The Moonbirds and Otherside NFT launches seemed like the last big excitement for the NFT market. Since then, floor prices of most NFT collections have dropped and liquidity remains low. Accompanying crypto market sentiments, NFT market sentiment is relatively negative.
Among the top NFT collections, Azuki NFT has seen its floor price fall from 20ETH to 10ETH, just two days ago. At time of writing, floor price has dropped further to 8.65 ETH. Aside from general market sentiment, this uproar can be attributed to Azuki’s pseudonymous founder, ZAGABOND.ETH.
Credit: @ZAGABOND / Twitter
On 10th May, ZAGABOND.ETH published a blog article titled “A Builder’s Journey”. He described his mental journey of continuous entrepreneurship in Web3 and expressed how past failures gave him valuable experience, contributing to Azuki’s success. This sparked backlash and criticism.
His article mentions three NFT projects: CryptoPhunks, CryptoZunks and Tendies, which are deemed as ‘rug pulls’ by many. Many feel that he should have doubled down on improving the projects instead of abandoning them. Twitter user @zachxbt even made a thread detailing why these projects are ‘rugs’ — failed promises, deceptive marketing and developers leaving with no handover. Above all, people are upset that ZAGABOND could betray the Azuki community when Azuki no longer has value; essentially taking Azuki holders’ money and leaving them in the lurch.
Credit: @zachxbt / Twitter
Soon after the blog article, ZAGA did an AMA which failed to regain investor confidence. Azuki has always declared that “it is owned by all: (a) global community working together to build a decentralized brand of the future.” but with the founder's history, this has become inconclusive.
Perhaps we can consider a different viewpoint here. In Web2, the term ‘serial entrepreneur’ refers to someone who learns from their failures and turns them into greatness. Many of these entrepreneurs are even celebrated for their successes. But why does ‘serial entrepreneur’ in crypto and NFTs automatically relate to ‘rug pulls’?
Many people have defended ZAGABOND on the grounds that Azuki has shown its power in storytelling and IP brand building — two of the most important capabilities when operating an NFT project. The team’s ERC721A token standard was also a proven success. Azuki’s team effort cannot be denied.
From the change in floor price, we could deem this uproar a crisis. It’s now up to Azuki to turn the situation around. Meanwhile, both developers and users should consider these questions when evaluating an NFT project:
- Does the NFT have fundamental value? If none, how can we create it?
- Does the NFT project have an exit strategy?
Currently, we only see 2 practices. The first is to issue tokens while the other is to be acquired by a larger company. These practices are similar to Web2 (IPO and M&A). The rest may simply hold or even do rug pulls.
- When and how does a NFT project decentralize its control to the community?
We see the success of mfers, managed totally by the community. On the other end of the spectrum, there is Yuga Labs. Community is definitely important but a right balance struck between the project team and the community would be key to make a NFT collection sustainable.
The views expressed in this article are the author's alone and do not necessarily represent the views of ApolloX.
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