There’s blood in the NFT streets. Multiple factors are to blame, including the broader downturn in the equities market, the accompanying slide of cryptocurrencies, increases in inflation and the consumer price index, the Federal Reserve raising interest rates in the US, the collapse of Terra, and the massive missteps made by Azuki. It’s not all doom and gloom, though — where some people see misfortune, others see opportunity.

Right, let’s get straight into it!

DYOR 🧐

If you were holding an Azuki NFT last week, you were probably feeling relatively pleased with yourself. A week ago, the floor price was 26 ETH, it was seen as a “blue chip,” and there were persistent murmurs that it had all the makings of “the next Bored Ape Yacht Club.” Then, as is often the case in NFT Land, everything changed… and fast.

Pseudonymous founder Zagabond published a blog post revealing he was behind Phunks, Tendies, and Zhunks — three projects most people consider rug pulls (that is, projects that make a bit of money, only to see the founders disappear with their loot, leaving holders in the lurch).

Why would anyone — let alone the leader of a wildly successful project — willingly reveal their role in dubious projects? Well, the rumor mill suggests Zagabond was left with little choice and, had he chosen not to speak up, someone else was waiting in the wings, ready (and threatening) to do so.

In the wake of the news, Zagabond participated in a Twitter Spaces where he prevaricated, ducked, dived, and dodged when it came to accepting responsibility for his previous projects. Zagabond claimed each project was a learning experience and that he carried those learnings into Azuki.

Inevitably, a slew of “learning” memes followed, and the backlash from the community was immediate and fierce. Throw in pretending to be the female lead on one of his failed projects and using different names for each project so buyers wouldn’t connect the dots, and you have a surefire recipe for opprobrium.

The immediate result of Zagabond’s revelations was Azuki’s floor tumbling to 9.5 ETH, influential players publicly decrying the project, and NFT Twitter lighting up with discussions about why having doxxed founders might one day be essential for big projects.

Thanks to the nature of NFT projects, there was a curious side-effect to all of the market action, though — the Azuki team made a killing from some holders exiting their positions thanks to the percentage they realized from every secondary sale.

Remarkably, though, Azuki has recovered somewhat. At the time of writing, the floor price is 15 ETH. That’s largely thanks to Zagabond handing over the smart contract for Zhunks to its community and his decision to return ETH to Phunks holders.

Can Azuki recover completely and reclaim its position as a bona fide blue chip? That’s likely going to require Zagabond stepping aside and the community remaining loyal and committed. But stranger things have happened, and with plenty of bag holders having plenty on the line, it’s not inconceivable that there are plenty more chapters yet to be written in the book of Azuki.

🗣 Who speaks for the speakers? 🎙

Sounds rare 🎧

Art of the Matter 📢

On Monday, our weekly Twitter Spaces series will see hosts Jessica Angel and Craig Wilson joined by NFT OG Robness and artists Gerardo Cotera and Collin for a discussion on “trash art,” the virtue of being timeless vs. trendy, and ignoring the zeitgeist while inadvertently shaping it.

Head over to the tweet above to set a reminder, or set one of your own on the calendar or mobile device of you’re choosing, and tune in at 6 p.m. ET / 3 p.m. PT.

Probably nothing 🤔

Spatial x Ready Player Me 🥽

Virtual gallery, office, and general-hangout space creator Spatial has partnered with Ready Player Me to empower real people to bring more representative versions of themselves to the metaverse.

Spatial now supports full-body avatars across not just Ethereum but Polygon, too. The partnership will also make it easier for creators to sell NFT wearables and fashion to Spatial users, and while we tend to favor being someone new in the metaverse, we can see the appeal of being able to create a cross-chain avatar that represents one’s real-world self.

It’s even more appealing when you see how slickly Spatial pulls it off. Its service works just as well in a web browser or on mobile as it does in VR. That’s no small feat.

Instagram x NFTs 📷

The image-sharing network that arguably ruined when Facebook acquired it is adding support for sharing NFTs. At launch, NFTs on Ethereum and Polygon will be supported, with Flow and Solana set to follow in the coming months.

Supported wallets include Rainbow, Metamask, and Trust, and Instagram says Coinbase, Dapper, and Phantom will be added soon. No matter what you think of Facebook/Meta, this is a good sign for the NFT market more broadly. More visibility and mainstream support mean more eyes, and that’s likely to translate into more interest in (and money flowing into) the sector.

Fortnite with monkeys 🐒

BAYC’s Otherside showed off a demo of its forthcoming game, “First Trip,” and reactions were, well, mixed, to say the least.

Some fans were enthusiastic and bullish on what’s to come. Others suggested the demo could easily be cobbled together in Unreal Engine and amounted to little more than a Fortnite ripoff featuring simian protagonists, which is a welcome reminder that, at best, you can only please some of the people some of the time, and your odds of doing so tend to dwindle in nearly direct relation to the size of your audience.

Bag boosters 💰

The week that was (May 6 - 13, 2022) 🗓

Given the buzz about Azuki this week, it’s little wonder it’s topped the chars when it comes to trade volume. It’s similarly unsurprising that its offshoot/airdrop project, Beanz, grabbed fifth place.

At the same time, Bored Ape Yacht Club and its derivatives (along with Clone X and Moonbirds) have no doubt benefitted from those fleeing Azuki for other blue chips.

🪡 Thread of the week 🧵

Goats only 🐐

Whether you’ve never owned an Azuki or all of your net worth is tied up in the project, you should be watching or listening to Goats and the Metaverse.

In each episode, collectibles OG and entrepreneur Stan “The Goat” Meytin and Metaversal co-founder and CEO Yossi Hasson talk about digital and IRL collectibles, NFTs, and the week’s news worth knowing.

This week, they unpacked Regulars, the sleeper NFT hit that’s suddenly seeing action after six months of being pretty dormant, went in-depth on the Azuki chaos, gave their take on PxN: Ghost Division, and provided an explainer on generative art. Check out the latest episode here:

Aside from providing invaluable insights into digital art and collectibles, Stan and Yossi are also putting together a collection of NFTs dubbed “The Goat Vault.” When the show hits 5,000 subscribers on YouTube, one of those lucky subscribers will win the contents of the vault, which, at last count, was valued at over $32,000.

Prefer listening? Check out Goats and the Metaverse on Apple Podcasts, Spotify, Anchor, or wherever you get your podcasts.

LFG 🎉

Get ready to run 👟

In recent months we’ve been hard at work bringing an incredible project to life with the brilliant minds behind Clubhouse Pictures, the production house responsible for blockbusters like The Hunger Games, Birds of Prey, and I, Tonya. The project is called Runner, and it’s going to upend how Hollywood thinks about IP.

We spoke to production executive Bryce Anderson about why Runner is a perfect fit for web3, the unique virtues of involving the audience from the outset, and why Clubhouse Pictures decided to work with Metaversal. Read the full interview here.

Money <> mouth 💸

Each week we’ll offer you a look at an NFT project we’ve invested in and the motivation behind it. This week we’re looking at “Celestial Collisions #538” by Chris Reid.

The project was limited to 800 editions and was released on generative art platform fx(hash) last December. Reid’s rationale for the work is as follows:

We love this idea, and we suspect it’ll be especially poignant when we look back on the NFT market in decades to come: what seems inconsequential to many now may well turn out to be seismic.

IYKYK 😉

Until next time, see you in the Metaverse.