So what’s happening this week?

The marketplace wars continue to rage, and Yuga Labs, DeGods and Iron Paw Gang (IPG) all made major moves.

TLDR

• Cryptopunks, BAYC/MAYC, Azuki/Beanz, Pudgy Penguins favoured by expert traders.
• Moonbirds, CloneX, Doodles experience drops in floor prices (i.e., the lowest “buy now” levels) due to poor execution.
• The Otherside and DeGods/y00ts collections look like solid short-term investments now.
• Market sentiment has been subdued, with 60%-70% of NFT volume due to Blur token incentives alone.
• OpenSea announced the launch of their 0% fee NFT aggregator: OpenSea Pro.
• Artblocks launches a new secondary marketplace to support creator royalties.
• Yuga Labs announces a new collection, "Legends of the Mara."
• DeGods and y00ts migrate to the Ethereum ecosystem; investors signal approval.
• IPG to provide 500% returns for minters.
• Share this digest with family and friends!

Disclaimer: Not financial nor investment advice. Any capital-related decisions you make are your responsibility and yours only.

Market overview

Here are the Top 12 NFT collections by 7-day trading volume:

Currently the top ecosystems are Yuga Labs (Cryptopunks, BAYC, MAYC, BAKC, Otherside, Meebits), Chiru Labs (Azuki, Beanz Official), Pudgy Penguins and DeGods (y00ts is their secondary collection).

Cryptopunks are one of the earliest NFT collections on the Ethereum blockchain, created by the respected Larva Labs team.  As such they are seen as a safe haven for long term investors due to their historical relevance. The project has no roadmap and is collected purely for the art meaning there is minimal execution risk.

Expert traders are also collecting BAYC/MAYC, Azuki/Beanz and Pudgy Penguins. These collections are over a year old and have been able to survive many ups and downs, showing the strength of their respective communities. All 3 teams have shared clear visions for the future and traders have faith they will continue executing successfully. 

The Moonbirds, CloneX and Doodles collections have seen significant drops in floor price. Poor execution of their business plans have caused holders to sell in droves. All three teams are very well funded but it remains to be seen if they can regain trust and momentum.

For short-term investments The Otherside and DeGods/y00ts collections can provide major gains for savvy traders. More details on this below.

General market sentiment

Since the start of the year, Opensea and Blur have been duking it out for market share. These are the two most significant marketplaces for NFT trading. To incentivise people to use their platform, Blur decided to:

1. Undercut creator royalties
2. Promise a token airdrop reward for the most active users

With creator royalties no longer mandatory on Blur, traders could purchase the same NFT at a lower price. However, this caused major issues for creators who relied on royalties to deliver their roadmaps and provide benefits to holders.

On February 14th Blur rewarded users with a season 1 airdrop that proved to be highly profitable for traders. Profits ranged from a few thousand to over $2 million for the biggest trader (Machi Big Brother).

60% to 70% of NFT volume is artificial at the moment, due to users trying to earn tokens for the upcoming season 2 Blur airdrop. Collections outside of the top 20 have minimal trading volume and liquidity. We do not advise investing in these projects for short-term gains due to lack of liquidity.

Marketplace news

Blur extends farming rewards

Season 2 farming incentives began on February 15th and were due to end on April 1st. Two weeks ago, Blur announced delays to their new product offering. To compensate, season 2 farming incentives would remain until May 1st.

The news caused consternation as Blur sentiment continues to sour. General collectors blame Blur for the current volatility in the NFT market and the lack of appreciation for unique traits in NFT collections. This results in over 80% of major collections trading at floor price regardless of the rarity of the NFT.

Expect NFT trading volatility to continue as whales accumulate Blur points. Traders sweep the top NFT collections to pump the price, causing new buyers to FOMO. Once they enter the market and place bids at higher prices, whales sell their holdings. This causes the price to dive. 

Machi Big Brother is the biggest farmer on the platform, but has been caught on the wrong side of these trades on a few occasions. He is currently down 4,600 $ETH since season 2 began.

Artblocks launches new secondary marketplace

Artblocks announced their new marketplace, in an aim to support creator royalties in the face of Blur’s recent moves.

🧵 Hey y’all. In response to diminishing enforcement of creator royalties, we launched our own secondary market… It’s a big deal, and you can try it out on our newest Curated release, Cargo: https://t.co/jwglS7CWvr. Let’s get started and find out why this matters so much 👇

— Art Blocks (@artblocks_io) March 29, 2023

There is talk of increasing trading volume through positive incentives. These include access to future mints, airdrops, events and prints. We’ll wait to see what impact this will have on the marketplace wars, and we’ll update you in future NFT digests.

OpenSea launches "OpenSea Pro"

This new product is OpenSea's answer to Blur's rise and market share dominance.

This time last year, OpenSea acquired an NFT marketplace aggregator called "Gem". They've rebranded the newest version of this platform to "OpenSea Pro" targeting professional traders and "hopefully" Blur's users. By providing 0% marketplace fees, advanced tools such as "Floor Sweeping" and aggregating the best deals from 150+ marketplaces, OpenSea is hoping to regain the market share it lost to Blur in recent months. To give you some perspective, OpenSea commanded a 94% dominance in January 2022, today that dominance sits at a mere 22.4% with 70% belonging to Blur.

Do we think this will be sufficient? We doubt it. OpenSea's real chance at regaining market share will be a token airdrop and incentives program.

Important NFT updates

Yuga Labs announces new collection

Yuga Labs introduced “Legends of the Mara,” a 2D gaming experience linked to Yuga’s popular Otherside with its own companion collection.

Introducing Legends of the Mara, a 2D experience with its own companion collection. Claim your Vessel, discover its potential, and forge your path.

Otherdeeds with a Koda will be able to decouple in advance of the game launch.

Step into https://t.co/PL6spHFERp and the 🧵 below pic.twitter.com/inu3s4sVdq

— Othersidemeta (@OthersideMeta) March 27, 2023

There are several factors to highlight for prospective NFT traders:

1. All eyes will be on the Kodas/Otherside collections during Legends of the Mara. NFTs are social instruments and where attention goes, value accrues.
2. Otherside holders can now claim their free NFT (“the vessel”). This will hatch into a Mara with the ability to evolve into a Kodamara in the future. Information on the utility of the Mara and Kodamara NFTs is sparse at the moment but we do know they will be playable NFT characters in Legends of Mara and the full Otherside game. 
3. Holders of Yuga Labs assets are the richest and most influential in the NFT space. We foresee high trading volumes and opportunities to pick up bargains as they look to invest in the newly announced assets.
4. Kodas will become a standalone 10K-strong NFT collection. Expect volatility and price appreciation, as the collection is now easier to trade. Many holders will be unaware of the value of certain Koda traits. Traders can capitalise on mispriced listings.
5. $APE is the currency for the new game. Token price should increase during the gaming period as players spend $Ape to obtain in-game benefits.

DeGods and y00ts enter the Ethereum ecosystem

DeGods recently soared to 9 ETH (790 SOL) ahead of their migration to Ethereum beginning April 1st. This follows a similar pattern to y00ts (the secondary collection), which moved to the Polygon network on March 30th achieving an all-time high level of 2 $ETH.

Here is what we know about the migration so far:

• Those who migrate in the first 24 hours will have gas fees covered.
• Day 1 migrators are automatically entered into the BTC DeGod raffle, with the winner claiming a BTC DeGod NFT currently worth 1 $BTC.
• $ETH royalties reduced to 0.33% on all marketplaces
• The default migration may take a few hours, but holders can elect to speed it up (though they will have to cover gas).
• Blur is the official DeGods trading partner.

Incentives mirror y00ts, which achieved a commendable 85% migration rate on day 1. We should expect something similar with DeGods.

Market sentiment is bullish with the move to Ethereum expected to provide easier access for $ETH whales, spurring plenty of momentum.

Also, DeGods founder Frank DeGods embarked on an $ETH NFT shopping spree worth over $500k.

This has endeared him to the NFT community and garnered even more attention for DeGods. We predict the increased attention will lead to a higher trading volume initially, and a price pump. 

The Nakamigos case study

The NFT space moves quickly and can provide life changing gains. This is the story of a free mint that rose to 0.5 $ETH ($950) in 12 days.

On March 22 End of Sartoshi holders received a free NFT mint called Nakamigos. The team then created honoraries (bespoke NFTs in their likeness) of popular Twitter personalities. This created a major buzz online.

The following day they kept the momentum going with a cheap public mint, ending at 0.01 $ETH ($18) for ten. This allowed Nakamigos to garner piles of attention in the NFT world. 

Coupled with other positive and well-considered elements, such as quality pixel art that’s profile pic (PFP)-worthy and meme-able, a wide variety, and inclusion in a fun community, FOMO grew and the prices began to climb.

Catalysts

The price initially hit 0.2 $ETH before retracing, which was very impressive for a 20K project. Then a rumour began that Larva Labs (Creators of Cryptopunks) was behind the collection. Whales bought hundreds of Nakamigos and once again promoted their buys on Twitter. This caused the price to hit a new all time high of 0.5 $ETH allowing early holders to sell for six-figure profits. 

IPG mint shapes up to kick off April with a bang

THE IRON ERA IS HERE April 3rd, 5pm EST .15 ETH pic.twitter.com/QhBQELl4gj

— Iron Paw Gang (@IronPawGang) March 23, 2023

Congratulations to those who have been placed on the allowlist (individuals eligible to mint), as this is shaping up to be one of the most hyped mints in Q2.

IPG has low supply (4,000 NFTs), high visibility and positive social media sentiment. We could see 500% to 1,000% (!) gains for minters. Also, savvy traders that research trait and rarity rankings will be able to snipe bargains on the secondary market.

Cryptonary’s take

Here are our takeaways from another eventful week in the NFT space:

Opensea continues to fall behind in the marketplace wars. From their history we anticipated a reaction from their team, whether that results in a new product offering or increased incentives for current users in a bid to win back market share. They've started off by launching OpenSea Pro but this is unlikely to gain them the marketshare they lost.

We suspect Blur’s token emission schedule will result in a drop in the token value long term unless the team adds utility. Airdrop farmers who receive the season 2 airdrop will be looking to sell on the open market to recoup losses unless more use cases for $BLUR are announced. At the moment the token is used purely for governance purposes and is trading at $0.54.  

In a fast moving space NFT buyers have short attention spans and are constantly on the lookout for the next opportunity. Due to new entrants we predict Nakamigos to drop in price with NFT buyers shifting focus.

Yuga Labs (Otherside), DeGods and Iron Paw Gang are the three projects to watch due to upcoming events. Expect major gains as they monopolise the attention of the NFT space.

The safest way to ensure short term gains remains the mint and sell strategy. Gaining allowlists and whitelists is fiercely competitive with individuals trying to find upcoming projects as early as possible.   

As always, thank you for reading.