Of course, it comes with all the usual disclaimers — not investment advice, do your own research — but to me it looks like we’ve entered, or are entering a turning point, at least in terms of the performance of ETH versus the performance of my ETH-priced NFTs.
This is the sort of thing I track somewhat obsessively and on a high level, the performance of my ETH-based NFTs — which granted is a peculiarly insular metric — is now better than the performance of my (and your) ETH, in relative terms.
The following graphs the period June to September 2022, so starting when prices for many NFTs were actually increasing but when ETH was already down more than 50% from its all-time-high; already under $2,000.
Since then ETH has dropped further but NFTs have dropped a lot more, a one stage underperforming the already underperforming ETH by 20%.
In recent days, however, NFTs are on the up; their relative performance also driven by ETH slipping from over $1,700 to $1,250 being the recent low. The performance of my NFTs has also been positively boosted by DigiDaigaku’s explosive rise.
But let’s not get too bullish. All I’m suggesting is that I think we’ve reached a local equilibrium in term of relative price. Of course, it could be a false bottom. ETH could still see go down, a lot. That would also impact NFT prices, although my view is ETH can drop more in percentage terms than NFTs can.
And let’s not get too bearish either. The upside is that if/when ETH claws its way back towards $2,000, that’s also going to be very good news for NFTs.
In that way, I think NFTs offer limited downside but heavily compounded upside.
Indeed, with my blockchain gaming hat on, I’d also point out that we’re now seeing value accrual via the slowly accruing utility of some of the most anticipated games.
Examples
The Sandbox is now in its Alpha 3 and its land NFT floor is up 50% in September
Champions Ascension is rolling out its ‘pub hub’ to all NFT holders; floor price is at an all-time-high
MetalCore is launching its first playable in October, NFT floor steady
Shrapnel’s NFTs are at an all-time-high
Azra Games just dropped its first collection, with The Hopeful being a free mint of 5,555 items, currently trading at a floor of 0.4 ETH.
Splinterlands sold out three pre-sales for new assets
Blankos Block Party is the first blockchain-enabled game live via the Epic Game Store, and with a 4.7 user review score
I’d even argue Axie Infinity is showing strong signs of resurrection!
More generally, I’d also say the quality of projects that I’m seeing with my VC hat on have improved significantly in the past six months. Simply put, there are a lot of great, well backed, games being planned and being built, even if they haven’t announced the fact yet.
But to return to the starting caveats … while I feel increasingly positive, I’m also cognitive that much of the world is not, so I also expect choppy waters ahead.
Of course, I also think those chops will be positive for crypto more generally in the long term, but then I would think that wouldn’t I?
DYOR…
This Substack is sponsored by Hiro Capital: All-in on the future brilliance of current gaming entrepreneurs.
But Isn’t Community Layer 0 news?
Google’s head of strategy, cloud, and web3 Richard Widmann hasn’t read the memo about community. He thinks Google Cloud is Layer 0. I guess that’s the difference between working for Google and trying to build a community.
Still, it’s good to see Google Cloud getting more involved in blockchain infrastructure. It’s already supporting node validation for Ronin and Flow.
More Guild of Guardians Affiliate news
Yesterday’s attempt to garner clicks was not a success. So a reminder: Immutable’s forthcoming mobile RPG Guild of Guardians wants your email address for its pre-registration list, and I want to collect the 1 GOG token per signup through my affiliate link.
Because if I collect enough GOGs, I can buy a guild NFT and you can all join up and we can all earn lovely rewards.
Star Atlas Not Vaporware news
Ambitious Solana-based space metaverse Star Atlas has announced it’s going to launch its pre-alpha demo. This will enable players to see their in-game ships within Star Atlas’ Unreal Engine 5 game client, which will be downloadable from the Epic Game Store soon.
Access will be award via a key, which NFT holders can gain by enrolling a ship in one of the game’s factions; a metagame that’s been active for several months.
Developer ATMTA also announced its Foundation SDK, an open-sourced tool that will enable any game developer to use Unreal Engine 5 with Solana.
Further news includes Star Atlas: CORE, an episodic graphic novel, and the ability to stake the game’s ATLAS utility token via the Star Atlas DAO interface.
Where Now For DAOs news?
Following the previously discussed CFTC action against the co-founders of the bZx DeFi protocol and also the Ooki DAO that took over its governance, there’s an interesting interview from The Block with lawyer Matthew Nyman from CMS London about how this might play out more widely in terms of the legality of DAOs.
The basic issue is that because DAOs aren’t legal entities, the current reading of US law is that everyone actively involved in a DAO c/would be liable for lawsuits and/or unlimited fines.
Indeed, that’s the very reason company structure was created: to enable individuals to control liability arising from their combined actions. They’re called ‘limited companies’ because the shareholders’ liabilities are limited to the capital invested with their personal assets protected in the case of insolvency.
As for the Ooki case, one key argument could be “whether a group of people operating through pseudonymous wallets connected via software counts as a group of people banding together?”
But until US law is revised to specifically deal with such organisations, the two obvious options are either to attempt to act in a totally anonymous manner — which is impossible for existing DAOs to do — or to attempt to operate from jurisdictions such as Wyoming where DAO are now legal entities, although it’s not clear how strong a protection this would be in practice.
From Robinhood To Axie Infinity news
Continuing its impressive hiring spree, Sky Mavis has appointed James Nguyen, previously the chief compliance office of Robinhood, as its first general counsel.
Nguyen will lead legal and regulatory affairs for the company, including building a legal department supporting Sky Mavis’s global business and operations.
Nguyen is a graduate of Berkeley Law, Harvard University, and California State University, and is fluent in Vietnamese; useful when working for an Vietnamese company!
Lessons In Code Is Law news
I won’t pretend that I understand anything about MEV Bots other than the surface level that they see if they can generate profit by frontrunning any transactions waiting to be included in the next Ethereum block.
Nevertheless, it’s always fascinating to get a glimpse into the dark forest, which in this case saw a notorious bot — which had just completed a complex $1 million snipe — lose that ETH and its entire wallet (total value $2.5 million) to an even more complex attack.
The resulting conversation between the two wallet owners is also hilarious given that these characters know that the only rule in such circumstances is “code is law”.