usually sat around $150 million, the Otherdeeds land sale generated a massive amount of secondary sales on the NFT marketplace, quadrupling the volume on the day of mint to well over $500 million.
Source: OpenSea
The land sale was only open to wallets that have performed the necessary know-your-customer (KYC) procedures, thus making it more coveted by others who had failed to get in. On launch day, floor prices on the secondary markets reached up to 10 ETH, easily 4 times more than the mint price of 305 ApeCoins. However, prices have since dropped to approximately 2.8 ETH (~$6,500).
We're sorry for turning off the lights on Ethereum for a while. It seems abundantly clear that ApeCoin will need to migrate to its own chain in order to properly scale. We'd like to encourage the DAO to start thinking in this direction.
— Yuga Labs (@yugalabs) May 1, 2022
The surge in volume on May 1 sent transaction fees on Ethereum spiking to over 8000 gwei, costing users thousands of dollars just to mint or purchase one of these lands on the secondary market. While many users pointed out the minting contract’s unoptimized code as being the culprit behind the insane gas wars, Yuga Labs took this as an opportunity to hint at the creation of a new blockchain for future sales. However this has since been refuted by ApeCoin DAO board member, Animoca’s Yat Siu. Instead, ApeCoin went ahead and integrated with Polygon amidst the backlash from their NFT mint and ApeChain speculations. Shortly after the big hooha around Otherdeeds land sale which saw a record-breaking number of failed transactions due to clogged network, Yuga Labs refunded the gas fees to all the wallets that failed in minting.
ApeCoin Price Source: CoinGecko
The Otherdeeds mint created a flurry of demand for ApeCoin (APE) that fuelled the coin’s surge towards its all-time high at $25.97, just before the mint. The high-profile mint raked in a whopping 16.7 million ApeCoin (valued at $317 million), all of which will be locked in ApeCoin DAO’s treasury for a year.
ApeCoin is legit voting to give away like 20% of supply in 'fake staking' program merely days after Yuga floated the idea of an Ape-led L1 or L2
— Cobie (@cobie) May 4, 2022
Lmao
No discussion on whether that supply might be useful for -actual- staking if an L1 or L2 was built
Just "moar coinz vote yes" https://t.co/IsF3QSjQ6l
Surprise Staking Proposals
Following the mint, highly-controversial ApeCoin DAO proposals AIP-21 and AIP-22 both passed governance with a landslide, with over 90% of votes in favor. Both proposals are in relation to allocating a significant portion (17.5%!) of the ApeCoin supply for a staking system, one that would allow BAYC NFT holders to earn and accumulate even more ApeCoins through staking.
This is in particular even more alarming considering that Yat Siu had just publicly denied the possibility of an ApeChain (at least for now) - which means ApeCoins staking won’t likely be utility-based as in the case of validating proof-of-stake chains. Instead, this has been criticized as merely a ‘bribe’ to disincentivize existing hodlers from selling. Remember that the supply of ApeCoin is limited, and the same funds could otherwise have been put towards future product improvements, new offerings, marketing, partnerships and more.
More importantly and interestingly, this alludes to an underlying problem of DAOs. Token holders would often vote in favor of self-interest, even over that of the overall project. In the case of these ApeCoin DAO proposals, there is practically little to no reason for ApeCoin holders, who are incidentally also mostly BAYC NFT collection owners, to vote against them (imagine voting “no” to free money). Rather than leveraging the collective intelligence and resources of stakeholders to build and direct a project, this effectively turns DAO proposals into populist tools that best serve the financial interests of the majority. That is not to say that DAOs are not capable of effective governance, but it is worth acknowledging the flaws and loopholes they entail. Time will tell if ApeCoin DAO can deliver on the promises of ApeCoin utility in the future, especially now with a shrinking treasury.
Another controversy that struck in the aftermath of these ApeCoin DAO proposals was the floor price of MAYC. AIP-21 proposed staking caps in the ratio of 5:1 for BAYC:MAYC which drove down the perceived value of MAYC relative to BAYC, right down to ~22 ETH on 6 May. which is just about a fifth of a floor BAYC. Previously, a BAYC was only trading around 3x the price of an equivalent MAYC.
Elon Musk Sideshow
An interesting sideshow came a few days later, when Elon Musk changed his Twitter profile pic to a collage of various Bored Apes, the price of ApeCoin pumped from just over $14 to almost $18. Michael Bouhanna, the co-head of Digital Art Sales at Sotheby’s, and also the creator of the collage, was quick to respond, requesting Musk to remove the profile picture. The price of ApeCoin retraced below $16 soon after.
@elonmusk as much I admire your work I’d like you to remove your pfp that I created for our Sotheby’s sale. Or you credit me 😂. Happy to send you the original file minted with the buyer approval 🫡 pic.twitter.com/e83ZyxWGH5
— Michael Bouhanna (@michaelbouhanna) May 4, 2022
With the land sale now fully completed and all of the Otherdeed lands fully revealed, some featuring extremely rare Kodas, our attention now turns to Yuga Lab’s future plans, including their controversial staking program. While some might expect Yuga Labs to have a solid plan for their recently acquired CryptoPunks and Meebits collections, they have been relatively quiet. Although these 2 collections were featured in the Otherside trailer, one can only speculate on their roles within the Yuga Labs’ wider metaverse scheme.
Should Yuga Labs or other NFT projects choose to do another land sale, perhaps there are some lessons to be learned from this experience. Besides optimizing the smart contract to lower gas consumption for minting, having a reservation system similar to how Parallel and Arbo. Alternatively, in case the project is extremely hyped, the team may want to opt for a closed raffle instead, limited to verified or participants who have performed the necessary KYC procedures. These methods would help avoid clogging up the blockchain, while also preventing costly gas wars amongst bidders.
Top Collections of the Week
Source: OpenSea; Snapshot taken 6 May 2022
It is no surprise that the Otherdeeds have completely dominated OpenSea, racking up over 228,000 ETH in trading volume, well over $638 million in secondary sales. As it stands, 3 of the top 5 projects are all owned by Yuga Labs, and we believe this will continue to be the case, at least in the short term.
Azuki’s derivative project, BEANZ, has also proven to be a strong hit, with trading volume rising by 300% in the past week. With several old and new anime-styled projects doing well. ore upcoming NFT releases may well try to emulate this formula, but be cautious that “rinse and repeat” rarely works. New projects should be exploring more exciting mechanics / utility that would appeal to the wider NFT crowd.
Since then, Azuki has been mired in controversy after Azuki founder, ZAGABOND, admitted to also being the team behind Phunks, Zunks, and Tendies - projects that were allegedly rugged. The floor price of Azuki plunged to ~7 ETH at its lowest, down from its previous floor price of ~16 ETH, a jaw-dropping >56% drop.
Azuki news that Zagabond and co. built Phunks, Zunks, and Tendies prior to Azuki is interesting
— bender (@0xBender) May 9, 2022
It reinforces my feelings that a team does not create a blue chip, the market does. The only thing a team or person can do is provide enough puzzle pieces for the markets decision👇🧵
In the wake of Otherdeeds’ record-breaking sale, the recent capital influx also lifted the floor price and trading volumes of blue-chip NFTs such as Doodles and CloneX - perhaps a sign of investors punting on other blue-chip projects following the trajectory of Yuga Lab’s collections (especially for those who failed in minting Otherdeeds), or derisking into more reliable NFT projects as a hedge against market downturn.
What else are we paying attention to
1. Solana NFTs are Okay
Late last month, Solana NFT collection OkayBears topped OpenSea’s charts in volume traded, marking it as the first and only Solana project to top Opensea’s 24h rankings chart. This heralded the advent of Solana as a contender in the NFT market, which has thus far been dominated by Ethereum.
Source: CryptoSlam
Solana NFTs have been on the rise since OpenSea integrated support for the blockchain. OpenSea, by far the most active and well-known NFT marketplace, enables greater accessibility and outreach of Solana NFTs especially for the less crypto-savvy retail traders, bringing in a new injection of capital into the blockchain. Total sales of Solana NFTs have surpassed $2 billion to date, behind only Ethereum and Ronin.
An interesting phenomenon that has cropped up is the constant gap in floor price between OpenSea and MagicEden. For instance at the time of writing, OkayBears is trading at a floor price of 146 SOL on Magic Eden, but 129 SOL on OpenSea. Such arbitrage opportunities between OpenSea and native Solana NFT marketplaces have been consistent, a sign of inefficient markets that can potentially be capitalized.
2. Waifus never die
Could we see the revival of the anime profile pic (PFP) trend? Over the past week, two prominent NFT projects were launched, both using fairly similar methods. The first of the two projects, Ragnarok, started its Dutch Auction at 0.77 ETH, or approximately $2,200. The sale was open to the public for 24 hours before whitelisted users could begin minting. The launch was a huge success, with all 3900 units sold out at the auction's starting price.
Similarly, Phantom Network, also known as Project PXN, kicked off with a public Dutch Auction for 4000 units from their Ghost Division. Although the starting price for each unit was much higher than Ragnorok at 2 ETH, it was promptly sold out. Both projects are currently sitting on a floor price of around 2.7 ETH (~$7,800) on OpenSea and other secondary markets, and have yet to be revealed as of the time of writing. We expect to see lower prices once the collections are revealed, which presents a perfect opportunity for anyone eager to pick up the dip.
3. Art Blocks back on the menu?
Interestingly, from 6-7 May 2022, there was also a short-lived mass influx into ArtBlocks Curated that saw its volume shooting up by more than 3x - the same period when PFP projects such as Otherdeeds and BEANZ were bleeding in volume. Many within the NFT Twitter space dubbed this as the beginning of the “Great PFP Migration” but alas, the serendipitous moment was fleeting and just as sudden as its arrival - attention on ArtBlocks swiftly faded as its volume plummeted by ~85% the next day.
This article was produced in collaboration with Khor Win Win. You can also follow us on Twitter:
Win Win (@0x5uff3r)
Dillon (@Dill_Farmer)
Dillon is an Operations Associate at CoinGecko with a weakness for 3-digit APYs. As an ex-consultant, he now finds joy in laughing at consulting memes unironically.
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