Feb. 25, 2022: Make a Mint 😹🖼️🎨
Case Studies of Successful Tubby Cats + JPEG Cards NFT Launches
It’s been a rough week, so let’s turn off our brains and play around on the far left side of the IQ curve. It’s NFT TIME!
For me, a major takeaway of ETHDenver is that the NFT Culture is bigger than DeFi in terms of popular mindshare. I’m always going to be late to any social trend because I’m stunningly asocial (relative to everybody except the most introverted crypto anons). Just as I missed Facebook, Pinterest, Instagram, and TikTok, I was also late to acknowledge NFT Culture.
My perspective on this subject is therefore an evolution. One year ago writing here, I mostly rejected the value of NFT Culture. I acknowledged the utility of NFTs not as a culture, but as an ERC standard: useful for practical applications like ENS domains or effecting cross-asset transactions using Curve+Synthetix. It was an appreciation similar to the appreciation I have for JSON as a technical standard: it’s handy but I wouldn’t go to a JSON convention (do such things exist?).
At any rate, I’m thawing to NFT Culture. It’s real. It’s large. It’s not going away. It’s likely to push mainstream adoption of cryptocurrency before DeFi, because most people are bad with their personal money. For particularly savvy investors, this also means there’s a lot of dumb money at the table begging to be exploited. If you know how to play the game and have an appetite for risk, there’s arguably more opportunity to score a 100x on NFTs than just holding BTC. NFA…
In terms of opportunity, the NFT market cap is roughly $41B. The total DeFi market cap is about $200B. I tend to believe the market cap for DeFi will be larger than the cap for NFTs, but it’s not a strongly held belief. It could be that the NFT market may well be larger than DeFi in the way that Meta’s market cap is larger than Goldman Sachs. I don’t know. But feel free to assign it a probability to NFTs flipping DeFi, and compare with the current implied odds based on market caps, and decide for yourself if you think there’s opportunity.
I personally would guess the NFT market has significant room to run. For my sake I’m still going pin my hopes mostly around the currently distressed Curve flywheel. However, if a colleague told me they were immersing themselves into NFT Culture, I can now at least acknowledge it’s possibly a rational economic decision.
I don’t believe most people are cut out for “HODL” culture. My countrymen, the Burgers, tend to be profligate consumers who grow antsy just sitting around watching money pile up. NFTs are about the only thing to buy using cryptocurrency. Trillions of dollars in crypto wealth, if it doesn’t get converted back to fiat and won’t sit idle, doesn’t have many endpoints other than NFTs at the moment.
It helps that NFTs are denominated in ETH, so they’re somewhat immune to ETH/USD volatility. NFTs also have a speculative element, which appeals to the gamblers. Reminder therefore to stay safe!
With all things crypto, the best way to learn is not to study but to ape. Only by experiencing something tactilely can you start to understand the nuances. Hence a disclaimer that the author grabbed one of each of the NFTs mentioned below on OpenSea. No purchases were made for investment/speculative purposes, nor with any intent to ever stake or sell. Rather, simply because the projects appear interesting and I’d like to follow their development. Without a small amount of “skin in the game” they risk falling off my radar.
If you want to get started with NFTs but don’t want to pay big bucks, one easy way is to do some public good this weekend. Write a letter opposing Gensler’s mad power grab and claim a free NFT on Ethereum or Polygon for your efforts. It’s an important cause spearheaded by the LeXpunK Army of legal geniuses and PAC DAO crypto activists.
If you’re still in the “read and learn” phase of NFTs though, I’ve penned a pair of case studies below on two of the more successful NFT launches over the past week: Tubby Cats and JPEG Cards. The mechanics employed to create a successful launch are quite clever, and certainly worth studying to learn a ton about the space.
Tubby Cats
Tubby Cats will surely be remembered as one of the most successful launches of 2022.
For starters, it’s notable simply due to the ambitious size of its collection. Most of the blue chip NFT collections topped out at 10,000 items (Azuki, BAYC, mfers, 3Landers). Tubby is the first top project of this type to try a launch with 20,000. The market of NFT consumers is still remarkably small — a few thousand people are driving this whole crazed. As the market grows, we’ll presumably see larger and larger drops to satisfy growing demand.
Tubby Cats played their launch very cleverly. The first 48 hours of the mint was reserved for holders of a handful of influential NFT projects, at a fixed price of 0.1 ETH. This whitelist went a long way towards helping the most rabid NFT consumers feel like VIPs.
The team also created some rare copies for major crypto accounts. Most importantly, these influencers actually set it as their profile picture. Big social signal!
The hype was substantial. On an otherwise bearish day, crypto social feeds turned to major accounts showing off their adorable cat pictures. A whopping 14K of the 20K supply was already minted within the first 48 hour whitelist period. Users not on the whitelist had major FOMO in anticipation of scoring their own when the public mint period opened.
Even under normal circumstances, the FOMO was enough to ensure the public mint would sell out quickly. Yet in this case, it sold out in 8 minutes! Normies didn’t even get a chance. Gas prices were through the roof.
As it turns out, a clever degen thought ahead. With a 0.1 ETH mint price, and a floor price of about 0.5 ETH at the time, there was massive arbitrage opportunity. A quick flip for 0.4 profit. However, the mint function had a limit of 5 mints per transaction, so very limited upside.
However, with just a minimum of coding knowledge, you could loop this several hundred times and complete a large mint within a single block. The degen would end up exploiting this to mint 950 mints at one time and spend hundreds of thousands of gas to force the transaction through quickly.
However it happened, the Tubbies are all sold out, now only available on OpenSea for a multiple of the mint price. Free money for the most avid NFT collectors, and the degen who farmed the open mint period can drip these on the market at whatever rate they like. Just like Alameda once farmed and dumped $CVX, so too is somebody harvesting TubbyCats!
It was an ambitious project, but the talented team executed with flawless precision. The artwork was gorgeous, and the tools they built to ensure a high level of quality control on 20,000 kitties was an impressive technical achievement in itself.
It’s a well-earned success for the TubbyCats team, who are generously donating their proceeds back to the community as thanks.
In closing, it’s a a good project and strong team in a predictable and transparent roadmap, planned and projected, I think in the near future we will see an unprecedented growth of this project.
This next case study is too interesting, so we have to restrict it to paid subscribers only…
JPEG Cards
