Has faith in Azuki collapsed? Is the narrative of small image NFTs coming to an end?
Original author: Cookie, 0x 26, Jaleel
Original editor: Jack
A performance of "Ice and Fire" by Azuki has once again stirred up the stagnant NFT market.
In such a bear market, Azuki's new series "Azuki Elementals" sold out in less than 20 minutes at a price of 1 ETH. In less than 20 minutes, it garnered 20,000 ETH (approximately $37.4 million), earning over $2 million per minute. After the sell-out, from Twitter to WeChat group chats, everyone was "amazed." Some said no one is interested in NFTs anymore, while others marveled at how easy it is to make money in a bear market...
Over 2 hours later, Azuki Elementals unveiled their artwork, causing everyone to exclaim "WTF." It's not because the new series looks so good, but because they were dumbfounded—is this a dilution?
Azuki Elementals after the unveiling
The anticipation before the unveiling was so beautiful, but the disappointment after the unveiling was equally great. Many NFT players brought out Azuki's promotional animation to mock and "whip the corpse."
Community's mockery of Azuki Elementals
Previously, Azuki's derivative series Beanz made a surprise appearance at the end of a party with the phrase "Check your wallet". With a successful case full of surprise, the Azuki community and even the market undoubtedly have high expectations for this Azuki Elementals. Especially since Azuki's official account released a 1-minute animated short film on June 24th, everyone's appetite for "one bean per year" was definitely whetted by this animation.
During the release process, there were various issues raised by its holders: dissatisfaction with the short 10-minute whitelist minting window for Mint, dissatisfaction with the website overload causing failed mints, and concerns about the high degree of overlap with the characteristics of the first generation Azuki, and holders also worry about the possible dilution of the value of the first generation caused by Azuki Elementals…………
Influenced by the opening chart, Azuki's floor price also dropped from 12 ETH to below 10 ETH, currently hovering near the 10 ETH level, with a decrease of about 20%. Judging from the voices on social media, the storm that Azuki is facing this time is no smaller than the negative news of its founder Zagabond's "Rug Pull Startup".
Related reading: "Azuki, making 20,000 ETH, has angered the entire community"
How much faith is left in Azuki?
In addition to the ten-minute minting time, which caused the website traffic to overload and crash, and the image-like equivalent issuance, the most criticized by the community is that after the sale ended, the project team directly transferred 20,000 ETH. The transfer of 20,000 ETH has sparked a lot of discussion, and many people find it hard to believe that this is something a top-tier blue-chip NFT team would do. Disappointment and suspicion are rampant in the community. However, regarding the team's claim of taking away 20,000 ETH and running away, some in the community also point out that the team transferred the funds to another wallet for security reasons.
On June 25th, Sibel, the co-founder of nftftc, said on social media: "This is the end of NFT... With the upcoming mints of Azuki and Ether, this bloody market will lose a total of 50 million dollars. Although we are all playing the game of 'hot potato,' I don't think NFT will make a comeback in at least 6 months. I apologize for our losses."
KOL 0x Sun (@0xSunNFT) expressed on Twitter that it is hard to believe the delivery quality of the Azuki team, and all the discontent stems from a lack of understanding. Currently, the team has not made any announcements after the reveal, and it is unknown how they will respond. If this re-enactment of the original art is indeed the entirety of Elementals' content, and there is no further action or protection, then this release can be considered a naked harvesting.
Before the release of the Azuki Elementals series, Christian 2022.mid, a whale with thousands of Ethereum in Azuki and Yuga, believed that Yuga's Ponzi logic was obviously unsustainable, so in terms of narrative, he was more looking forward to Azuki's story.
In a previous interview with Christian, BlockBeats, Christian had shared his views on PFP's NFT model: "If a team does not have new ideas, cannot drive community innovation, or lacks new business models and development directions, it will be difficult in the next cycle. I even feel that Azuki's narrative is more charming than monkeys, which allows them to maintain the value of the project even when market sentiment is low."
Christian, who owns more than 470 BEANZ and 40 Azuki, prepared 1000 ETH for the sale of Azuki Elementals that night, hoping to maximize the liquidity of the entire NFT market. When he woke up in the morning, Christian had 682 BEANZ and 410 elementals.
Despite many community members losing faith in Azuki, Christian made the decision to "recharge his faith." He tweeted: "It is unwise to destroy a project worth billions (and the most loyal community on Earth) in order to gain a profit of 38 million. I am willing to spend $40 million to buy the entire company."
The Titanic of Blue-chip NFTs
Looking back at the past three months, regardless of whether or not they have the halo of blue-chip, the NFT market has been showing a downward trend. The market cap has dropped significantly by 23.64%, from 5.1 million ETH to 3.9 million ETH. Now, let's take a look at the blue-chip index. Although there was a brief rebound between May 31 and June 5, it also followed the overall downward trend — falling from 85,000 ETH to 75,000 ETH, a decrease of 12.22%.
Many blue-chip NFTs have not been able to escape the baptism of the bear market:
Moonbirds
Moonbirds, as one of the fastest rising NFTs during the bull market, saw its price skyrocket from 2.5 ETH at launch to 40 ETH within a few weeks. However, Moonbirds, also known as "moon bird" in Chinese, failed to turn the community's expectations into consensus. This is not only due to the scandal involving its former CEO, but also because of the decision to convert NFTs to CC 0 and the underwhelming concept of "soft staking" that didn't meet expectations. Currently, the floor price of Moonbirds has dropped to around 1.5 ETH.
Doodles
The joining of Pharrell Williams, now the creative director of LV men's wear, could not save Doodles from drifting away from the community. The co-founder of Noodles, who chose not to go with the flow, has caused significant harm to the Doodles community. The community has criticized the Doodles team for their inaction and for setting barriers to community communication (Discord). The decision to migrate to the Flow chain in early 2023 further ignited the dissatisfaction of the Doodles community. Since then, the floor price has dropped from 7 ETH to 1.5 ETH, far from its peak of 22 ETH.
BAYC
Even the NFT champion Bored Ape Yacht Club (BAYC) has not withstood the pressure this year. Its floor price has dropped significantly, from a peak of 150 ETH to 40 ETH, and even briefly dipped to around 34 ETH. The price has experienced a 14.92% decline in the past week. Despite the announcement of the new game HV-MTL Forge launching on June 29th, it has not brought a significant rebound to the continuously declining floor price of BAYC. By observing the whales of BAYC, one can glimpse the reasons behind its sharp decline.
Franklin, who once held over 60 BAYC, suffered numerous investment mistakes and sold off most of the BAYC, causing panic in the community and eventually deleting his Twitter account. As a spokesperson for BAYC, Huang Licheng has also expressed dissatisfaction with Yuga Labs, the parent company of BAYC, stating that the architecture of ApeCoin DAO has certain problems and is too centralized, preventing the investment vision of DAO from being realized. After experiencing multiple "roller coaster" trades on the NFT trading platform Blur, Huang Licheng finally chose to sell BAYC. As of now, there is only one BAYC left in his main account.
In contrast, Azuki and Beanz have undoubtedly remained strong and even defied market trends, becoming the strongest blue-chip projects. During the bullish market peak, Azuki's floor price was over 30 ETH and even rose to 17 ETH a few days ago. Moreover, the Azuki community has maintained a high level of activity and cohesion during the bear market, thanks to strong community support and product appeal. However, after the release of Elements, the community seems to have lost confidence in this "last blue-chip project."
Of course, there are still some dark horses in the NFT sector in 2023, such as Milady and Punk, who have remained remarkably resilient. With BAYC's gradual decline in value, Punk has regained its position as the highest-priced blue-chip NFT, and Milady even received Elon Musk's "favor." Fat penguins, Pudgy Penguins, have taken a different path. After raising 9 million through a 1kx-led financing round, they announced their breakthrough by extending their IP to the real world. Their merchandise, Pudgy Toys, sold 20,000 items within 48 hours of launch and even received the Toy Insider's 2023 Best Summer Toy Award.
Reflections on Image NFTs
Azuki's delivery this time is really disappointing. After all, you received $37.4 million, but even the images themselves had some basic errors. NFT players have "nitpicked" these errors and made fun of them, reflecting their anger and disappointment.
Making money so easily, has Azuki already forgotten that asking users for money is for doing things? Setting aside the hype logic, starting with a picture to claim that you want to build an IP is the same as launching an independent game on Kickstarter. Indeed, many people are buying just for Degen, but as a project party, are you only here for a "gamble"? Not only taking money from buying chips, but also taking users' funds through royalties? From the first generation of Azuki to the present, sales revenue and royalty income are already sufficient. How much money has been spent on content creation that you still need to ask users for money?
The value of this "shell" called NFT has been squeezed to almost nothing. If Azuki keeps doing this, the trust between the project party and users may be completely worn out.
In plain terms, NFT is just a realization of blockchain technology. A picture is sold at such a high price because it uses blockchain technology to store it. There is an element of gambling, as well as support and trust from people who love NFTs for the vision you propose. The biggest pain point of small picture NFTs is that they are essentially just a "starting picture" and they do not have any additional content. So, we need to create content and explore attempts such as IP on top of the content.
Other cultures that have already established their business models have both stable inventory and the ability to attract incremental quality content. For example, musicians can spend ten years honing their skills and release an album and then disappear, because even during the gap period of content creation, everyone can still appreciate their previous works and consume them. What can small picture NFTs do? Are we relying on everyone to drool over a picture every day and fantasize about their own metaverse avatar? We can easily imagine that if Azuki is not an NFT and we see these pictures at an offline cultural and creative market, would you spend even 100 yuan to consume them? And after bringing it home, how long will you be interested in it?
So everyone realizes how difficult it is to build a community around small picture NFTs. Once the excitement is gone, there is really nothing to talk about except for discussing the price fluctuation. You have raised so much money, and people hope that you can make a breakthrough, but in reality, you have not delivered that breakthrough yet. Updating the website, making a few clothes, hosting a few parties—over a year has passed, does all of this really match the funds you have raised?
We have gone through a complete investment cycle, and many projects have been proven false. Everyone also understands the development direction of the entire market. Looking back at the early popularization of the Bored Ape Yacht Club (BAYC) full commercial rights IP licensing, the community and artists integrated BAYC into various creative outlets: beer, neon signs, merchandise, coffee, bars, hamburgers, stories, comics... BAYC has spawned numerous art derivatives. But at some point, BAYC changed, and its cultural output gradually diminished.
In this situation, Christian 2022.mid, co-founder of the NextGen Foundation and WeirdoGhostGang, believes that in the next cycle, new blue-chip NFT projects must have two characteristics: first, they must attract more people from outside the community through cultural output; second, they must transition from virtual to real, with tangible products and sustainable business models that showcase the value of Web3 and what it can accomplish. Christian said this is also the reason he chose to invest in The Weirdo Ghost Gang project.
Create content first, then present products, and establish a viable business model. This is a challenging process, but it is the necessary path for NFTs to accumulate real value. It's already 2023, if NFTs are still only used to create gambling games, how can we expect the future of NFTs?
It's time to go back and discard this "shell." What we are doing is not amazing - we simply store an image using blockchain technology and explore new possibilities in the arduous process. If making money quickly and in large quantities through NFT projects or simply speculating and making money unrelated to me is the goal, then both the project team and users will only be trapped in the old narrative within this circle, making it really difficult to move forward.
Projects with money can create more interesting content, and projects without money don't necessarily need to be abandoned. Starting from a "little online store" that sells merchandise, is it impossible to grow? It's just that the road is too difficult, and people are unwilling to walk it. The narrative of image NFTs is far from over; it just requires us to be more honest with ourselves - this is a difficult path. Be steadfast in walking it, and you will find that users have always been around you.
