Azuki NFT drama 🎭 – by William M. Peaster

Metaversal is a Bankless newsletter for weekly level-ups on NFTs, virtual worlds, & collectibles

Dear Bankless Nation,

If you asked around about Azuki NFTs this past weekend, surely more than a few people would’ve said the project’s creators were among the best positioned to give Yuga Labs and BAYC a run for their money in the years ahead. 

That may still be the case!

Yet while the Azuki team seemingly had a spotless image previously, their reputation took its first big hit on Monday when a founder revealed how Azuki had essentially risen out of the ashes of three abandoned NFT projects. 

“Abandoned” is one way of putting it, though critics say the projects in question were actually rugpulls. Let’s lay out the big ideas and get you up to speed on all the chatter for today’s Metaversal.

-WMP

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Setting the scene

The disastrous $UST de-pegging event, which saw the value of Terra’s native dollar-pegged stablecoin temporarily crater below $0.70, made Monday, April 9th, a day for the cryptoeconomy’s history books in its own right.

Accordingly, surges of panicky DeFi activity combined with growing concerns over macroeconomic conditions led to risk-off movements across all top cryptocurrencies and NFT collections on the day. 

Thus many NFTers were already baffled and trying to wrap their heads around all the crypto and UST chaos when they were later hit with yet another dramatic blindside, this time from within the NFT ecosystem in the form of this post from Zagabond, one of the founders of Azuki:

The revelations

“Builders must learn from each experience, coming back to the drawing board with something innovative and significant each time. […] This team pushes tech forward, and advocates for meaningful art, as well as deep, immersive storytelling. Azuki is our vision for the future of web3.” — Zagabond

Dubbed A Builder’s Journey, Zagabond’s confessional post details how Azuki was “built on learnings from … other projects, which taught me to lead, not follow.” The other projects Zagabond admitted to building were CryptoPhunks (an anti-Larva Labs CryptoPunks parody project), Tendies (a chicken-themed riff on the My Fucking Pickles collection), and CryptoZunks (billed as “the last 10,000 CryptoPunks”). 

Zagabond concluded the write-up by saying these projects informed the creation of Chiru Labs in September 2021 and that Chiru Labs wouldn’t have been able to make Azuki what it is without these experiences. He also doubled down by saying “Azuki is our vision for the future of web3” and that the project was part of a broader movement.

“I joined the crypto space years ago because I believed that the web3 community collectively could shift the balance of power away from centralized web2 companies,” Zagabond said. “Let’s continue to share our learnings in order to push the space forward.”

Critics cry foul

Learning from past experiences is the basis of progress. But what those experiences were definitely matters, especially if other people were repeatedly taken advantage of along the way. Do Zagabond’s now abandoned pre-Azuki projects meet this bar of manipulation? Some people say no, or at least aren’t so sure:

However, plenty of others have gone further in outlining and criticizing the implications of the revelations. For example, renowned on-chain sleuth ZachXBT posted a thread highlighting the controversies associated with Phunks, Tendies, and Zunks, and the various stories aren’t pretty. 

Loose on morals, fast and fickle with development. That’s been the model of these past projects, so the unsavory revelations have cast a newfound pall over the Azuki collection as such. 

Aesthetically, organizationally, and technically speaking, Azuki is certainly the highest quality work Zagabond and co. have done yet, and it may indeed be the “forever project” they settle into and find a lot more success with over time. Regardless, the collection’s links to multiple corrupt efforts has now called its future prospects into question like never before. 

The matter of timing

These links to controversial collections are obviously very unflattering for Azuki’s creators, which is why it’s all the more interesting that Zagabond voluntarily admitted them how he did. What gives?

Some people speculated that Chiru Labs was trying to bury the hatchet on bad news (which they figured would come out eventually) on a day when the $UST chaos could mute some of the impact. Other rumors have suggested the announcement was an attempt to preempt a third party from breaking the news first. We may never get the actual answer, but the genie’s out of the bottle in any case. 

Azuki price action

After trading at +31 ETH just one week ago and as high as 22 ETH on Sunday, floor-value Azukis were fetching sellers just shy of 15 ETH by the end of yesterday. BEANZ, the first extension collection for Azuki holders, have faced a similarly sharp downturn, as the project’s floor prices have slid from 6.86 ETH to 2.19 ETH over the past week. 

The big picture

Chiru Labs may take the Azuki universe on to new heights from here, and these revelations may end up just being a blip in the road for them. However, a considerable number of people have rightfully lost confidence and trust in the project in light of these controversies, and that’s the Azuki project’s cross to bear for now. How or if they’ll redeem themselves to these dissatisfied people remains to be seen.

Action steps

Author Bio

William M. Peaster is a professional writer and creator of Metaversal—a Bankless newsletter focused on the emergence of NFTs in the cryptoeconomy. He’s also recently been contributing content to Bankless, JPG, and beyond!

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Not financial or tax advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This newsletter is not tax advice. Talk to your accountant. Do your own research.

Disclosure. From time-to-time I may add links in this newsletter to products I use. I may receive commission if you make a purchase through one of these links. Additionally, the Bankless writers hold crypto assets. See our investment disclosures here.