When did you first hear about NFTs?
Wong Kar-wai cast an unpublished footage from the first day of the film "Fantasia" into an NFT, and Quentin Tarantino announced plans to auction seven "exclusive scenes" from his film Pulp Fiction in NFT form. SM Corporation, the "giant" of The Korean idol industry, announced its entry into the NFT business. NBA star Steven Curry bought an NFT ape as the avatar of a social networking site. Tencent sent NFT souvenirs to every employee. The 24-year-old young artist made $300,000 a year selling NFTs. NFTs are like monsters that have only broken into the public eye, with fresh faces and unknown origins. But what is an NFT?
What is an NFT
NFT (Non-Fungible Token) is a non-homogeneous token based on blockchain technology. Compared with the most famous application of the blockchain, "Bitcoin", Bitcoin is a homogeneous token, mixed together can not distinguish, and each NFT is unique, which means that it can map videos, sounds, images in the virtual world, a variety of native digital creations, and can also map everything in real life. NFTs redefine "ownership."
If you buy an NFT artwork, such as a JPG image, you will no longer be afraid of its fakes and replicas, because your ownership of it is already written on the underlying blockchain of the NFT. The change of NFT ownership will be written on the blockchain, open, transparent, and cannot be changed. When combined with the metaverse, NFTs can provide proof for digital assets that your accessories, clothes, and even land in the virtual world really belong to you.
For the art market, NFT is a technology — auctioneers don't have to provide any more evidence to prove that the digital artwork at auction is "authentic," and backs it up with the almost flawless algorithmic logic of the entire blockchain. Digital art auctions, and their secondary markets, are on fire.
In March 2021, auction house Christie's first NFT art auction ended. Digital artist Beeple's NFT work Everydays: the First 5000 Days fell for $69 million.
The fantasy drift of ten thousand apes
Ten thousand apes awaited birth in the void. Their features are randomly generated by the program, with different combinations of bodies, heads, hats, and clothes. The process is like opening a blind box, and according to a New Yorker interview with the creative team of the NFT series Bored Ape Yacht Club, each image is hidden until the original collector pays for it.
The blockchain records the birth date of each "boring ape" and their original collectors. On the evening of April 22, 30 "boring ape" NFTs were the first to be "cast". The next day, the ownership of the remaining 9970 digital apes was sold at a unit price of 0.08 ether (about 1449 yuan), and the various forms of "boring ape" images were unveiled one after another, according to media reports, on April 30, the series was officially launched, and it was sold out on May 1.
Some features are rare and therefore precious, such as laser eyes and rainbow skin. If collectors can have such rare "boring apes", the profit margins in the secondary market will be huge. For a small number of cryptocurrency "big guys", at the beginning of the NFT work, buying a large number of NFTs in bulk and selling them after the price rises is a common strategy.
In an interview with The New Yorker, the author, Gorner, explains the origin of the name "boring ape": "In the crypto industry, you buy a new token or NFT, at the risk of losing a large amount of money, known as 'stud' (Aping in, borrowed from the ape word Ape). ”
On May 1, a buyer bought 1250 "boring apes" in one go, quite like the "boring ape" big brother (there is only a long list of buyers' wallet addresses on the transaction record, for the convenience of narration, it will be called "Big Brother" later). He "studed".
But if only from the "Boring Ape" series on the surface of the follow-up resale transactions, these 1250 apes did not make "Big Brother" the most courageous gold digger in the market. According to the sale amount of second-hand transactions, "Big Brother" earned about 34.78 million yuan with "boring apes" alone, ranking third among all traders. The most outstanding buyers, from the obvious point of view, late entry, and later only at a cost of 170,000 yuan, the final income of 48.2 million yuan, is a "Monopoly" who made a lot of money (for the convenience of narration, he is called "Monopoly" later).
On the "Boring Ape Market", the starting line does not determine the ending. With the first-mover advantage of 1250 "boring apes", why didn't "Big Brother" make the most money? Maybe it's because he shot too early.
He sold the 1734 "Boring Ape" for about 56,000 yuan four hours later. More than three months later, no. 1734 "Boring Ape" sold for 8.856 million yuan, becoming the most expensive "Boring Ape" resold by "Big Brother". However, Big Brother did not finish all the hole cards. Now he still holds 24 "boring apes" in his hand, waiting for the price to sell.
Boring Ape: Identity Label or Financial Product?
"Boring ape" is fashionable. It's not just a pixel image, an avatar on a social networking site, it also brings collectors an entire community, various status symbols, "a bit like wearing a high-end watch or rare sneakers," as one "boring ape" collector described. It was also one of the first clubs to give individual buyers the right to commercialize "boring apes."
But these benefits aren't the only reason for "boring apes" to sell sky-high prices today. Most of the time, the "boring ape" is more like a financial product to the buyer. Its price has been inflated ingredients, among which there are "Monopoly" clever hands to promote.
He rarely photographed the "boring ape" himself, and was involved in only two of the more than a hundred deals he was involved in. Most of the time, he takes ownership of the "Boring Ape" from someone else, and in the "Boring Ape" transfer record on the blockchain, the other party does not charge him a fee.
On OpenSea, the world's largest NFT trading platform, "Monopoly" and 4 buyers with close ties to him have similar usernames, with "MightyMaxy" as the main body, followed by a number. Plus them, there are at least 14 OpenSea users with such names in this format.
The four buyers who often work with Monopoly used Packaged Bitcoin (WETH), a token more suitable for bidding on NFTs in the secondary market, when they auctioned "Boring Apes". The blockchain itself is a big ledger, and based on the transfer records they leave on the blockchain, "Monopoly" will transfer money to these buyers, before or after the transaction, the amount is slightly higher than the final transaction price. The buyer will exchange the bitcoins transferred by Monopoly for WETH, auction in the "Boring Ape", and transfer the purchased "Boring Ape" to him, and the "Monopoly" will usually sell the "Boring Ape" after a few hours.
These buyers have a very close relationship with the "Monopoly", and occasionally transfer the boring ape in their hands to others "for free", but not much. Among them, the contact between "Buyer No. 1" and "Monopoly" occurred 56 times, concentrated in August; "Buyer No. 2" 20 times, which occurred in July; "Buyer No. 3" 10 times; "New Favorite" of "Monopoly", which occurred in the last two months; and "Buyer No. 4" 6 times, mainly in September.
These 4 buyers, including others with similar username formats, have left an intriguing footprint on OpenSea. They either stopped being active 3 months ago or are still active, but without exception, they all participate in a large number of auctions at the same time. Buyer 3 transferred the auction of "Boring Ape" of No. 6112 to "Monopoly" on November 17, and records show that on December 6, "Buyer No. 3" still participated in the auction of "Boring Ape" of No. 6112, seemingly not intending to actually auction, but to increase the volume of the "Boring Ape" auction.
Unlike the "Monopoly" and his "Legion", the buyer who spends the most money, the "Rich", buys and sells by himself, and the achievements are extraordinary. Of the 20 monkeys with the highest value at the time of data crawling, 7 of them were involved in the transaction.
At this point, every "boring ape" is very expensive.
At the same time, according to the Smart Contract, the NFT can automatically transfer the transaction price to the creator in a certain proportion at each resale. Therefore, the creative team of "Boring Ape" also achieved wealth freedom by relying on these apes who were set to "become idle because they achieved wealth freedom by devoting themselves to the crypto field".
The fiery market and its entrance fees
The hype of NFT series like the "Boring Ape" series has become a beautiful talk, attracting investors, creators and even ordinary people to flock to the NFT market for fear of missing the next opportunity for "wealth freedom".
A technical team called Moonstream has made public a dataset covering 9,000 NFT projects from April to late September 2021, recording the sender, receiver, value, timestamp, and location of each transaction in the blockchain.
Data analysis found that in terms of transaction volume, the top 20 NFT series accounted for 53% of the total transaction volume of the market, but in terms of volume, they only accounted for 0.3% of all 6283 series.
That is to say, the head effect of the NFT market is still very obvious.
What if an individual wants to buy an NFT? The Paper conducted an experiment and found that opening a virtual currency wallet requires an entrance fee called "Gas fee", which costs 0.03 ether (ETH), which is about 1,000 yuan. The "Gas fee" is the fee that needs to be paid to "go on the blockchain", and the higher the "Gas fee", the greater the chance of being on the chain. Only if it is successfully on the chain, the transaction can be considered effective.
If someone is interested in buying an NFT, they have to pay this thousand yuan entrance fee, and the NFT that the experiment wants to buy is priced at only 0.003 ETH, about 83 yuan. The high entrance fees discourage ordinary people.
So when to enter, is also a kind of learning.
Trend of Ether price changes
Dating back to December 17, 2016, an Ether coin is only worth $7.82, and it only takes 1.5 yuan to open a wallet. Early players of Ether had a large advantage.
Butrin, the founder of Ethereum, said of NFTs: "NFTs will always exist, but it may be too early to declare NFTs to mark a paradigm shift. NFTs have yet to go through a full cycle of booms and busts like other cryptocurrency applications. Of course, so far, it looks like it has potential, let's wait and see. ”