🕋 #04 - Make Money in the Metaverse

Play to Earn

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:

  • 💸 Solana and SuperRare shake things up

  • ♻️ NFTs continue to cycle

  • 👾 The Top 5 Play To Earn / Metaverse NFT Projects

💰 Solana and SuperRare Distribute New Wealth

As the excitement from EIP-1559 died down, the Crypto community collectively realized that it didn’t solve any underlying problems. The gas fees on ETH continue to be really high, with NFT speculators spending anywhere from $300-$600 USD per transaction during high traffic periods. That’s tolerable if you’ve been into crypto for at least 3-6 months, but prohibitively expensive to anyone else entering the space.

And then over night it seems everyone looked around and realized “hey Solana has low gas fees” and the price just took off.

This puts it at a $20b market cap, twice the size of Matic, but still 1/4 the size of Cardano and a tiny portion of Ethereum’s $383b market cap.

Builders on the Solana ecosystem are having success in launching various projects, including Solanart.io (the NFT market for Solana) and Mango Markets.

The two biggest NFT drops on Solanart so far have been the Sollamas and Degen apes projects which both sold out quickly even with relatively basic art. There were definitely technical challenges alongside the heavy traffic, but those who participated in the drops reported fees of less than $10 per transaction.

SuperRare is an exclusive NFT art platform that uses a bidding system for artists to sell their 1/1 art pieces. It had an editorial feeling to it, with editors from the website writing articles and featuring various different pieces of art.

They airdropped a token recently the $RARE token, which is currently already at $1bn fully diluted market cap. They airdropped it to participants on their platform, based on how many NFTs they had bought and how long they had been on the platform. The platform is definitely positioned more as “appreciation of the arts” instead of just general speculation or investment, and it’ll be interesting to see how it develops over time.

The $RARE token is part of a greater push within the platform called SuperRare 2.0 which basically introduces independent storefronts for artists, a voting and governance mechanism, and the beginning of opening up their curation to the community.

So if it was more of a New York Times before, now it’s more of a Pinterest, opening up their space to the community.

The airdrops were very generous, with the smaller ones being $5-10k USD and ranging even up to $200-300k USD. Even after the initial airdrop the price of the token has held up, indicating that the community believes in the long term prospect of the platform.

Even though art NFTs don’t draw as much attention, since they usually don’t “flip” for large sums, and are rarely used as profile pictures.

But as the space continues to mature and new users continue to buy their first NFT, it seems guaranteed that the NFT art market will continue to grow. There’s a growing contingent of digital artists online and for them NFTs is one of the best ways to directly monetize their work. And it provides collectors a way to support the artists that they feel passionately about, and also in the future display those pieces in meaningful ways. There’s still some development to go though before that niche fully develops.

The opportunity: As more and more money flows towards profile picture projects, and analytics meant to treat NFTs as a speculative device, people will neglect the artistic side. There’s still more room to build platforms around curation, discovery and appreciation of art which as an industry has already existed for a long time.

♻️ The NFT Cycle Stays the Same

Phase One of the last big NFT cycle was in December to March earlier this year. It started out with some 6 and 7 figure purchases of NFT art made by famous artists like Justin Roiland (of Rick and Morty Fame) and Mike Winkelmann aka “Beeple”.

Into the Ether, which sold on Nifty Gateway

Phase Two is characterized by the popularity of closed marketplaces with high liquidity like Nifty Gateway and NBA Top Shots, with huge sales volumes and lots of excitement. But then the market realized that those sales are just being boosted because those platforms are closed environments, and so people are trading back and forth and raising prices artificially.

Which leads to Phase 3 where the attention shifts to Opensea and digital avatar profile picture projects as communities are formed around different projects.

Even though a lot of projects came out on the market during that time, eventually the excitement died down as most participants in the market eventually get priced out or the novelty of buying NFTs wore off. Projects that came out during this period were like Euler Beats, Gan Punks, and Crypto Cats. There’s also a lot of speculation where people start to hunt for older OG projects, in an attempt to find the next CryptoPunks.

Phase Three reminds people that NFTs are technology and therefore can have functionality, and that leads to Metaverse NFTs and the “more tangible way” to flex your NFTs, where other people are actually forced to look at it. Famed Bitmex CEO Arthur Hayes just wrote an article about the inherent need for humans to show status in his latest write up here.

Basically it’s all well and good to look at a JPG of the $50,000 NFT you just bought, or even if you’re lucky, a MP4, but it’ll only really come to life in a video game, and that’s ultimately where all the attention heads in the last phase of the cycle. Which leads us to the next and last section:

👾 The Top 5 Play To Earn / Metaverse NFT Projects

The blockchain really allows for more earning potential to be made by the players themselves. Here’s some games which have taken advantage of this new model and are gaining quickly in popularity.

  • Axie Infinity - which often gets called the Metaverse Pokemon, recently made $300 million revenue in a month, (double the revenue of Ethereum in the same time period). Users collect Axies and can battle them against each other, including in a pretty robust online PVP scene. They’re rewarded with a token called Small Love Potion which can then be used to breed more Axies, and sell them to new players or players looking to build a better team. There’s also an in game currency AXS which recently saw a huge uptick in trading volume. Many players in lower income countries have started to play this game full time as a reliable source of income.

  • Sandbox - This game is being developed by a seasoned team of game developers Pixowl as a Metaverse alternative to Minecraft, and their team of partners and investors is very wide spanning. Even before developing their blockchain version of their flagship game, the original game already surpassed 40M downloads between 2014-2018 showing that the core game had a solid fan base. As it stands now, the Sandbox has struck up partnerships with successful NFT projects like the Cyberkong as well as mainstream companies like The Walking Dead and Atari. The game will launch with a very robust creator economy selling skins and usable in game items, and has already had several very robust sales of its land to the public, with each wave generating $3-6 million in sales.

  • Gods Unchained - Magic the Gathering-esque collectible card game which has accumulated an active fan base even before the recent NFT booms. The in game currency GODS allows for crafting cards, staking, and voting on game design decisions.

  • Zed Run - Bringing the time honored tradition of horse racing to the blockchain, Zed Run was developed by an Australian studio called Virtually Human Studio. Horses can be bought or bred, and then raced for prizes in Eth. The average horse can cost anywhere from $300-$10,000 and the prizes for each race also vary greatly. Even with the best stats, just like real horse racing, there’s a large element of chance and variability which keeps the races exciting.

  • Townstar - A remake of the classic Farmville from Zynga, Townstar was produced by Gala Games, a blockchain gaming studio with multiple other titles under their belt. Players compete to see who can build the most successful town and Gala has put up prizes of up to $1m for their competitions. The coin is called GALA and can be used to buy in game NFTs or simply cashed out for real money.

Pick of the WeekCyberkongz and Cyberkongz VX These two projects are already seeing a very high floor, with Genesis Kongz (1000 supply) selling at 30 eth minimum, and even Baby Kongz are going for 2.4 eth each. Cyberkongz VX were created as a playable avatars collab between Cyberkongz and Sandbox, and a large part of the reason for the huge surge in sales volume for both collections. In addition, Genesis Kongz yield “bananas” which at the time of writing is up 93% to $30 a banana over night, as speculators simply buy Bananas instead of buying Kongz. We think it could continue to run up higher, although of course with Sandbox release date having been pushed back so many times, attention on this project could shift elsewhere after a week or so.

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