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  • NFT God Newsletter 7/23: NFT Worlds Gets Rugged, Zeneca Hacked, 3AC Breaks Silence

NFT God Newsletter 7/23: NFT Worlds Gets Rugged, Zeneca Hacked, 3AC Breaks Silence

The Daily Alpha 7/23- Happy Saturday everyone! I'm sending this newsletter out at 10:30pm local time here in New York. If you're reading this on a Saturday night or Sunday morning odds are you're deeply passionate about the Web 3 space. Please don't take the fact that you have a passion for granted. A lot of people are born then eventually die with 0 passions or hobbies in between. The fact that you are so invested in something is rare in 2022. Lean into this and don't take it for granted. Make the most of this opportunity. Anyway, onto the alpha-

Latest Twitter Thread:

Today's News:

🔥 NFT Worlds Gets Rugged by Microsoft

🔥 Zeneca Hacked

🔥 3AC Breaks Silence

👀 Project I'm Watching: Etherjump Plots

NFT WORLDS RUGGED BY MICROSOFT

Microsoft dated itself this week by announcing NFT’s would no longer be allowed in custom versions of Mincecraft. This had rippling effects across the Web 3 space as many projects were building on NFT Worlds: a Minecraft based project. At one point having an 18 ETH floor, NFT Worlds quickly tanked below 1 ETH. NFT Worlds is a collection of 10k plots of land made out of the different elements in Minecraft. If you own a plot of land, you can actually load it up in Minecraft and explore.

At some point in early 2022 the meta was actually projects built on top of NFT Worlds. Every roadmap in February 2022 had NFT Worlds on it. Project founders were scooping up plots in NFT Worlds and advertising it as unique utility. Those other projects took big hits as well. Couple of lessons here. First, investing in projects with single points of failure is a massive risk. If anything were to happen at that single point, the whole foundation is destroyed. This could be a platform like NFT Worlds/Minecraft, or a team. For example, if a project is ran by one single guy, and that one guy gets distracted by other projects, it can impact the project you’ve invested in. I actually see this in the space a lot. One example is Look Labs with 420 Game. They were building out 420 Game then halfway through development shifted to End Game, causing both games to suffer.

Significantly more money is made on mints than with royalties, so founders will start one project then quickly shift to another in order to get more revenue. I’ve been burnt by this twice. When researching projects, make sure there is a full team behind it and multiple points of failure. One bad pivot or one piece of bad news can tank things instantly.

ZENECA HACKED

Another NFT Twitter account got hacked this week as Zeneca, head of ZenAcademy, lost control of his feed to a bad actor. The hacker immediately posted a tweet advertising a surprise free mint to his 300,000 followers. The link was obviously a scam link, as anyone who clicked quickly got their NFT wallets drained. Many were impacted, and millions worth of tokens were stolen over the course of a few minutes.

The interesting angle here was Zeneca’s reaction to the hack. Instead of apologizing and offering refunds like most founders have done, he actually asked his followers to show some accountability and learn from their mistakes. I actually agree with Zen on this one. This isn’t the first time we’ve seen this kind of hack and it won’t be the last. We as a community need to mature and learn from these mistakes that seem to keep happening. We need to be vigilant and watch out for these common warning signs:

  • Surprise mint

  • Replies disabled on a tweet

  • Metamask asks for access to ALL contents of your wallet

If you see any of these warning signs you need to question what you’re doing. Most projects at this point have denounced surprise mints, so you really shouldn’t see this often. I do believe in the future the user experience in web 3 will be improved and simply clicking a bad link won’t be enough to drain you of everything, but until then we need to do better as a community.

3AC BREAKS SILENCE

Infamous crypto hedge fund 3AC broke their silence this week in an exclusive interview with Bloomberg. In this interview they largely played the role of the victim despite taking billions from investors and completely mishandling their hard earned cash. They claimed they didn’t pull any money from the firm before it blew up, didn’t realize Luna could go to 0, and admitted to possibly not using enough risk management. Simultaneous to the interview being published, reports came out about 3AC founders pulling money out of the fund to buy 50 million dollar yachts and mansions around the world. Absolute scumbags.

The biggest lesson I learned from all of this though is I simply don’t trust crypto exchanges anymore. Popular exchanges like Voyager and Celsius (and even possibly Gemini) lent billions to 3AC and did very little vetting of how that money would be used. They used the interest from these loans to power their “earn” platforms where by lending the exchange your crypto, they paid you exorbitant interest back. It was just bad loans powering bad loans powering bad loans. And the whole tower collapsed starting with 3AC. These companies we put our trust into are just as degen as the people you see on Twitter. I immediately pulled all my money out of the Gemini Earn platform where I was making 6%. If something feels like it’s too good to be true, it probably is. Any crypto I buy from an exchange I’m immediately withdrawing to my hot wallet. Hopefully this bad behavior won’t return with the next bull run. The 1.5% you’re getting from your savings account in your bank might not seem like a lot, but at least it isn’t powered by a Ponzi scheme.

Project I'm Watching: Etherjump Plots

I continue my search for projects that are doing anything but staking, and my latest discovery is Etherjump Plots. Now before you go running to Opensea to buy one of these I am in no ways endorsing this project. I don't own any of the NFT's and I don't plan on it anytime soon, I just want to talk about what they're doing different and how this might have a positive impact on the space. I truly believe the only way we have another bull run is if we start getting innovation in the code, rather than the marketing, and Etherjump is innovating in a couple of ways. By buying a plot you are able to build your own 2D side scrolling game that will live on the blockchain. Other users can then play your custom game either on their site or on the Opensea listing. I love projects who's utility allows users to express their own creativity. I especially love it when it's built in a way for others to experience that creativity. I think this concept of allowing holders to create unique digital experiences is a lot more valuable of a way to get people to hold rather than staking. Staking provides no experience, and is just ponzinomics disguised as utility. While I still need to see a roadmap and future plans for this project before I invest, I believe we as a community should start expecting this kind of innovation out of our projects.

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