The Azuki project killed by its founder goes from $115,000 to $12,000!

Despite the hundreds, if not thousands, of NFT projects launched since the NFT avatar scene exploded in early 2021, few have gone from zero to hero, let alone made it back. Azuki’s story is one such story: that of reaching the absolute heights of hype and falling into relative mediocrity.

the ascent

Launched in January 2022 by four anonymous founders, Azuki was one of the few NFT avatar collections that everyone thought had done everything right. The execution of Chiru Labs, the startup behind Azuki, was so good that many were quickly convinced that the project could become “the next Bored Ape Yacht Club” – then and still today the most prized NFT collection in this industry.

The community was vibrant and growing. The roadmap, or as Azuki called it, the “mind map“, was promising and well thought out, but perhaps more importantly, it existed. Many NFT collections of the genre don’t have a roadmap at all, let alone a team capable of executing it. Azuki seemed to have it all and was lucky to be recognized by the community. The 10,000-coin collection sold out upon release, priced around 1 ETH each. Secondary market sales immediately began to increase, reaching a floor price of around 7 ETH in the days following the release and around 15 ETH by the end of the month.

In mid-March, the collection’s floor price dropped to around 9 ETH and interest blunted slightly, but then Chiru started offering surprises the community couldn’t live without. On March 30, the team dropped 20,000 NFTs”Something” to Azuki holders, reigniting massive speculator interest in the collection and “Something” dropped. A day after the airdrop, the unwrapped digital gifts—later unveiled as avatars of Azuki called BEANZ—hit a floor price of around 3.14 ETH, bringing the cumulative value of the airdrop to more than $213 million. This equates to a payout of approximately $21,000 for each Azuki Avatar Collector held.

In the lead up to the air drop, the floor price of the collection doubled from around 9 ETH to around 34 ETH, or an approximate value of $115,000. In April, internet skaters were at the top of the digital collectibles hype ramp. That’s when talk of Azukis potentially achieving blue chip status and even potentially buying out BAYC began to heat up on Twitter. In April, BAYC’s floor price fell from around 110 ETH to its all-time high of around 155 ETH, while Azukis were trading at around 30 ETH. Still, talk of flipping continued, and many collectors seemed to believe it.

However, that was until one of Azuki’s anonymous founders, Zagabond naively decided to make a big mistake: talk about his past failures.

The Fall From Grace

On May 9, Zagabond published a blog post titled: “A Builder’s Journey.” In it, he opens up about his past failures in the NFT space and lays out some of the lessons he’s learned from his journey. “During these formative periods, it is important for the community to encourage creators to innovate and experiment. Plus, each experience comes with key learnings“, did he declare.

Although his intentions were pure, in hindsight, this was one of the worst mistakes Zagabond could make, as it only tarnished the impeccable brand that Azuki had built so far by associating it with questionable projects that many community members later called it an outright scam. He revealed that he ran CryptoPhunks, Tendies, and CryptoZunks, three NFT projects that eventually disappeared.

CryptoPhunks was hit with a Digital Millennium Copyright Act (DMCA) after receiving a withdrawal request from CryptoPunks – the first NFT collection to achieve blue chip status – Zagabond was forced to drop it. But he didn’t do it without getting rich, as pointed out a Twitter user. According to on-chain a few months after CryptoPhunks went bankrupt, its creator executed a “wash tradeon the NFT Marketplace LooksRare for a profit of 300 ETH after increasing the creator’s 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 because inflated trading volumes can mislead investors into believing that the asset is generating genuine interest.

Zagabond’s second NFT experiment, Tendies, failed from the start, with only 15% of the collection minted at launch. However, a collector who goes by the name 2070 on Twitter has indicated that Tendies was actually a set-up. According to the anonymous collector, who allegedly participated in the sale of Tendies, the project ceased all activity after the launch, abruptly deleted all its social networks and closed the Discord channel within a month of the sale.

Along with CryptoZunks, Zagabond was ousted for engaging in questionable behavior to promote the project on social media. Prior to launch, he allegedly posed as a woman named Amanda and used a female CryptoZunk profile picture on Twitter. To many observers, Zagabond presented himself as an opportunistic NFT founder who jumped from project to project with little regard for investors until he struck gold.

To top it all off, when Zagabond struck gold with Azuki, he managed to turn it into lead seriously damaging the reputation of the project. Within days of publishing his blog post, Azuki’s price more than halved from around 20 ETH to around 7.5 ETH.

The state of play

While many NFT projects have come and gone over the past year, the Internet skater’s disgrace will likely go down in the NFT history books as one of the worst in history. Not because Azuki hit rock bottom, far from it, but because it was one of the only projects that seemed to have a real chance of dethroning the two industry darlings, CryptoPunks and Bored Apes.

And although Azukis are still very expensive, with the collection remaining the eleventh largest by total market capitalization, their fall – measured from their peak to their current price – is hard to overestimate. At their peak, the Azuki floor price was around $115,000. Today it is around $12,000, which is almost a tenfold drop from the high. For comparison, CryptoPunks and BAYC fetched around $440,000 and $435,000 at their all-time highs, and today they are trading at around $127,000 and $114,000 respectively.

The bright side of 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 away from falling into obscurity.

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

To display Hide the table of contents

Leave a Comment