It’s been an interesting week for NFTs and Cryptocurrency but the two main stories to flood the news are the catastrophic Otherdeeds launch and the supposed death of the Azuki Collection. Users have not been shy about sharing their opinions and it has shown that there is a real sense of unrest and unhappiness. We’ve rounded up all the important facts from both so that you are up to date on what’s happening – check it out now.
The Otherdeeds Launch Disaster – What Actually Happened?
The Bored Ape Yacht Club’s Otherdeeds NFT collection has been subject to some serious controversy this week after going live at the end of April. The plots were put on sale for 305 ApeCoin and as a result, there was huge pressure on the Ethereum blockchain causing a lot of gas fees. Users were quick to vent their frustration and it soon emerged that many people had spent thousands of dollars and had not been able to secure the NFT plot.
Analysis suggests that over 120 million dollars were spent on gas fees alone, and many of these users then went on to experience a failure in their Otherdeeds transaction, leaving them empty-handed. The vast number of people trying to complete their transactions also caused Etherscan to crash and other Ethereum using services experienced a significant slowing of transactions.
Yuga Labs was quick to apologise and shared, on Twitter, that they would be refunding the gas fees of anyone who couldn’t complete their transaction, a move that pleased those who were out of pocket. Four days later, Yuga Labs confirmed via Twitter, that they had completed all the refunds to those that were affected. Sounds straightforward, but in reality, there was a massive backlash of responses from users stating that they had not received a refund.
In addition, many of these users attempted to make contact with Yuga Labs via Twitter only to get a reply from a phishing account that was posing as the Otherside account. ZackXBT, a crypto watchdog, claims that these accounts made over $5 million of digital assets from the users that had initially contacted them.
The losses don’t stop there sadly, when you add the previous phishing scams that were in play during the Otherdeeds NFT, then these scams resulted in a total loss of around $11 million!
It would be easy to place all the blame on Yuga Labs for not being savvier about their Otherdeeds sale, but it is also important to stop and consider the issues with inequality in crypto as a whole. Those users with huge holdings may have been able to skip past the Yuga Labs restrictions that were put in place to reduce the impact on the market. Yuga Labs claims that the measures they put into practice were there to vet buyers.
They went on to state that their restrictions combined with the 305 ApeCoin price should have stopped gas hikes in their tracks as well as avoiding any negative impact on the Ethereum blockchain – neither of which managed to achieve the plans the company felt they had out in place. There are many Twitter users who have been quick to call the company out, explaining that in reality, no one is really keen on solving wealth inequality problems in the crypto world or anywhere else.
The argument of wealth inequality is set to rumble on as many users take to Twitter to share their frustrations at a system that seems to be put in place to allow the wealthiest to get what they want at the expense of everyone else.
It does call into question the motivation of Yuga Labs, leaving many of us wondering whether they are just not thinking about the processes adequately or if they are happy to allow this have and have not system to continue. Ultimately, it proves the need for better consumer protection and better management.
A Closer Look at the Death of the Azuki NFT Collection
On Monday, a host of a Twitter Space announced the death of the Azuki NFT collection – a statement that was shared due to a blog released by Zagabond, the Azuki founder. In the blog, he acknowledged that some of his earlier NFT projects had failed to live up to the hype he had expected and that he had learned that getting the right people was far more important than following an expected design standard.
We all know that an NFT, including the Azuki collection, can experience rapid price changes, with peaks and troughs occurring on a regular basis. After 24 hours of Zagabond’s blog being released, the collection dropped from 19 Ethereum to just 10.9. In dollars, this is a drop of over $17,000 or 48%.
It would be naïve to suggest that the blog post and subsequent Twitter posts were the only reason for the drop in the Azuki Collection floor price, but they have definitely had a huge impact and continue to do so. The Azuki Collection starting price has dropped by nearly 60% over the last four weeks and some of this drop can be attributed to the wider NFT market decline that we are seeing.
The Twitter discussion around Zagabond’s blog has been growing with many users suggesting that Zagabond could be at the heart of the problem and others going so far as to accuse him of being responsible for a rug pull on each of the projects discussed in the blog.
Zagabond took to Twitter in response, claiming that while his former collections had not been as successful as he wanted, they were all delivered as promised. In his blog, he explored the lack of success and suggested that the issues and his decision to abandon the projects was more due to external factors than to anything he could have changed.
A rug pull is deemed to be a malicious act and typically coincides with the developer either leaving the project and taking the funds that have been gained or choosing to sell their pre-mined holdings that in turn will drain the funds from the early investors.
In addition to being accused of orchestrating a rug pull, other Twitter users suggested that he was part of an NFT wash trade on the CryptoPhunks project – a move when a user buys and sells their NFT to create an artificial increase in price. The accusation goes on to suggest that the CryptoPhunks wash trade resulted in a gaining 300 ETH before the project was ended.
We remain fascinated by Zagabond’s decision to share all this information at this point in time and whether he did it to reflect on his own learning journey and was naïve enough to believe that people wouldn’t try to read between the lines!
The interesting thing about all the publicity around the death of the Azuki Collection has given NFT collectors a great opportunity – being able to get their hands on some of the Azuki Collection for a much lower price than expected. This has not only saved them cash but has also given Azuki more than three hundred sales over one day!