Morning Drop: Issue #2
Your weekly dose of what’s minting, popping, and brewing.
🥩 NFTs leak into meat world
NFTs are eating everything.
Bored Ape Yacht Club confirmed that one Bored Ape will be auctioned off at Christie’s Hong Kong auction house. The lucky winner will be welcomed with open arms into the world’s most exclusive country club.
Crypto Punks saw the floors swept hard after their art world debut, so the idea of setting apes loose on Hong Kong art markets is making it start to feel like the moon is too conservative as a goal.
Luxury brand Louis Vuitton launched “Louis: The Game”, to celebrate the 200th anniversary of the birth of founder Louis Vuitton. The game will follow the journey of the fashion brand’s mascot Vivienne to Paris and feature 30 non-fungible tokens (NFT) to be collected by players along the way, ten of which were designed by digital artist Beeple. The NFTs are collectible but not for sale.
The brand’s parent LVMH founded the Aura Blockchain Consortium, which uses blockchain to combat counterfeiting in the luxury industry.
Everyone’s favourite degenerate retail traders picked up a stake in The Doge Pound, headed up with buying activity from WSBChairman who currently features a Doge Pound Doge as his Twitter profile photo.
The Doge Pound has been working hard to rally their community around the Meme-O-Sphere, seeking involvement from Elon Musk, the DogeCoin community, and various YouTubers.
Despite the meme-y feel of the art, the Doge Pound isn’t just another PFP. The development team is experienced (rumor has it, advised by the Cryptokitties team!) and whoever manages the community is obviously on top of their game with this feature request board, and a community grant program in the works.
Launches and Rugs
Wolf Gang brings the big guns.
Big money continues to roll in as the team at Wolf Gang roll Floyd Mayweather and Soulja Boy into their roster of influencers. Interesting move here - we do love to see this stuff go mainstream, but honestly, there’s a bit of a weird vibe here.
How much celebrity money needs to be behind a project for you to get past the fact that it looks like furry fan art? Asking rhetorically.
As you all may know, we’ve been feeling a little burned out on generative avatar projects. The current meta-timeline goes something like this…
Launch; gas wars
Whales come in
Floor sweeps; early adopters
Enter the crowd
Begin roadmap here
Beyond this point, your results may vary, and frankly it’s starting to feel a lot like groundhog day.
On the bright side, the consideration Wolf Club Gang showed getting some big names in early does display some competence, and the gaming + community activity focus is refreshing. We’ll keep an eye on this one, but in general, we’re saving our ETH for better things. In particular, it looks like Personal Corner is looking to get into the sports and entertainment space. Hmm…
“Rug of the Week” Award goes to…
The fine folks at Rabbit College Club seem to have thrown in the towel, muted the Discord server, and gone back to the shadows to figure out what’s next.
Wanna avoid the rug?
Here are some tips from the famous @Zeneca_33, delivered over spaces this week:
Look for projects that have a real team, not an anonymous one. You want to know who is behind the project, what they bring to the table, and that they won’t quit when the project hits a rut.
Different and new, pushing the envelope. First culturally significant work, not the first one.
Look for art that resonates. Artists that have been creating for a long time - even outside NFTs - count.
You can check out his work over at Letters from Zeneca for deep dives on projects, released weekly.
This isn’t a note from Zeneca, but we’re calling it:
If your roadmap is basically “companions, merchandise, charity”, we don’t want it.
Companions and merchandise are both cool if people already like your thing, not a mechanism to make people like it. Outside the context of a successful project, this stuff isn’t worth the gas its minted on.
In case you missed it:
Read our feature on Glue Factory Show if you haven’t already. The show promises to be a wild ride. We gave away a pony earlier this week, but you can still get yours Sunday at 7PM EDT, at 0.1ETH mint.
Since it matters...
Lord knows we’ve been asking ourselves, so thank God someone sat down to explain it. The fantastic collection he put together is just the cherry on the cake.
We like his gallery.
If you’ve ever wanted your favourite song hanging on your wall - now’s your chance.
We all know the big names in the generative art category that have made it big:
Autoglyphs, generative art on the blockchain out of Larva Labs
Colorglyphs, an independent derivative collection.
the entire ArtBlocks collective that’s been taking us all by storm
… but in terms of generative art, we think Cryptosongz is worth some attention.
Cryptosongz takes generative art to a new level, by using popular music we’ve all come to know and love as inputs to a generative program.
Unlike other generative projects, Cryptosongz is a nod to our current social context and the music that brings us all together. The project is still insanely early, with reasonable entries into quality pieces well under 0.5ETH, and sale highs under 10ETH.
Most important in our view, however, is the commercial potential: this project lives at the intersection of art and pop culture, which historically is where substantial profits from sales of derivative products can be made.
The project seems to be quietly going through a marketing turn around, which is typically an exciting time to buy in. There is some chatter happening around Cryptosongz around offering a merchandise store to the public, where a share of profits would go to the token holders.
You can check out the whole list of Cryptosongz in one convenient Spotify playlist here.
Fix "Dollar-poor, JPEG-rich"
Having too much cash locked up in art is problematic when what you need is cash, but liquidating is not an option.
Luckily, debt and equity are the two ways you can pull cash out of just about anything, including art. Thanks to miracles of financial engineering, .jpegs are not exceptional.
Here’s a breakdown on how it all works:
NFTFi collateralized debt: Kinda like taking a mortgage on your house - someone lends you money, you promise to pay it back at some future date, and if you don’t pay it back they take your house. Substitute “house” for “NFT”, and you basically get the idea.
The bright side: You are guaranteed to get your NFT back, so long as you’re able to pay the debt.
The risks here are basically the same as the risks inherent to not paying your mortgage. You’ll lose your collateral… which, depending on whether the price moved in your favor - may actually be fine.
Fractional.art securitization: You take your NFT, and sell shares in it. Conceptually, this is a lot like what Masterworks.io lets people do with traditional art, but if that’s over your head, think about the concept of a stock - basically, that, but with an NFT.
The bright side: You don’t need to sell out. You can fractionalize and sell off less than a controlling ownership share, which allows you to control the reserve price.
The only real dark side is that this is a little complicated to understand. There are management fees you can charge holders in your NFT, you can create an NFT “fund”, and if you don’t have controlling ownership you risk the reserve price being met, and an auction being triggered to give holders liquidity - frankly, you may need an ELI5 before you dive in. There’s a handy flowchart here in the meanwhile.
And I guess if neither of these are appealing, you can always fall back on NFTx or NFT20 style liquidity pools. But really, why would you want to?
Royal Society of Players and Bored Ape Yacht Club are both throwing shindigs in meat-world as NYC Summer draws to a close.
Floors on World of Women, Nyla Club, and Blazed Cats are going up. Blazed Cats auctioned off a collaboration with 1/1 artist sabet, raising something like $8,000 for MHA, while Nyla Club is rumored to be working towards stories with major popular media outlets.
Speaking of skulls… look out for a special issue of Morning Drop this week, with exclusive details on the new undead crew in town.
You won’t want to miss it.
Liked this issue?
Send it to a friend!
BCC us when you forward it, and you might get something cool.
If we have gas money.