NFT avatars are so expensive, why should we “break” it?

Last Saturday, a message was swiped in the encryption circle. The well-known NBA star Stephen Curry bought an NFT ape (Bored Ape Yacht Club, BAYC) for 55 ETH (about 180,000 US dollars), and then He changed his Twitter profile picture to the NFT work, and marked the project’s abbreviation “BAYC” in his profile.

NFT avatars are so expensive, why should we "break" it?

In addition to buying BAYC apes, he also bought Bored Ape Kennel Club NFT (BAKC), a leopard-print dog tied to a basketball hoop, for 5.7 ETH (about 18,000 US dollars) .

NFT avatars are so expensive, why should we "break" it?

It is reported that Bored Ape Yacht Club (BAYC) is an NFT collection item launched in late April this year. The series consists of 10,000 unique apes, including hats, eyes, looks, clothing, backgrounds, etc. 170 different rarities. Curry’s ape has blue skin, zombie eyes on his head, and is wearing a checkered tweed suit, coupled with a gentleman’s essential men’s silk scarf. It is indeed a rare dressing attribute.

According to Opensea data, before Curry bought, the last transaction record of BAYC 7990 was sold at a price of 1.5 ETH 3 months ago. In 3 months, the price of the ape increased by nearly 36 times. .

NFT avatars are so expensive, why should we "break" it?

Owning an ape means obtaining membership in the Boring Ape Yacht Club and will enjoy member-only benefits, such as entering the collaborative graffiti board “bathroom”, where you can paint or create arbitrarily. As the project develops, More benefits will be unlocked in the future. Bored Ape Kennel Club (BAKC) is a companion dog that BAYC provides for free adoption in order to reward club members. The total number is 10,000, and each dog is unique.

On the day when Curry bought BAYC Apes and BAKC Dogs, these two projects both hit a record high in terms of transaction volume. According to CryptoSlam data, on August 28, BAYC Apes’ transaction volume reached US$55,695,100. The day before yesterday rose by 403%, and BAKC Doggo’s trading volume reached US$8.7827 million, an increase of 413% from the previous day.

According to Messari data, on August 10, the floor price of BAYC apes was 16 ETH, and after buying in Curry, the floor price of BAYC apes rose to 24.99 ETH, a 56% increase in 21 days. The floor price of BAKC Doggo has also risen to 3.5 ETH.

It is reported that Michael Bouhanna, deputy director of Sotheby’s, contemporary art expert and co-director of digital art, tweeted on August 28 that BAYC and BAKC will appear at Sotheby’s from September 2-9.

NFT avatars are so expensive, why should we "break" it?

In addition to BAYC, the blue-chip project CryptoPunks in the Avatar sector has developed into the most expensive project in the NFT ecosystem in four years, and it is also experiencing the madness of the DeFi boom last year.

The payment giant announced on August 23 that it had purchased CryptoPunk 7610 for approximately $150,000 . Soon after the announcement, CryptoPunks Bot data showed that in more than 20 minutes, CryptoPunk NFT had about 30 transactions, with a total turnover. Over 2,800 ETH, the price is nearly 9.4 million U.S. dollars.

Since then, NFT art fund VulcanDAO, physical gallery Start Art Gallery, Mask Network, etc. have successively announced the purchase of CryptoPunks within a week. Under such a sales tide, CryptoPunks’ past total sales reached 1.18 billion U.S. dollars, single-week sales reached 323 million U.S. dollars, and the floor price reached an astonishing 118.5 ETH (approximately 385,500 U.S. dollars). CryptoSlam data shows that the total sales in the past 30 days reached 673 million US dollars, an increase of 409%.

NFT avatars are so expensive, why should we "break" it?

Christie’s, which is also among the top ten auction houses in the world like Sotheby’s, also plans to auction a set of rare NFTs from CryptoPunks, Bored Apes and Meebits in September. In the short term, it seems that this round of Avatar boom will continue, and more and more similar projects have sprung up.

Under such an upsurge, the popular NFT collectibles are priced at hundreds of thousands and millions of dollars, which is naturally prohibitive. While the investment threshold is raised, it has also caused NFT liquidity problems. Faced with such a situation, NFT fragmentation has emerged.

The rise of NFT fragmentation

On August 23, a picture of Shiba Inu named “Feisty Doge” began to appear frequently in major communities.

NFT avatars are so expensive, why should we "break" it?

The photo of Feisty Doge is part of a shot with a Japanese Shiba Inu named Kabosu, who has gained fame on the Internet as the dog behind Doge Meme. The photo was sold as an NFT in June and was bid by a user named path.eth (@Cryptopathic) on Twitter on the decentralized auction platform Zora for 13 ETH. On August 19th, the user split the ownership of this Feisty Doge NFT (Dogecoin profile picture prototype) and created the token NFD with a total of 100 billion copies. Then he created an ETH-NFD pool on SushiSwap, invested 25 ETH and 5 billion NFD as initial liquidity, which means that the initial valuation of Feisty Doge was 500 ETH (valued at about $1.555 million at the time).

NFT avatars are so expensive, why should we "break" it?

DOGE later, SHIB other animals currency fanaticism, and so-called Feisty Doge of “authentic lineage”, path.eth (@Cryptopathic) released the news, very low prices, to stimulate interest in NFD for speculators like wildfire Spread, from the initial $0.00001547 to the highest price of $0.00125862 on August 22, the NFD has risen 80 times in just 3 days. While the NFD soared to a high point, it also drove the photo of Feisty Doge to become the most expensive NFT in the industry at a price of $126 million. The previous NFT most expensive work was created by Beeple, and his work “Everydays: The First 5000 Days” was sold for $69 million in March this year.

It is worth mentioning that the iconic case of early NFT fragmentation is actually “Everydays: The First 5000 Days”. It is reported that at the end of 2020, the NFT fund called Metapurse acquired 20 works in “Everydays: The 2020 Collection”, spending more than 2.2 million US dollars, and then the fund announced that it will use these 20 NFT encrypted artworks, plus Cryptovoxels , Decentraland and Somnium space is part of the virtual real estate, as well as each of the virtual space to accommodate the works of art and custom-designed VR galleries and other support as a value in the Ethernet Square issue ERC20 tokens B.20 on block Chaining (Beeple 20 Collection), which will be sold in two phases. Through these tokens, the NFT assets held by the fund are divided.

The total supply of B.20 tokens is 10 million, of which 59% are owned by Metapurse and 41% are distributed among artists, partners and investors. Under this distribution, B20 is accused of being highly centralized and has drawbacks. . However, officials believe that B.20 symbolizes the ownership of representative high-value works of art. It aims to promote the renaissance of virtual space and is a great attempt to decompose ownership.

Let us return to the topic of NFD. After August 22, the NFD boom began to fade, and the price fell one after another. In just 7 days, the price fell to 0.00026175 US dollars, which was nearly 80% back from its high point. A thread named Shual (@0xShual) published a topic post, describing in a long text how path.eth (@Cryptopathic) went from deployment to cashing out. The words seemed to imply that Feisty Doge was suspected of cheating money games. Some community users summarized the main operations of path.eth (@Cryptopathic), and finally clearly saw that it invested a total of about 100 ETH, and finally obtained about 3,300 ETH, of which 1,200 were through the Ethereum mixed currency transaction protocol Tornado. Cash turned away. As of the time of writing on August 31, NFD provisionally reported $0.00058522, which means that the value of Feisty Doge is still $58.522 million.

Obviously, NFD has become the engine of NFT fragmentation, gradually infiltrating the encryption community. We all know that although a book, a car, and a house are inseparable, when it is tied to a token, the token can be subdivided infinitely. For example, 1 bitcoin can be divided into 1000 0.001 bitcoins, so when you own the tokens bound to the asset, you also have the ownership of the corresponding asset. In this case, real-world assets, or products of the virtual world, can be regarded as a kind of stock, and fragmentation is similar to “stock splitting”, by splitting larger denomination stocks into several stocks. Stocks with smaller denominations on the one hand can lower the threshold for people to buy, obtain promising assets at a lower cost, and increase the possibility of benefiting from them. On the other hand, it also reduces the difficulty of circulation of these NFTs.

Currently, the mainstream NFT fragmentation protocols on the market are Fractional, Unic.ly and NFTX. Fractional is an NFT fragmentation protocol built on Ethereum. NFT holders can lock one or more NFTs into smart contracts to create fragmented homogeneous ERC 20 tokens. The number of tokens to be issued and the symbol are set by the creator. In addition, the creator must also set the starting price and buyout price for the locked NFT for other NFT collectors to bid. Of course, the creator needs to form a liquidity pool of fragmented ERC 20 tokens and ETH on the third-party AMM platform for other buyers to trade. TokenInsight pointed out that the fragmentation on Fractional is dominated by a single NFT, and most of them show the phenomenon of high TVL and high transaction volume when it was first released, but no one cares about it after the popularity drops.

Unic.ly introduces AMM (automatic market making) and liquid mining on the basis of fragmentation. NFT holders can create uToken (an ERC 20 token) by depositing and locking their NFT based on the ERC 721 or ERC 1155 standard in a smart contract, and the issuance volume is set by the creator.

Buyers can obtain ownership of the NFT collection by purchasing uToken. Collectors can also bid for a single NFT in the NFT collection. uToken holders will vote on whether to accept the highest bid. When the agreed proportion reaches a certain percentage, the NFT will be Unlocked, attributed to the highest bidder, uToken holders can get the proceeds from the sale of NFTs in proportion. Unic.ly allows NFT collection creators to add new NFTs to the collection at any time, so that profitable DAOs can purchase and add new NFT collections in time after the NFT is sold.

Although NFTX is different from Fractional and Unic.ly, it also wants to solve the problem of low liquidity of NFT. TokenInsight pointed out that according to the different types of collections, NFTs are divided into different collections pools. Anyone can lock the NFTs belonging to the collections category into the smart contract and obtain the vToken of the corresponding pool at 1:1. Holders of vToken can pay 1 vToken to redeem a random NFT in the corresponding collection pool, or purchase a designated NFT in the pool by paying 1.05 vToken. Because it is divided according to projects, the natural market of vToken of old-brand projects such as CryptoPunks performs best.

Cobo co-founder and CEO and F2Pool co-founder Shenyu recently took CryptoPunks as an example to analyze the current status of NFT’s DeFi evolution. He believes that the floor price of CryptoPunks is already more expensive for most of them, but holders can use the NFT fragmentation platform to package one or more NFTs, generate ERC 20 tokens and make markets on the AMM trading platform. In this way, retail investors can participate in the secondary market with a relatively small amount. On the other hand, for large CryptoPunks or rare NFT holders, it provides a new kind of liquidity, thereby realizing expensive NFT. At the same time, if the price of the token is inconsistent with the market price of the NFT, users who hold a certain percentage of the token can vote to liquidate the NFT auction in the vault, and the token will also be automatically converted into ETH. Shenyu concluded that the current basic model is that the game between retail investors, issuers and the NFT market may have positive and negative feedback amplification.

Unic.ly introduces AMM (automatic market making) and liquid mining on the basis of fragmentation. NFT holders can create uToken (an ERC 20 token) by depositing and locking their NFT based on the ERC 721 or ERC 1155 standard in a smart contract, and the issuance volume is set by the creator.

Buyers can obtain ownership of the NFT collection by purchasing uToken. Collectors can also bid for a single NFT in the NFT collection. uToken holders will vote on whether to accept the highest bid. When the agreed proportion reaches a certain percentage, the NFT will be Unlocked, attributed to the highest bidder, uToken holders can get the proceeds from the sale of NFTs in proportion. Unic.ly allows NFT collection creators to add new NFTs to the collection at any time, so that profitable DAOs can purchase and add new NFT collections in time after the NFT is sold.

Although NFTX is different from Fractional and Unic.ly, it also wants to solve the problem of low liquidity of NFT. TokenInsight pointed out that according to the different types of collections, NFTs are divided into different collections pools. Anyone can lock the NFTs belonging to the collections category into the smart contract and obtain the vToken of the corresponding pool at 1:1. Holders of vToken can pay 1 vToken to redeem a random NFT in the corresponding collection pool, or purchase a designated NFT in the pool by paying 1.05 vToken. Because it is divided according to projects, the natural market of vToken of old-brand projects such as CryptoPunks performs best.

Cobo co-founder and CEO and F2Pool co-founder Shenyu recently took CryptoPunks as an example to analyze the current status of NFT’s DeFi evolution. He believes that the floor price of CryptoPunks is already more expensive for most of them, but holders can use the NFT fragmentation platform to package one or more NFTs, generate ERC 20 tokens and make markets on the AMM trading platform. In this way, retail investors can participate in the secondary market with a relatively small amount. On the other hand, for large CryptoPunks or rare NFT holders, it provides a new kind of liquidity, thereby realizing expensive NFT. At the same time, if the price of the token is inconsistent with the market price of the NFT, users who hold a certain percentage of the token can vote to liquidate the NFT auction in the vault, and the token will also be automatically converted into ETH. Shenyu concluded that the current basic model is that the game between retail investors, issuers and the NFT market may have positive and negative feedback amplification.

In the NFT field, we have seen a very obvious head effect. People are still chasing more popular or rare NFT works, and the floor price can be used as a bullish signal to reflect which projects have become more popular. welcome. Relatively speaking, the situation of waist NFT is more embarrassing, unless someone who really loves this type of NFT enters, the original holder can be expected to cash out.

What is more interesting is that the small circle culture seems to have found a suitable living soil in the field of NFT fragmentation. For example, a group of like-minded people may initiate crowdfunding through the DAO organization under the leadership of the leader, and collectively buy a certain NFT. , And then rely on the amount of capital to participate in governance based on the tokens obtained after the split. At this time, the NFT fragments seemed to be a pass or a stepping stone for entering the circle.

 

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/nft-avatars-are-so-expensive-why-should-we-break-it/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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