Uptober?
(Any views expressed in the below are the personal views of the author and should not form the basis for making investment decisions, nor be construed as a recommendation or advice to engage in investment transactions.)
Gm all. We’re back with another week of the latest and greatest in all things NFTs and jpegs. Unlike the last few weeks, it seems we’ve finally got a ton of news and new narratives shaping up as of recent. Tl;dr, October has been significantly more eventful than September. While most projects are trending down (still) this was a big week for new mints, P2E projects, and overall news. With ETH essentially flat in the $1300 range all week (as of writing this), the market seems to have stabilized, at least temporarily. However, while your favorite NFT influencer is tweeting threads about how we’re entering a new bull, we are certainly far from good times. October should continue to play out as one of the more interesting months of this bear market. A ton to cover – lets dive in.
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NFTs in the News
X2Y2 launched a lending program
Three Arrows’ CryptoPunks and Other 'Starry Night' Ethereum NFTs Set to Be Liquidated
Fidenza artist Tyler Hobbs has a new idea: buy now, mint later NFTs
JPEGs Are 'Not the Future of Web3 and NFTs': Polygon Studios Metaverse Lead
Rare David Bowie NFT Collaboration With FEWOCiOUS Sells for $127,000
Japanese prime minister says gov't investment in digital transformation will include Metaverse, NFTs
Dapper Labs suspends Russian accounts after new EU sanctions
OpenSea CFO departs after 10 months in the job
Visa partners with FTX in a bet that shoppers still want to spend cryptocurrencies in a bear market
Market Overview
If you remove the Punk sales from the other week and the QQL mint, we’re essentially flat week-over-wee. At least it’s better than being down 😅. After reviewing this data, it’s interesting to see that X2Y2 continues to take more share and Sudoswap is neck and neck with LooksRare. Nothing too fancy here, same old bear market.
Chart: Nansen
With ETH’s continued uneventful price action, we’re seeing a bit more stabilization in the NFT market as new mints come alive again. Especially with the lower price in USD, minting a project these days essentially costs what we paid for gas fees alone in the bull market. That being said, overall volume in USD is absolutely abysmal if we compare this to the bull. Tweet below is a nice reminder of where we were.
Blue Chips
Another week of a whole lot of nothing for blue chip PFPs. These projects simply are refusing to go lower and continue to prove that they’re backed by cults of diamond hand holders. Can’t sell your identity right?
Apes and Mutants continue to show an extraordinary amount of resilience. Both are flat week-over-week in the 80 and 15.5 ETH price ranges. It’s been almost a full month now with little movement here. The Yuga assets are either forming a medium-term bottom or gearing up for the next leg down. Most likely the former if ETH PA stays this way.
Doodles ticked up slightly this week holding strong above 8 ETH and Azuki continues to have solid volume slightly above their 10 ETH floor. Both projects have had a nice comeback. Moonbirds are also holding around their 10 ETH floor with low volume and little news.
Clone X was the play of the week, going from a 6.5 ETH floor to above 9 now after their announcement of their Project Animus airdrop. Clone PA is looking very good as these have been faded for quite some time, always seen by many as a lesser PFP than Doodles/Azuki/MBs. That being said, the momentum is clearly behind them now and RTFTK is showing that they are one of the most competent teams in the space.
Finally, another rough week for Penguins. They were flipped by Cool Cats (CEO change and Animonica announcement) and continue to trend down to 2.8 ETH, now 25%+ from their ATH. We’ll have to start including Cool Cats in this update if this continues. The primary thing to note here is that Penguins have just abysmal volume. The floor from 2.8 to 3.5 is extremely thin, but with only 4-5 OS sales a day they’re being undercut down. Pengs will most likely continue to range until the winter (Penguin season).
Last Week In Review
A ton to cover with all of the news last week – we have a bunch of opinions on these various topics.
First of all, paid mints are definitely back. Deep Objects sold out a 10,000 supply collection in under 10 minutes (.05 mint price) and is flying on secondary well above floor at time of writing. Helix Mint Pass (.1 mint price) sold out a 5,000 supply in under an hour and is sitting around a 2x a few days later, hitting a .26 floor. Our private discord holders received WL to both. With the *free mint meta* all but dead at this point, October has been a month where paid mints are making a comeback. We’re also seeing paid mints on AVAX (Joepegs) that are minting out in under 5 minutes. While there are still a ton of projects unable to mint out and we’re all watching etherscan transaction speed while the mint is occurring, we’ve gone from the crowd saying paid mints will never come back to them leading the charge for this month's narrative.
RENGA is still holding steady in the limelight. While down from its ATH of a 3 ETH floor, all of the dips in the low 2 area are still getting eaten up pretty quickly. RENGA is continuing to solidify itself as one of the top PFP projects out there, and has certainly been the best new project this fall in the bear market.
DeGods made an announcement that they are moving to 0% royalties. We expect this to become more and more prevalent in the coming months. With 0% royalties, projects have to find a way to bring in revenue without relying on trading fees. This differentiates projects that are building brands and businesses and ones that are just another PFP ponzi. From our very own Chuck Banister, “we need to move away from this model where you need a ~10-12.5% move upward to break even on a sale. It completely hamstrings liquidity". Outside of art-led projects, we're fairly confident that all successful projects in the future will implement 0% royalties if they intend to grow a real business.
We did a WL giveaway with Degenheim last month and have covered this one a few times so far in this newsletter. Probably the #1 or #2 most exciting new mint since RENGA. Their dutch this week for the 250 auctioned Degenesis collection went for 2.5 ETH (details below), already starting off hot at a 3 ETH Floor. We always talk about projects that don’t make big promises with their roadmap and instead already have a significant portion built out pre-mint. The trailer looks like a ton of fun and the team clearly doesn’t need funding from the mint to finish the rest. Projects like these that already have A+ partnerships (CyberKongz and OpenDao) locked in pre-mint and are building behind the scenes are great signs to look for when assessing which projects to buy into. There’s a super impressive investor deck in their discord that we’d recommend checking out as well. Plus, gaming is THE hot area right now anyways. Looking forward to seeing this one play out.
Moving on, let’s talk more about the P2E meta, which seems to be coming back with a vengeance. Wolf Game has made an absolute come back with a 2x off the bottom. WG is a good example of a project that has been building in silence for months with no attention and is suddenly coming back leaving the doubters behind. This is spilling over into projects like gardenlockdown which was trending this week and Beep Boop Botz which has climbed from a sub .02 ETH floor to .13 in around 10 days. P2E is interesting since most projects are the same ponzi, but the few that master this (if it’s even possible) will garner all of the attention and make a lot of holders very wealthy.
Final thoughts here – this is something that’s definitely been striking a nerve recently. We discussed overhyped projects a ton in the bull market, but we want to review the topic as we see “hype” coming back for many new projects now. Something to keep in mind when reviewing projects that have a ton of followers and engagement is that most of this is fake. In order to register for most whitelists these days, you have to use Alphabot which will require you to like, follow, RT, and sometimes even comment just to enter the giveaway. While this isn’t necessarily good or bad, it certainly drives *fake* engagement to a ton of projects. Many of these projects mint out and are super successful, while others with 100k followers like Snegeds turn out to be absolute failures. Having a high level of skepticism when doing analysis is very important in this space and follower/discord member count certainly does not solely indicate whether a project will be successful. As a matter of fact, most of the successful new mints are in the 20-50k follower range, with very few above 80k. While some overhyped projects become a good quick flip, our approach has always been finding diamonds in the rough or projects before they become super hyped (Lost Realms is a good example. Always err on the side of caution when a new PFP has a ton of followers and engagement.
Conclusion
A lot of news this week and way more than we can cover. P2E and paid mint metas are back and expect to see a ton of new project announcements throughout October. Market overall still sucks but there’s way more opportunities now than what we were experiencing in September. Being quick while remaining liquid is still the name of the game. Let’s have another great week.
Cheers,
MM Team