🕋 #03 - Did Someone Ask for More NFT Functionality?
NFTs are going functional with DAOs, decentralization, and more
The AI Training Data for Nouns, the last one sold for 10Ξ
If this is your first edition of the Non Fungible Times newsletter, welcome! We aim to be the most comprehensive news source for all things NFTs - from new projects to industry drama, to business opportunities in this growing space.
This week’s newsletter includes:
🔥 The First Completely Decentralized NFT project
🍎 The Rise of DAOs and thoughts from a Prominent DAO
🌟 The next BAYC? These NFT projects are rising fast and worth following
🥶 Nouns drops their first Noun to the tune of $1.8m
Now that’s cold! It’s extremely rare that a brand new project could drop their first ever NFT from a collection for such a large sum. But this isn’t just any run of the mill project. The Nouns project is the first fully decentralized NFT project. The developing team who wrote the contract in such a way that they could eventually remove themselves all together from running it.
How does it work? Excerpt from their site:
nouns artwork is public domain
1 noun trustlessly auctioned every 24 hours, forever
100% of noun auction proceeds are trustlessly sent to Nouns DAO treasury
settlement of one auction kicks off the next
all nouns are members of Nouns DAO
The treasury is composed of all the ETH that’s spent on the auctions. At the time of writing, that’s a whopping 800 Ξ or around $2.5m in today’s prices.
The members of the Noun DAO, aka everyone who owns a DAO can then vote on proposals on how to spend that money.
Everyday a new person can join the organization, since a new noun will be minted every day, and all of them are stored directly on the blockchain and not IFPS or any image hosting service.
That means there’s basically no dependencies that could take this project down.
Picture a high school club but with a budget of $5m, and it never goes away, no matter who’s a part of it. When the treasurer graduates and goes to college, any other high school student could buy his position. And so on and so forth!
This is an exciting experiment into the future of organizations, companies, and even re-visiting the idea of democratic systems.
Why does NFTs come into it though? Well honestly, it doesn’t need to. This type of DAO could easily be done (and has already been done several times) by simply issuing a token that individuals buy into, just like a normal coin.
But building out a DAO with NFTs has several key advantages.
The Nouns are interesting artwork, and serve as symbols that people can rally around. The members of the crypto community who have bought into the DAO have already started building derivative artwork from the nouns or setting them as profile pictures. People do find it very easy to communicate using symbols and images.
By putting up each piece for auction, it ensures that users who buy into the project are not doing so for profit or a quick flip. Usually the person who bids the auction has won the piece, at probably the highest price that any individual would be willing to pay for it, so that excludes the likeliness of a flip.
NFTs are relatively easy to change hands and there’s easy trustless mechanisms for doing large deals for them. For example, Punks regularly trade on the CryptoPunks website for $5-10m sized deals with Ethereum with minimal fees.
As this project develops it’ll be very exciting to see how it goes. And certainly we would love to join this DAO, but it might be increasingly difficult price wise. Which leads to the next point coincidentally!
🤖 The Rise of Semi-Autonomous DAOs
The first NFT related DAO in 2021 was called B20 known for containing 20 pieces from famed artist Beeple, and it made some waves at the time. Crypto entrepreneur Metakovan and his team purchased a bundle of the most valuable NFTs and put it into a vault. The total value of the collection was estimated to be a minimum 58m and drew a lot of attention.
By fractionalizing it and issuing tokens that then provided voting rights, Metakovan established a sort of DAO, where the token holders could vote for or against a complete buy out of the vault and they would get their money back in the form of DAI.
It was a great concept but didn’t involve the full potential of DAOs which revolves around more nuanced governance.
We reached out to member goldy.mov, @Goldypix on Twitter, one of the founding members of up and coming Shark DAO about the story of how they got started. He had a very cool story to share!
The idea to start Shark DAO evolved very slowly in the Nouns Discord server during the testnet. When I joined in late June there was already people talking about whether or not they could create a subdao to buy a noun and spitballing ideas. Eventually during a test auction, Punk 4156 suggested we could all chip in Rinkeby ETH together to try win the Shark noun. The auction finished at a time where most people were going to be asleep so I volunteered to collect the funds and make the bid since I’m in Australia and would be awake. After we won it we setup a Multisig wallet to store the noun and make future bids and decisions. It was partly just silly and fun and partly a great dry test run for how this could work. A lot of people showed enthusiasm and wanted to join the Shark DAO. The day before main net launch there was a big Zombie Punk auction where a PartyBid group won and it was very exhilarating to see, I think it gave a lot of people energy and confidence in the idea of buying as a group. There was an attempt to get Partybid hooked up to the nouns auctions in time but it was not possible. So on main net launch day I wrote a message saying anyone who wants to join to form Shark DAO for real let’s give it a go and started a discord server for members to join. The whole thing blew up very fast. We had pooled over 200 ETH and gained ~100 members in less than 24 hours. Some of us knew each other from the nouns discord or other NFT networks, but for the most part we were all strangers who came together, enthusiastic, optimistic, and ready to take a risk.
The enthusiasm for the nouns project is palpable and real, and will only get better over time.
I love the nouns project. It’s incentivizing long term thinking and disincentivizing hype cycles and the chaotic rush of most of the NFT space. It’s about as open as any project could be. It feels like it is being built to fit into a future world that doesn’t yet exist, and so hopefully it will help create it. It has interesting governance aspect, and it’s basically a massive experiment -what could be more fun!?
The enthusiasm for the nouns project is palpable and real, and will only get better over time as the momentum builds and the DAO’s treasury becomes more vibrant.
Other up and coming DAOs include:
@FingerprintsDAO - A collector, curator and producer of fingerprints of the blockchain: smart contracts as art
@juiceboxETH -A business-model-as-a-service and programmable treasury for community-owned Ethereum projects (Kickstarter for Crypto)
@sharkdao - Featured in this article! A DAO formed to buy nouns
📌 Projects to Watch and Pick of the Week
Pudgy Penguins are sweeping Twitter (we called it ahead of time!) and shaking things up. They’ve dethroned both Bored Apes and Cryptopunks to be the highest volume this week. Floor price is now at 2.5 eth and seems to be consolidating there.
Vox Collectibles are the latest release from Gala Games, and are going to have utility as well as being collectibles. They’ve been compared to Meebits both in style and functionality. Floor price is currently at .33 eth.
Parallel Alpha is a soon to be released card game that features NFT of different rarity as playable cards. It did over $11m in sales over the last week, with an average of $2243 per sale, which is astonishing considering that the game hasn’t released yet.
Punks Comics is a complex NFT project crafted by Punks community member Robbie. It’s a beautifully drawn comic which can be burned in order to be a part owner of a valuable vault filled with $PUNKS tokens, and 14 actual CryptoPunks.
Pick of the Week: Cool Cats NFT Although this started out as almost a joke, you have to remember that Pudgy Penguins was considered a joke at one point too and no one imagined it would get so pricey. Cool cats is seeing growing popularity on Twitter and in addition, there are over 4k owners on Opensea, making it a widely popular project. It has been picking up steam lately, and could see a Pudgy Penguin like movement in demand.
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