Azuki NFT review: The anime avatar project killed by the founder

Despite the hundreds, possibly thousands, of NFT projects launched since the NFT avatar scene exploded in early 2021, not many went from zero to hero, and even fewer circled all the way back. Azuki’s story is one of these: one of reaching the absolute heights of hype and falling into relative mediocrity.

The rise

Launched in January 2022 by four anonymous founders, Azuki was one of the few avatar NFT collections that everyone thought had done everything right. The execution from Chiru Labs’ part, the startup behind Azuki, was so good that many were quickly convinced that the project could turn out to be “the next Bored Ape Yacht Club” – then and still the most valued NFT collection in the nascent industry . Christian Williams, editor-in-chief at Crypto Briefing, wrote a column in April praising the collection and advising teams hoping to create the next six-figure blue chip avatar to note Azuki’s superb execution.

And back then he wasn’t too far off the mark. Azuki’s art was – and still is – a cut above the rest. The teaching: first class. The community was alive and growing. The road map, or as Azuki called it, the “mind map”, was promising and well thought out, but perhaps most importantly, it existed. Many NFT gatherings of this nature don’t have a roadmap at all, let alone a team capable of executing it. Azuki seemed to have everything and was lucky enough to gain recognition from society. The 10,000-item collection sold out upon release and was minted for approximately 1 ETH each. Sales on the secondary market immediately began to increase, reaching a floor price of around 7 ETH within just days of release and around 15 ETH by the end of the month.

In mid-March, the collection’s floor price dropped to around 9 ETH, with interest waning a bit, but then Chiru started delivering surprises the community couldn’t get enough of. On March 30, the team airdropped 20,000 “something” NFTs to Azuki holders, generating massive interest from speculators in both the fundraiser and the defunct stuff. A day after the release, the unwrapped digital gifts – later unveiled as Azuki sidekick avatars named BEAN— Reached a floor price of around 3.14 ETH, putting the cumulative value of the airdrop at over $213 million. This equated to a payout of around $21,000 for each Azuki avatar collectors held.

Ahead of the airdrop, the collection’s floor premium doubled from around 9 ETH to around 18 ETH, and within a few days of the drop, it nearly doubled again, reaching around 34 ETH, then worth about $115,000. In April, skaters on the Internet at the top of the hype ramp and did Bean plants and attracts awe and applause from most everyone in the digital collecting community. That’s when chatter that Azukis could reach blue chip status and even potentially flip BAYC began to increase on NFT Twitter. The floor price on BAYC in April went from around 110 ETH to the all-time high of around 155 ETH, while Azukis traded at around 30 ETH. Yet there was still talk of the reversal, and many collectors seemed to believe it.

However, that was until one of Azuki’s anonymous founders went under Zagabond on Twitter, he naively decided to make a serious mistake: talk about his past failures.

Fallen from grace

On May 9, Zagabond published a blog post titled: “A builder’s journey.” In it, he opened up about his past mistakes in the NFT space and outlined some of the lessons he learned on his journey. “In these formative times, it’s important that the community encourages creators to innovate and experiment. In addition, each experiment with key learning,” he said.

While his intentions may have been pure, in retrospect, it was one of the worst mistakes Zagabond could make, as it only tarnished the impeccable brand Azuki had built so far by tying it to full projects that many in the community later went on to brand. as outright fraud. He revealed that he had led CryptoPhunks, Tendies and CryptoZunks – three NFT projects that would eventually fade to black.

CryptoPhunks was hit with a Digital Millennium Copyright Act (DMCA) removal request from CryptoPunks – the first NFT collection to reach blue chip status – after which Zagabond was forced to abandon it. But he didn’t do it without first making bank, as a Twitter user pointed out. According to on-chain data, months after CryptoPhunks broke, the creator executed a “wash trade” on NFT marketplace LooksRare for a profit of 300 ETH after increasing the creator royalty rate to 5%. Wash trading is a form of market manipulation performed to artificially inflate trading volumes for a specific asset. It is illegal in traditional markets, as increased trading volumes can mislead investors into thinking there is genuine interest in the asset.

Zagabond’s second NFT experiment, Tendies, failed from the start, with only 15% of the collection minted at launch. However, a collector will go on Twitter by 2070 pointed out that Tendies was actually a rug cover. According to the anonymous collector, who allegedly participated in the Tendies coin, the project stopped all activity after launch, abruptly deleted all social media and closed the Discord channel within a month of the mint.

With CryptoZunks, Zagabond was kicked out for engaging in questionable behavior to promote the project on social media. Ahead of the launch, he allegedly posed as a woman named Amanda and used a female CryptoZunk profile picture on Twitter. To many observers, Zagabond characterized himself as an opportunistic NFT entrepreneur who jumped from one project to the next with little regard for investors before striking gold.

To top it all off, when Zagabond struck gold with Azuki, he somehow managed to turn it into management by severely damaging the project’s reputation. In the days following the publication of his blog post, Azuki’s price floor more than halved, plunging from around 20 ETH to about 7.5 ETH.

In-game status

While many NFT projects have come and gone over the past year, the internet skater’s fall from grace will likely remain marked in the NFT history books as one of the worst in history. Not because Azuki hit an absolute rock bottom – far from it – but because it was one of the only projects that at least seemed to have a real chance of toppling the two industry darlings, CryptoPunks and Bored Apes.

And while the Azukis still command a high price, with the collection still the eleventh largest by total market value, their fall – measured from the record to current price – is hard to overstate. At all time highs, Azukis’ floor price was around $115,000. Today it is around $12,000, marking an almost tenfold drop from its peak. In comparison, CryptoPunks and BAYC fetched around $440,000 and $435,000 at their record highs, and today trade for around $127,000 and $114,000 respectively.

The upside to this story is that Azuki’s decline can be used to teach NFT collectors a valuable lesson: every reputation-based project, even the most promising, is one naive mistake from disappearing into obscurity.

Azuki’s story isn’t finished, and collectors may well witness a redemption arc, but the age-old adage still applies: reputation is like a house of cards – it takes a long time to build and is quickly blown away.

Disclosure: At the time of writing, the author of this feature owned ETH and several other cryptocurrencies.