NFT Roundtable | How ApeCoin Impacts NFTs and More

NFT Roundtable | How ApeCoin Impacts NFTs and More
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Welcome to the Weekly NFT Roundtable, where members of the Lucky Trader team weigh in on some of the most pressing questions, news, and events in the Web3 space. This week, the team is discussing ApeCoin staking, $BLUR airdrop farming dynamics, the return of Sartoshi, and the rise of Pudgy Penguins.

The commentary below is purely opinion — not financial advice!

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ApeCoin Staking Goes Live

The long-awaited launch of ApeCoin staking went live this week. What impact (if any) do you think this will have on the broader NFT market? On the price of $APE? 

Logan: I think ApeCoin staking will produce a marginally positive impact on the NFT market, and I have absolutely no clue what happens to the price of $APE. As for NFTs, many people will earn $APE rewards and have a decision about what to do with them. Re-stake? Swap to ETH? Swap to USDC? A little of all three will likely happen, but unlocking funds (the new $APE) means more internet money to play around with and perhaps a small increase in prices and activity in the NFT market.

As for $APE, someone out there has thought through all the second-order effects, the short/long numbers, the APYs, and more…and they have a clear idea of where $APE is headed. I have not done those things, nor am I capable of piecing it all together. If you are that person, please let me know. 

Tyler: The price of $APE is likely to go down. We have seen evidence of that already in the first few days of staking rewards, as $APE has dropped ~10 percent while the rest of the crypto market is up. As for the rest of the market — I no longer think it will drive a small bull run. In fact, it might be the opposite.

The $APE rewards are being outweighed by the drop in the coin market cap, so there is no stimulus coming. We are going to need to look to other sources (cough, Blur) for a real stimulus at this point.

Jason: When you don’t know, you should say you don’t know. I don’t know. But there are a few considerations to be aware of. More than half the global NFT market revenue in 2021 was accounted for by the United States, according to research. ApeCoin staking is illegal in the United States and Canada currently. Staking also increases the overall supply of the token, which typically in a bear market, leads to sell-offs and lower prices.

The most likely outcome, in my rather uninformed opinion, is $APE down and NFTs down. At least, for the next few months as global macroeconomic conditions slowly figure themselves out.

Ghost: I think in the short-term, we see $APE trend down a bit until additional utility comes from the Otherside or other Yuga announcements. However, I do believe some of the new staking reward liquidity might trickle down into the broader market — more money, more NFT buying (a bad but often true motto). Though it will be hard to discern, given volume numbers being a bit obfuscated by $BLUR airdrop farming. 

 

Blur Volume Spikes

This weekend saw the highest NFT volume in six months, led primarily by $BLUR bidding/airdrop farming. Are platform incentives that promote inorganic market behavior a net positive or negative for the space? 

Logan: The inorganic market behavior and platform incentives do not bother me. They seem like customer acquisition costs and a justifiable, web3 marketing effort. However, I do not think it provides any benefit to the space (aside from the bot armies, who are washing and loading up on token rewards). The technological barriers in web3 and NFTs already provide plenty of traps for unsuspecting or new users, and the “inaccurate” data generated by these types of activities just adds to the list. 

Tyler: I have thought about this a lot and have changed my mind - I do think it is a net positive. While a majority of the Blur activity is likely farming, a meaningful portion of it is still real and added volume to this market. It is encouraging trading, and once money is in the system, it is more likely to stay here and rotate.

The artificial pump-and-dumps are annoying (like the weekend Azuki or Pudgy Penguin action), but the market seems to be in better shape now than it was a few weeks ago. Now the million-dollar question is — what happens when the Blur airdrops are over?

Jason: Negative. It leads to unrealistic expectations for current and new market participants. It creates unattainable demands from users. And it strengthens misinformed arguments about how the web3 space is all unsustainable scams. To Tyler’s point, what does happen when the Blur airdrops are over? Exactly what I’ve outlined: angry market participants, unreasonable platform users, and emboldened outsiders with more ammo to aim in the direction of web3.

Ghost: I don’t know that it really is either — just a short-term variable that creates atypical trader behavior. However, it does give the impression that the market is hot —  and might subsequently bring fear when things slow post-airdrop farming. One negative I see — instances like this give more ammunition to the “NFTs are all wash-trading / a scam crowd”, which is never good for mainstream sentiment.

 

Sartoshi Returns

Sartoshi, Twitter personality and creator of MFers, announced his return to the space coming New Year’s Weekend after leaving in a controversial fashion earlier this year. How are you feeling about their return, and the relevant projects (MFers, end of Sartoshi)? 

Logan: People should be allowed to come and go. Artists should be allowed to drop a bunch of stuff, take a break, and then come back. I just don’t love the ceremony that was attributed to the exit and now the return. It’s like when an athlete does a retirement tour, everyone celebrates, they get all these gifts, and then they come back — and then what? It’s a weird spot in my opinion. I do welcome back Sartoshi, because mfers are fun and they will likely produce something awesome in the future. But I’m not bullish on any of the projects currently related to them. 

Tyler: While it was a bit annoying how Sartoshi left in what appeared to be a major cash grab open edition, they were a major, mostly positive personality for the NFT space and it will be good to have them back. Plus, mfers is one of our iconic memes, and Sartoshi’s return likely helps that meme stay relevant for the near future.

Jason: Having a personality like Sartoshi in the web3 space is a net positive, but the way in which they left, as others have alluded to, was a bad look. They sold a collection based on their departure from the space, assuming there would not be a return. How well does their “last” project do if the community didn’t believe it was going to be their last? I don’t know. But not as well as it did.

Ghost: I was intrigued by the ‘end of sartoshi’ description being updated to “serve as a free claim for crypto art”. I think Sartoshi as a web3 personality was a net positive, but the nature of how they left definitely hurt the space’s perception of the account. How they handle the return (and potentially build out the art pass) will play a big factor in the sentiment around the ‘comeback’. 

 

Pudgy Penguins Continue to Climb

Pudgy Penguins reached an all-time high floor price of 5 ETH this weekend, an impressive accomplishment given the state of the market. Are you buying or selling Pudgies long-term as a potential top-tier project? 

Logan: Buying. It’s really this simple for me….Pudgy Penguins seems to be generating a cult-like following, which is required to become or remain top-tier (see also: Bored Ape Yacht Club).

Jason: I’ve got two words for ya: huddle up!

Tyler: I love what Luca Netz is doing with the Pengus, and he really has his foot on the gas right now. No founder is working harder than him at this moment. With that said, I’m a neutral hold at this time - not buying or selling. We have seen a lot of artificial price inflation with Blur farming and we are still very much in price discovery mode. It seems the smartest move is to let the dust settle a bit. Anyways, my price target is well above 5 ETH before I’ll even consider tickling that sell button.

Ghost: It’s definitely hard to ignore what new leadership and the Pudgy community has done for the project, and I see more Pengus on my Twitter timeline every day. Building a rabid community that isn’t totally motivated by price action (like BAYC in 2021) is a formula for success — and the Penguins are probably the best example of that out there right now. 

Meet the Roundtable

Ghost is an NFT analyst at Lucky Trader. He has been in crypto since 2017, and entered the NFT space via NBA Top Shot in January of 2021 before minting Bored Apes and degenning into the broader market. 

Tyler is a high-volume NFT trader, having reached the top 100 in NFT sales revenue using NFTBank’s rankings, a Pengu maxi (in Luca we trust), and a writer for Lucky Trader. Tyler’s writing spans market analysis, news breakdowns, project ecosystem overviews, and web3 opinion pieces.

Logan is a content lead at Lucky Trader and is best known for selling every good NFT far too early. He also maintains an irrational exuberance for clay-based NFTs. 

Jason is an NFT lead at Lucky Trader. He has been involved in the NFT space since CryptoKitties in late 2017, and, like most, he lost a lot of money on Top Shot in early 2021. But nevertheless, he persists (with his Series 1 Legendary From The Top LeBron James Block).

Disclaimer: The author or members of the Lucky Trader staff may own NFTs discussed in this post. Furthermore, the information contained on this website or the Lucky Trader mobile application is not intended as, and shall not be understood or construed as financial advice.
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