NFT God Newsletter - The Daily Alpha 5/3/22

The Daily Alpha 5/3- A daily breakdown of the NFT market with some notes from The God. This is a more detailed version of my breakdown on Twitter. Any and all feedback is welcome!

All Bored Ape Assets Dipping

From the moment Otherside started revealing yesterday all Yuga Labs assets have been dipping. There are probably several factors behind this. There are always post reveal dips. BAYC and MAYC intrinsic value has objectively lowered since you can no longer claim land with them. APE coin can no longer be used to mint. Even with all these factors involved, I wonder how much the botched mint has to do with the dip. This is probably the first real black eye in the history of Yuga. I feel like this weekend has subtly shifted the perception of the company from a web 3 native social movement to a VC backed corporation. While I’m sure this event won’t send this project to 0 over night, I’m really interested to see if the change in perception stops the organic growth that’s been happening over the past year. Growth will still happen when new asset drops are announced, but I sincerely wonder if the same kind of consistent natural growth will keep happening now that there’s a negative sentiment in the general NFT community about the company. This might be an opportunity for another blue chip project to become a community darling.

Azuki and Beanz Find New High

Speaking of potential new NFT community darlings, Azuki and its companion collection Beanz has started ripping to new highs of 30 ETH and 6 ETH respectively. A number of factors can be impacting this. I’d imagine the biggest is Otherside minters who sold quickly are rotating profits into other blue chip projects. I’m also curious if Azuki has taken the spot of community favorite project now that Yuga had their first major misstep. Despite both projects being run by founders who would love to make as much money as humanly possible, Azuki might be gaining favor among the broader NFT market. Either way, it’s become clear that value always rises to the blue chips. While many small and medium cap projects continue to recover, the blue chips like Azuki, Doodles, and CloneX continue to find new highs. Buying these less known small cap projects is pure gambling at this point.

What’s Next For Otherside?

It’s going to be interesting to see where Yuga goes from here. Over the past year Yuga has done a generally good job releasing new assets to keep hype and momentum going. Apes were air dropped kennels, then serums and mutants, then APE, and now land. Koda’s will undoubtedly be airdropped soon, but what’s next? Clearly all the assets are now tied into this new video game experience. After reading through the website there’s honestly some really impressive technological functionality being promised. Up to 10,000 people interacting in the same game instance at the same time. Spatial vocal communication. Total interoperability. It might just be marketing at the moment but at the very least the marketing looks impressive.

All this evolutionary technology will unfortunately take years to release though. I can’t imagine a scenario where over the past year of Yuga being in existence they were able to pull off this technological marvel. The question becomes how do they keep the value coming to holders? My guess is a mini P2E game with the lands and resources. Rumors of a marketplace will probably come to fruition with the ability to trade artifacts, kodas, and resources. The concern then becomes can they balance a delicate P2E economy and keep the game interesting? Up until this point no P2E game has been able to balance their economies. Coins have been inflated to 0 which sunk the entire project. APE is the first NFT coin to bring in speculators at scale, which might stop the coin from being dumped. But Yuga’s next move, especially after this botched mint, will be its most critical move yet.

Project I’m watching: Vayner NFT’s going into Veecon

With Veecon coming up in 3 weeks I’ll be watching how this event impacts the Vee Friends ecosystem. Prices at the moment are very low (relatively speaking) for both Veefriends series. If you think the Gary Vee hype machine will keep rolling now is the time to make the bet. If he is interested on keeping prices and volume high and therefore money flowing into his pocket, he will probably be making some sort of utility announcement leading up to the big event.