GM - this is the BCheque Papers, edition #57.
Welcome to the 58 new subscribers this week - we are at 1,505 subscribers now!
I write about NFTs/crypto, and trying to make it independently in web3.
This is what we’ve got this week:
This Week In NFT World - $BLUR airdrops $300M into market
Risk On - Why I sold my $BLUR airdrop
Creator Corner - Time value of clout > time value of money
On The Horizon - NFT Paris
For sponsorship enquires, please DM me on Twitter.
Have a great day,
B
This Week in NFT World - $BLUR airdrops $300M into market
The biggest news this week was the Blur airdrop.
Blur, the biggest NFT market competitor to OpenSea, gave away for free 360M governance tokens to its users.
This represents 12% of the total supply of the token, much of which is still being held back, locked up, or reserved for other allocations.
Since I sold (!), the price has gone up to $1.1 (I’ll explain why later).
This increases the fully diluted value of the token to $3.3b.
This is the focus of this week’s newsletter later: it looks like the NFT market has responded very, very well.
Yuga Labs announce Dookey Dash winner
Yuga Labs announced Mongraal, a famous gamer with 2.1M followers on Twitter, as the winner of The Key.
The Key was the prize for the highest score in its game Dookey Dash (I wrote about this game a couple of weeks ago as it took Twitter by storm: Why Yuga Labs Sewer Pass is jetting to all-time-highs).
It has been listed for a cool $3.5 million dollars and has a standing offer for $350k: see for yourself here.
The game has proven one thing to me: provide a prize worth enough, and gamers will come to play.
The Sorare 1/1 of Lebron James sold this week for $69,000.
This is the second highest basketball player sale on the platform, ahead of Anthony Davis and behind Giannis Antetokounmpo.
The Los Angeles County Museum of Art collect NFTs
Cozomo de’ Medici, a huge collector, has donated 22 NFTs to the Los Angeles County Museum of Art.
Cozomo said: “These works will now sit in one of the greatest art collections in history, alongside physical works by Rembrandt, Picasso, Frida Kahlo, Andy Warhol, Monet, and Georgia O'Keeffe.”
This is really cool and is proving that the collection of “digital things” will operate no differently than the collection of “non-digital things” because humans are just collectors of things.
Vince Van Dough introduces Notable Pepes
The Pepe Checks (which I wrote about last week here: Pepe Checks Marketcap Doubles In Days) will serve as a raffle spot for allowlists to drops from prominent Rare Pepe artists.
Each series will contain a total of 50 cards, with Pepe Checks representing card 1 of series 1. (I suspect these will be quite valuable.)
The drops will take place every Sunday.
I am holding my Pepe Checks to see how it plays out - think of them as a relatively cheap, fun raffle ticket for potential entry into a cool ecosystem.
Coinbase will defend its staking services in court
Coinbase CEO, Brian Armstrong, continues to face off against the SEC.
He published an article to maintain that staking services are not securities and that he is willing to defend this in court.
In worrying news, US regulators have ordered Paxos, the issuer of Binance’s US dollar stablecoin, to stop creating more of the Binance token.
However Paxos will continue to manage redemptions of the product.
CZ, CEO of Binance, responded that Binance will continue to support BUSD for the foreseeable future, although they will make plans for people converting to other stablecoins.
This comes against a backdrop of US regulators getting increasingly aggressive against crypto. I think this will continue until the right people are lobbied (as every other industry understands well).
Risk On -Why I sold my $BLUR airdrop
The $BLUR airdrop was huge.
Some people thought that the airdrop would signal a death for the NFT market. The thinking was that Blur was incentivising users to provide bid-side liquidity with the allure of a greater airdrop allocation and so when that airdrop was distributed the bids would disappear.
Instead it has injected around $300m into the hands of NFT market participants, bids have increased, and the NFT market has moved up. (For those who do not understand how there is suddenly $300m appearing out of nowhere, I recommend this article I wrote on “the immaculate conception of token value”. )
Spencer, who runs an institutionally backed NFT fund, was one of the few people who called this out before the airdrop.
Here are two interesting data points which demonstrate the strength of the market and the success of Blur and its token drop:
a) Blur Bidding Pools have reached an all-time high value of $84 million total value locked
This is exactly what Spencer predicted.
In a similar vein I had written that it was highly unlikely that Blur would not continue to incentivise bid-side liquidity.
Now that people have seen the value of this airdrop (the first of three), it makes perfect sense that there will be more people trying to get a slice of the next two.
b) Highest volume day of trading for a long time
NFT trading volume has picked up significantly and collection floor prices are up.
People want the slice of those next airdrops a lot: 75% of the community allocation of tokens still remains to be distributed.
So if Blur is doing good work, market seems healthy, and the platform has aligned its incentives well with its users, why did I sell?
There are three reasons, presented in ascending order of importance.
i) Poor communication
I agree with Zach’s opinion: it is embarrassing that Blur did not in advance of the airdrop communicate properly in writing the mechanics of the airdrop.
I am a former lawyer who specialised in media litigation and reputation management.
I have little time for organisations who treat their customers/users in this way. (It is not relevant whether the majority of the community actually reads the documents or not.)
Airdrops of value may help people forget about communication shortcomings in the short term, but that is not a proper communication strategy.
ii) The game has just got harder
As Bagman points out in this strong thread, more people are participating in trying to get a slice of the second airdrop, so the total value per person will likely decrease.
In essence, the market has moved from underestimating airdrop one to overestimating airdrop two.
iii) I am not a trader
Rather than being a trader who writes, I am a writer who trades (sometimes a lot!)
I am building a media business.
I know others who are affected when they see success like this.
But I feel nothing but happiness for my friend, Mooncat.
If I spent more time farming an airdrop, that comes at a cost to what I want to build.
Would my subscriber count have been on this rocketship trajectory upwards if I had been trading more on Blur?
Would I have secured 5 sponsorships since I started taking sponsorships in December if I had been obsessed with maximising my Blur airdrop?
Would I be close to signing the biggest partnership I have ever had if I had to constantly manage my bid-side liquidity?
For me the answer is no, no and no.
Though I know one of the fun things about this space is that we have the scope to dabble in multiple areas (and I will continue to do so), I believe real success comes from going hard in your real domain of expertise.
My domain is thinking, asking questions, and writing: and there isn’t an amount of airdropped money that could match up to the happiness of fulfilling my unique potential.
Creator Corner - Time value of clout > time value of money
My key learning from my conversation this week was that sometimes:
Time value of clout > time value of money
Schmrypto, the biggest known Checks holder and prominent collector, articulated why he held through a 7 figure position to go after the ultimate Black Check in Jack Butcher’s generative art project turned burn game.
Michael Rippe joined and provided insight into why the minimal aesthetic promoted by Jack has had such an influence on him and others.
Luke Weaver articulated clearly the Visualise Value value proposition, its history, and the elements of the tech which are most interesting and exciting.
We all dove into what made this collection so special and the nature of its value.
Here is the full interview. If you are interested in more long-form conversation, subscribe on YouTube for more BCheque Chats and other video content soon.
On The Horizon - NFT Paris
NFT Paris - I will be at NFT Paris - a previous partner of this newsletter - next week from Wednesday to Sunday. If anyone would like to grab a coffee, send me a DM or reply to me here.
When I am there I will go to play (or watch if I’m still injured) some football. My friend Hirshy is part of the team organising.
Will go to the SuperRare event on Thursday with my friend Shutong.
Otherwise open to having a coffee with any readers, so let me know if you are around!
Have a great day,
B
Disclaimer: The content covered in this newsletter is not to be considered as investment advice. It is for informational and educational purposes only.
I hold some of the NFTs mentioned in these newsletters.