What is a Rug Pull in Cryptocurrency?

A rug pull is a type of scam where the team of a cryptocurrency project suddenly exits the project, running away with investors’ funds.

Rug pulls occur particularly often on decentralized exchanges (DEX) and in the NFT world.  

DEXs allow users to trade cryptocurrencies without intermediaries; well-known examples include Uniswap, Balancer, and PancakeSwap. There is no central authority on these decentralized exchanges and users can trade anonymously. They’re primarily used to swap one cryptocurrency for another.

A typical rug pull scenario unfolds as follows. Malicious developers launch a new token and list it on a DEX. Investors can easily exchange more established tokens like ETH for this new token. Once enough investors’ funds accumulate in the liquidity pool (LP) for this seemingly legitimate token offering a high APY, developers quickly dump their holdings and drain their funds, and the new token’s value plummets to zero.

The year 2021 didn’t fall short of such scams. According to a report by Chainanalysis, this type of maneuver was the most popular one among the whole crypto fraud varieties in 2021, accounting for 37% of all scam revenue.

Rug Pull Example #1: Fake Project Forks on OlympusDao

Imposters exploited the popularity of meme coins among crypto traders by using a dog-themed logo inspired by the Greek god of Anubis depicted with a dog’s head. Developers presented the fake project AnubisDAO as a fork of the decentralized reserve currency OlympusDAO and launched the project’s ANKH token on the Copper platform. 

The developers used pseudonyms, and the project had neither a website nor a whitepaper. Nevertheless, $60M was raised in WETH, which disappeared from the project’s liquidity pools just twenty hours after the launch.

Rug Pull Example #2: Binance Smart Chain Forks

The Binance Smart Chain (BSC) saw multiple headline-worthy rug pulls. Meerkat Finance, a fork of the Yearn Finance protocol, was supposed to be a yield farming pool. After the launch, $31M in Binance token, BNB, disappeared from the project’s LP. It’s still not clear if this was a real rug pull case. However, the projects’ Twitter accounts disappeared along with the investors’ money which is a strong indicator that the project team was involved with the scam.  

Another BSC rug pull case is the TurtleDex project, whose developers ran away with $2.5 million that had been raised as 9,000 BNB. The team drained the funds from the Binance native DEXs Pancake Swap and ApeSwap and sent them to multiple wallets to sell on the Binance Exchange.

Other projects rug pulled on the BSC DEXs are Defi100, Uranium Finance, and Stablemagnet. Defi100 marketed itself as a synthetic index token based on the total market cap of the DeFi sector. 

Rug Pull Example #3: Squid Game

When the Netflix series Squid Game soared in popularity, imposters came up with a Squid coin idea. It was supposedly a play-to-earn cryptocurrency project that promised investors to participate in online games inspired by the hit series. It was launched on Pancake Swap. 

There were many warning signs for the potential investors, like an unprofessionally written whitepaper and a recently registered website. Nevertheless, the team exit scammed with over $3M investors’ funds after the Squid currency peaked at $2,861.

Rug Pull Example #4: Fake Uniswap V2 Fork

Uranium Finance claimed to be an automated market maker (AMM) protocol forked from Uniswap V2. Stablemagnet billed itself also as an AMM. They cost the investors $32M, $50M, and $27M, respectively.

Rug Pull Example #5: Avalanche Meme Coin Goes Bust

In November 2021, it was Avalanche’s turn to experience its largest rug pull. 

SDOG coin, issued by SnowdogDAO, was supposed to be the first-ever meme coin on Avalanche, and it was launched on the native DEX Trader Joe. Eight days after the initialization, SDOG’s value plunged to $1,500 after skyrocketing to $6,000. 

The SDOG case was a bit different than a typical rug pull; the developers promised the community a buyback of the coins, meaning the company would repurchase its own coins. 

This tactic reduces the number of tokens in circulation, and in theory, supports a deflationary token environment. The actual rug pull occurred while $40M worth of SDOG coins was transferred from Trader Joe to the project’s own AMM. 

The buyback failed because an account swapped $10M worth of SDOG for other cryptocurrencies in the meantime. This was only possible if the account had the “challenge keys” required by the project’s smart contract, hinting that the rug pull was an inside job. 

Rug Pull Example #6: NFT Rug Pulls

Rug pulls can happen on centralized exchanges as well, as evidenced multiple times by NFT rug pulls. 

One of 2021’s most notorious scams was an NFT project called Evolved Apes. Thousands of investors piled their money into Evolved Apes, whose developer ran away with $2.7 million.

Another NFT rug pull incident was Baller Ape Club, a collection of 5,000 NFTs supposedly inspired by the famous Bored Ape Yacht Club collection. On the drop day, developers directed the potential investors to a fake link that repeatedly showed a warning pop-up with a transaction failed message, although the transactions were successful. In the end, $2M worth of SOL was stolen from the investors.

Iconics, an NFT project also launched on the Solana blockchain, had promised its investors to deliver 8,000 unique NFT artworks. Instead, collectors received a random collection of emojis. Developers ran away with $140K.

How to Avoid Rug Pulls

If you don’t want to fall victim to a rug pull event, take notice of these red flags before investing in the brand new red-hot project.

  • A DEX loophole is that audits are not obligatory for token listings. Nevertheless, legitimate projects undergo audits to convince their investors. Be wary of projects that avoid this process.
  • Can you research the individual members of the development team? Are they all anonymous or pseudonymous? Do your due diligence, and note that fake faces and fake names are common on team bios. 
  • Add skepticism if a price soars in value exceptionally fast without a fundamental cause.
  • Excessive promotion can be another warning sign.
  • Does the project have an official website, social channels, and whitepaper? If so, can you spot amateurishness in the presentation, such as rushed whitepaper typos?
  • Does the project have an active Discord or Telegram? How is its community?

Legitimate projects tend to have tens of millions of dollars in total liquidity, as well as some longevity that supports the project’s community. Look for the common elements in the cryptocurrency industry’s established projects, and try to find the same signs in upcoming projects.

Final Thoughts: Rug Pull Safety

Cryptocurrency rug pulls can trap both novice and experienced investors. Newbies are unaware of the risks behind the decentralized projects, and veterans fall prey to FOMO while seeking high-upside and hyped opportunities. 

It’s essential to know about different tools scammers use to exploit the cryptocurrency system and spot the projects built on a lie.  

lt Although blockchain is a secure, reliable, and stable technology by itself, don’t give the same sort of credibility you would to a project like Bitcoin or Ethereum to any new upstart just because it’s using the blockchain. 

What Is Art Blocks? An Exploration into Generative Art

Art Blocks is an Ethereum-based platform that offers distinctive, programmable, and on-demand generative non-fungible tokens (NFT) art to collectors globally. It’s also the first blockchain-based platform to provide on-demand generative art output. It accomplishes this through NFT drops, a process in which a user mints an NFT but has no idea what they’ll get as an end product.

Generative art isn’t an entirely novel concept, but the Art Blocks team largely pioneers its blockchain-based adaptation. Generative art’s influence on the non-fungible token (NFT) industry has been swift, generating substantial interest among creators and collectors alike. 

The project’s series of colorful “Squiggles” generated over $850 million in sales in 2021, making it the world’s fourth-best-selling non-fungible tokens (NFT) project up to date.

The following Art Blocks guide goes over the project, how it works, and what sets it apart from other popular generative art blocks. If you’re new to the NFT space, don’t get thrown off by some of the terms throughout– you’re picking a very exciting place to start! 

What Are Art Blocks and How Does It Work?

Before diving into what Art Blocks is, you should have a good understanding of the power of non-fungible tokens (NFTs). 

An NFT is a blockchain-verified deed of ownership to a single digital asset, such as a video file, picture, artwork, or something entirely different. These tokens representing one-of-a-kind digital collectibles are created and stored on blockchains such as Ethereum. In contrast, the actual image or video file formats are hosted elsewhere to not pack the blockchain with too much data. 

So, what exactly is Art Blocks and where does this project fit into the NFT movement? 

Art Blocks is a platform for curating programmable artworks, which are  saved and traded as NFTs on the Ethereum blockchain. It’s a generative art system that enables collectors to create tokens without knowing exactly what they’ll get beforehand. The artist creates a piece of code that is inserted into the platform and generates random combinations of the variables. The script is kept on the blockchain, and most works are created with p5.js,  a JavaScript framework that supports creative coding.

The Art Blocks platform enables artists to submit an algorithm that creates one-of-a-kind art pieces in a given style. Artists can also establish a mint price and a limit (cap) on the number of pieces in every single collection. If a user likes a certain piece of artwork, they can mint one for themself. 

First, a seed, or random hexadecimal string is created. 

Then, while remaining consistent with the aesthetic of the artwork collection, each element in the seed defines an attribute of the artwork. For example, based on the color property of their randomly generated hexadecimal string, one person could get a red rendition of the artwork, while someone else would get more blue tones. 

The final product might also be a static photograph, a 3D model, or an interactive experience in many formats.

This element of surprise adds to the NFT minting process and ensures that every single collector has a fair chance of minting a unique piece.

To mint a piece generated by Art blocks, users will need to install MetaMask and connect both together. 

The artwork is stored on the Ethereum (ETH) network via standard ERC-721 compliant non-fungible tokens after being generated. This standard enables users to instantaneously access NFTs on marketplace sites like OpenSea, where they may resell their art pieces to other NFT collectors.

Art Blocks receives 10 percent of the mint price as a fee, and the artist keeps the remainder for the original sale. Art Blocks also deducts a 2.5 percent charge from secondary purchases on NFT marketplaces like OpenSea, while artists receive a 5 percent royalty. Artists tend to love this feature since it allows them to receive ongoing royalties from their work, which is unusual in the traditional art world.

The Types of Art Blocks Projects

Art block projects may be divided into three categories: Curated, Playground, and Factory.

Curated:

Art Blocks Curated is the highest level for generative art NFTs and also the Art Blocks product suite’s most meticulously curated offering. 

Collaborators or individual artists submit work, which is then reviewed and approved by the Art Block curation board before going online. These inventive releases by reputable artists tend to demonstrate artistic and technical range interwoven with the artist’s individual creativity. 

Playground: 

The Playground collection is essential for artists who have already had a curated release or drop and wish to showcase their talents even further. Art Blocks doesn’t really vet individual projects, but the artists are well-vetted, so you know they’re of great quality. The term ‘Playground’ refers to the area where artists can explore and express their ideas.

Factory:

Curated projects take about two years to finish due to the huge increase in the number of applicants. As a result, the Art Blocks development team created the Factory area, allowing novice designers to participate in drops. The team still selects and distributes artworks on a regular basis, but they are usually only inspected to verify that they are working and not blatant duplicates of other artworks. 

Artists maintain the responsibility and final say on marketing their own pieces since Art Blocks doesn’t strongly promote these releases as much asides from the platform general brand promotion. So, it is up to the artists to personally promote their works.

A Brief History on Art Blocks

Art Blocks was launched in November 2020 by Erick Calderon, nicknamed Snowfro. 

Snowfro claims to have got the notion for an Art Blocks sort of project after a personal encounter in 2017 when claiming Cryptopunks. Snowfro managed to manipulate the system and carefully acquire the rarest accessible assets at the moment, which were the zombies, due to his technical expertise and understanding of how smart contracts functioned. 

He sought to use generative art to build a system that allowed no one to foresee or alter the precise type of asset they would get. At the same time, Snowfro also wished to encrypt the asset’s properties within the code, believing that this would give each iteration more legitimacy. 

He was intrigued by this idea of provenance combined with the variety of generative output.

The uniqueness of his ideas appears to appeal to the general public. In 2021, its first calendar year, Art Blocks has already exceeded $100 million sales volume from over 9,000 traders around the world.

Its popularity skyrocketed in March 2021. Several things may have led to this exponential expansion, including the publication of the Fidenza collection by famous developer Tyler Hobb, as well as community growth and market interest around other NFT projects like Bored Ape Yacht Club.

Final Thought: What Sets Art Blocks Apart from Other NFT Collectible Projects?

Art Blocks is unique among other NFTs because of its surprise element, and it has attracted some substantial price tags. It has a distinct advantage over other NFTs due to its use of algorithms for generative art. It integrates collectors into the creation process, allowing them to mint a one-of-a-kind interpretation of their preferred artist’s concept.

Art Blocks has become a valuable target for NFT investors, especially as the system gains momentum and the curated collections gather more interest. The platform has a ton of potential for collectors, traders, and artists alike. 

What is NFT Metadata & How Does It Work?

The word “meta” is all the rage lately since the Facebook name re-brand, but let’s get our crypto fundamentals in order before everything is referred to as metadata. 

A Non-Fungible Token (NFT) is a token that represents a single specific digital asset, whether that be a .JPEG file, .GIF, .MP4, or whatever else. That file itself can’t be hosted on the Ethereum blockchain, so it’s hosted off-chain. NFT metadata specifies what that data is and includes things like the visual or auditory asset and other information like transactional history. 

NFT metadata is essentially a workaround to avoid the technical and financial catastrophe (or, impossibility, rather) of hosting large files natively on-chain on Ethereum or other blockchain environments. 

For example, if you wanted to run a full Ethereum node, you’d have to download the full Ethereum blockchain of about 1,050 GB (the archival nodes, or the entirety of the Ethereum blockchain since it launched, is about 9,000 GB). 

That’s to run the entire Ethereum network– yes, all ETH-related matters, DeFi, NFTs, and dApps make up just under 1,100 GB. 

In comparison, a 1080 full-feature length movie is about 2 to 4 GB on its own, and most high-quality images can be around 2 to 20 MB. There simply isn’t a way to store these files on the Ethereum blockchain because it would make running the network prohibitively storage and data-consuming.

How expensive are we talking? Gemini estimates that simply storing 1 GB of data on the Ethereum blockchain costs about 17,500 ETH (or $75.75 million as of November 2021). The costs to simply just store a blockbuster movie like James Cameron’s Avatar on the Ethereum blockchain would be more than the costs of making the $237 million film. 

That’s where NFT metadata comes in. It’s a careful balance of utilizing the blockchain without burdening it with the data. 

But, NFT metadata existing off-chain creates a few other issues, which we’ll get into below. 

Let’s Get Technical: NFT Metadata

We’ll use the classic Ethereum ERC-721 token standard for the following NFT discussion.

Each ERC-721 contains a “metadata” string in its definition, which defines what the non-fungible token actually is. For example, this metadata could point to a specific .JPEG, which makes all the difference; although a CryptoPunk .JPEG and a DeadFellaz .JPEG are of comparable file size, they’re worth significantly different amounts. 

The crux of the matter that trips people up about NFT metadata is where exactly files are stored off-chain– is it a Google Drive of some sorts? Is it some Amazon Web Services file storage? Who runs the show of hosting NFT metadata online?

Each NFT references the visual or auditory (image, audio, etc) file that exists online somewhere. It makes a request for the content at a specific location, which returns the content for you to see or hear. NFTs usually point to an IPFS (InterPlanetary File System) hash or an HTTP URL somewhere on the Internet. 

This “somewhere” is generally hosted by the website that hosts the NFT. ERC-721s specify metadata in a standardized JSON (JavaScript Object Notation) format, that looks something like this

The information is stored as a URI (Universal Resource Identifier) inside the Ethereum contract, rather than a JSON; storing a JSON would be prohibitively expensive and resource-demanding. The URI string, however, points to a location where the user can find the token’s JSON description. 

The token’s metadata exists as a permanent, unalterable record on the blockchain, and this record describes what the token represents (its URI string to JSON), the token’s ownership and transaction history. The JSON file contains the image’s name, description, URL of where it’s hosted, and sometimes more granular information like the project’s total supply, type of encryption, and a unique signature. 

Limitations of NFTs 

This JSON metadata typically only identifies the asset, and doesn’t provide much in-depth information beyond the bare essentials. 

The data isn’t very searchable or readable by other smart contracts, which is a kink and limitation of the Ethereum network that multiple projects are attempting to address. 

The data is created by the token minters, who actually own the NFT contract. However, users can’t update the data, for better or for worse, which can be problematic for a few reasons.

For one, as we’ve seen in the evolving Internet ecosystem, links can break. Since the NFT metadata links you to somewhere else to view the art, if that link dies, you’ll essentially be pointing to a very expensive 404 error page. The JSON data can’t be updated by users, and neither can the links be fixed. 

The crux of the issue is that if the data were able to be updated, the inherent value of the NFT could be compromised. For example, let’s say a malicious third-party found an exploit to change all the Bored Ape Yacht Club image metadata with pictures of real-world apes found on Google; the market would respond, and likely negatively.

Hosting Mechanisms also have their fair share of limitations:

  1. HTTP server owners could theoretically change the content of a specific server to whatever they like.
  2. IPFS is designed for decentralized hosting, but is still operated by centralized entities like NFT marketplaces that serve the role of IPFS nodes that keep the gateway live. 

Final Thoughts: What is NFT Metadata Exactly?

As we’ve learned, NFT metadata is the second of the two key pieces to the NFT value proposition. 

The first is that NFTs have a unique ID that distinguishes each token as unique from every other token. The ERC-721 tokenization standard utilizes Ethereum smart contracts to record transfers and changes of ownership of each particular NFT, which is a fairly computation-heavy endeavor. This is why gas fees are generally much higher for trading or minting NFTs compared to simply sending ETH on the network. 

NFT metadata is baked into the second fundamental feature that makes NFTs tick. NFTs can link to data external to their smart contract, essentially allowing the network to reference data that exists off-chain. This keeps the computational costs of running NFTs on a network like Ethereum lower than they would be. 

The Non-Fungible Token that defines the provenance of an asset lives on the blockchain, whereas the asset itself typically lives off-chain. There are few exceptions; for example, OnChain Monkeys is a collection created entirely on chain with a single transaction.  There is no file storage solution needed since the entire collection is hosted on-chain. 

Axie Infinity: Pokémon Inspired Blockchain Game Explained

Axie Infinity is a community-driven blockchain-based digital pet game that enables players to earn money while playing the game. Think of Axie as a hybrid between Pokemon, Tamagotchi, and CryptoKitties.

It is one of the most popular NFT token-based games, with over 19,000 monthly active on-chain users. One of the most notable characteristics of Axie Infinity and other NFT-based games is that users are able to bridge the in-game economy with real-world currency.

Over 25,000 ETH (over $45M) has been traded in the in-house marketplace, with the most expensive Axie being sold for 300 ETH ($540,000.)

About Axie Infinity:

Axie Infinity is a product of Sky Mavis, a game study based in Ho Chi Minh City, Vietnam.

The Sky Mavis and Axie Infinity team includes:

Trung Nguyen, Founder of Sky Mavis and Axie Infinity. He is a serial entrepreneur behind an E-commerce delivery startup called Loship.

Alexander L. Larsen is the Co-Founder of Sky Mavis and Axie Infinity game and is the current Chief Operating Officer of the venture.  He is the business head behind the venture and handles the day-to-day operation of the company.  He comes with a background in e-sport development and is a gamer, gaming competition organizer, and video journalist.

Viet Anh Ho is the Chief Technology Officer at Sky Mavis.  He was previously a full-stack developer and an intern at both Google and Paypal.

  • Tu Doan, art director and game director of Axie Infinity. He is a competitive Pokemon player and created the entire suite of Axie game characters. He also worked on Loship with Trung.
  • Duy Trinh, Lead Animator Axie Infinity. He’s a graduate of a professional Hollywood Animation Studio and works as a freelancer.
  • Quy Dau, Primary Software Engineer. He won the 2016 React Hackathon. He started his first company at the age of 21.
  • Nam Nguyen, Chief Graphic Artist and Designer. 

Launched in 2018, Axie Infinity has quickly grown alongside the rising popularity of NFTs and blockchain-based gaming. 

The Cast of Axie Characters:

Axie Infinity is a decentralized game ecosystem built on the Ethereum blockchain, featuring a cast of digital characters. Per the game’s narrative, Axies are creatures that “love to battle, build, and hunt for treasure.” 

Dubbed a “digital nation,” Axie Infinity presents a landscape in which users can collect, battle, or breed their characters. 

The Axie secondary marketplace

Users can also build a collection of Axies and use them in a wide variety of games within the Axie Infinity world, called the “Terrarium.” 

Axies gain experience points and level up by completing daily activities or through battle with other Axies. They come with specific traits that help determine battle outcomes; some characteristics make them more competitive than others. 

There are over 500 body parts that can be acquired and traded, and each body part enables Axies to perform specific battle moves or receive an overall combat advantage. 

There are four stats that determine a battle outcome: Health (HP), Skill, Speed, and Morale.

  1. Health (HP): How much of a beating your Axie can withstand before it’s knocked down.
  2. Skill: A skill stat determines the amount of damage you do; you can do more damage if you use multiple cards on your opponent during battle.
  3. Speed: Speed is critical because it determines the attack order in a battle. The faster the Axie, the quicker the attack. Speed also comes in handy in defense; faster speeds mean your Axie has a greater chance of avoiding a critical or lethal strike. 
    1. If two battling Axies have the same speed, attack order is determined by the following stat priority: High speed > Low HP > High Skill > High Morale > Low Fighter ID.
  4. Morale: The morale score of Axie decides whether an Axie gets to make a critical strike on an opposing Axie.  It also determines when an Axies is losing whether the losing Axie gets to make a last stand.

The above stats are influenced by an Axies’ class and body parts

Axie Classes:

Axie classes are reminiscent of Pokemon types– each class has certain advantages and disadvantages in combat. Think Rock, Paper, Scissors. There are six common classes in Axies and three secret classes. 

Common Classes: Aquatic, Beast, Bird, Bug, Plant, Reptile.

Secret classes:

  • A “Mech” is a hybrid offspring of a purebred Beast with a purebred Bug Axie.
  • A “Dawn” is a hybrid offspring of a purebred Plant with a purebred Bird.
  • A “Dusk” which is a hybrid offspring of a purebred Reptile with a purebred Aquatic

Axie Advantage and Disadvantage Breakdown: 

Each class has an advantage over two other classes. Similarly, it has a disadvantage against two classes. 

Aquatic class:

  • Advantage: Bugs and Beast Axies. 
  • Disadvantage: Plant and the Reptile Axies.

Beast class: 

  • Advantage: Plant and Reptile Axies
  • Disadvantage: Aquatic and the Bird Axies.

Bird class 

  • Advantage: Bug and Beast Axies
  • Disadvantage: Plant and the Reptile Axies.

Bug class: 

  • Advantage: Plant and Reptile Axies
  • Disadvantage: Aquatic and the Bird Axies.

Plant class: 

  • Advantage: Aquatic and the Bird Axies
  • Disadvantage: Beast and the Bug Axies.

Reptile class: 

  • Advantage: Aquatic and Bird Axies
  • Disadvantage: Beast and Bug Axies.

Axie Body Parts:

Each Axie has six body parts: horns, back, tail, eyes, ears, and mouth. Each body part has the ability to play a role during battle.  Each ability is represented by a card. Only horns, mouths, backs, and tails determine what kinds of cards an Axie can use in battle.

A body part’s “class” also improves the four stats listed above: Health, Skill, Speed, and Morale. 

Axies have around 500 different body parts options, each of which look different and provide relatively unique advantages. 

The Battle is the Game Plan:

There are two ways an Axie can battle: PvE (E stands for environment) in an adventure or in 3v3 (3-on-3) battle against other Axies in an arena.

The goal for each sort of battle is to learn experience (EXP.) 

PvE adventures: For example, one PvE battle takes place in the Lunacia Ruins in the Axie Terrarium. During the PvE, an Axie will face 36 levels of monsters. Successfully navigating each level gives the Axie some experience, allowing it to perform better in the next. The Axie will have to defeat three waves of monsters (on average) in each level to advance to the next stage.

Axies can earn anywhere between 50 EXP points to over 1200 EXP points per level. The EXP varies per level and doesn’t necessarily increase or decrease: for example, Level 30 pays 1209 in EXP points, and Level 36 pays 820 points to clear.

Here is a breakdown of how many EXP points are gained for winning each level:

3v3 (3-on-3) Battles: two teams of 3 Axies each face each other in a 3×3 battlefield. 

The battle strategy generally determines the victor. An excellent plan considers the specific suitable Axies in each team, placement on the battlefield, what moves are utilized, and the order of those moves. 

The Axie with the fastest speed gets to attack first, followed by the opposing side. Each team then takes turns until all three members of one team are defeated.

The victorious party’s members each earn 60 EXPs and the defeated get 20 EXPs each. If all three opposing Axies have been defeated, their rewarded EXPs go to the winning team.

Axie Infinity & the Blockchain: How Does Axie Infinity Work?

Axie Infinity leverages the blockchain to reward and incentivize players for engagement, as well as to provide access to a secondary market in which users can sell their Axies and other in-game objects. Axis and their body parts NFTs, specifically ERC9721 tokens. The Small Love Potion (SLP) is an item used to feed Axies is an ERC-20 token. 

A token introduced at the end of 2020, the Axie Infinity Shard (AXS) is an ERC-20 token that acts as both a governance token, as well as an in-game currency that can be bought, traded, or earned by playing the game. 

Final Thoughts

 One of the most significant driving forces of Axie Infinity’s growth is its community, as dozens of reviews attest.

The community is mostly on Discord, which serves as a chat interface uniting the thousands of monthly users. As one of the most popular blockchain-based games to date, Axie Infinity has earned a first-mover advantage and dozens of long-time users.  If you’re interested in playing Axie Infinity or researching it further, check it out at https://axieinfinity.com/.

NFT Overview: The Bored Ape Yacht Club (BAYC)

The Bored Ape Yacht Club (BAYC) is an Ethereum-based NFT collection of 10,000 unique Bored Apes. Each Bored Ape has a basket of traits programmatically generated from over 170 traits, including expression, clothing, headware, and more. 

Each Bored Ape doubles as a Yacht Club membership card, which grants the holder access to members-only benefits. The first released benefit is a collaborative graffiti board called THE BATHROOM, a digital board likened to a dive bar bathroom wall. 

BAYC holders get access to the BAYC Discord, a server where owners chat and hang out. 

Perhaps the most notable advantage of the BAYC is access to additional NFT collectibles such as Bored Ape Kennel Club dogs, which are usually airdropped for free to wallets holding a BAYC NFT. These new NFTs are often resold for decent chunks of change.

BAYC #8287

Future benefits plan to be unlocked as the project progresses along with its roadmap. 

Ape holders also have full commercial usage rights over their NFT.

Bored Apes became incredibly popular in the throes of an early-2021 NFT profile picture wave, and they have become particularly popular among NFT-savvy celebrities. 

About Bored Ape Yacht Club

The Bored Apes are ERC-721 tokens on the Ethereum blockchain, and are hosted on IPFS. 

When the project launched in April 2021, an ape could be purchased for just 0.08 ETH. Thirty apes were withheld from the initial sale, and were earmarked to be used for giveaways, puzzle rewards, and the four creators. 

Today, Bored Apes regularly sell for six to seven figures; a collection of 101 Bored Ape Yacht Club NFTs recently sold for a whopping $24.4 million at a Sotheby’s auction in September 2021. 

BAYC has generated upwards of $1 billion of trading volume for the original BAYC and its variant sets, like Mutant Ape Yacht Club and Bored Ape Kennel Club.

The BAYC project was created by Yuga Labs, a group of four friends under pseudonyms: 

  • GARGAMEL. 
  • GORDON GONER. 
  • EMPEROR TOMATO KETCHUP. 
  • NO SASS.

The official BAYC site can be found here.

Bored Ape Yacht Club Collaborations and Airdrops

The BAYC has seen two airdrops:

  1. Free Bored Ape Kennel Club dog NFTs
  2. A “mutant serum” NFT that generated a Mutant Ape Yacht Club NFT. 

In August 2021, Bored Ape holders were given a “mutant serum” which allowed them to mint a free Mutant Ape in the likeness of their original form. 

 

Yuga Apes also listed 10,000 new Mutant Apes for sale that anyone could buy for 3 ETH, all of which sold out in under an hour, generating $96 million for the project. 

Notable Bored Ape Yacht Club Holders

One of the first athlete celebrities to buy a Bored Ape Yacht Club NFT and use it as a social media avatar was three-time NBA champion Steph Curry, who purchased an Ape for $180,000 in Ethereum in August 2021.

Steph Curry’s Twitter with a BAYC profile picture.

The list of BAYC athlete celebrities includes the NBA’s Josh Hart and Tyrese Haliburton, the NFL’s Dez Bryant and Von Miller, and artists like The Chainsmokers, Waka Flocka Flame, and Jermaine Dupri.

Plenty of corporations and publications have aped into the BAYC, including Arizona Iced Tea. 

Final Thoughts: What’s Next for the Bored Ape Yacht Club

Among future NFT drops (unannounced), the BAYC plans to launch an ERC-20 token in Q1 2022. The mechanics and functionality of the token are currently being smoothed over, but some speculate it could work as a DAO governance token, or perhaps something to help the project expand into DeFi. 

The BAYC is regarded as the most valuable NFT project launched in 2021 in terms of its community and market volume, and it’s nestled into the rankings just behind Larva Labs’ CryptoPunks. 

Mutant Ape Yacht Club #26574 (source: OpenSea) – You’ll notice this one is a “mutant” version of the BAYC in the beginning of the article.

Perhaps the most notable metric for the BAYC success is its secondary market activity– the project has taken on a life of its own due to an active, and now increasingly more affluent, the base of users. The most popular BAYC secondary market is on OpenSea

As BAYC helps lead the charge for NFTs as profile pictures, NFT fans would be keen to observe how certain projects develop into status symbols– and how quickly a project can transition from a quiet launch of .08 ETH to selling for millions in just months.