Morning Minute | Yuga Brings Royalties Back to Web3

TylerD's Market Summary

OpenSea is laying off 50% of its staff and Magic Eden is set to capitalize on the opportunity to enter the ETH NFT marketplace scene with Yuga. Find out more, plus catch up on all the weekend action.

🤝 Yuga and Magic Eden Announce ETH Marketplace

It was a surprise to see Magic Eden sponsoring ApeFest in Hong Kong this past week.

Now we know why - and this duo has much more up their sleeves.

On Saturday, Yuga Labs announced they are teaming up with Magic Eden to unveil an Ethereum marketplace (MP) dedicated to ensuring creator royalties.

While many had speculated a Yuga MP was coming, this was still a major surprise.

The Details

While not a ton of information is yet known, we know some basics:

• Who: Yuga and Magic Eden
• What: The first ETH NFT marketplace contractually obligated to enforce creator royalties
• When: By the end of 2023 (so soon)
• Where: On Magic Eden's existing site (an assumption from language in the announcement - this will not be a net new site)
• How: Unknown, but assumption that Limit Break's ERC-721c will be involved (or similar)

It's a major move for both parties, and one that could greatly impact the broader ecosystem if adopted.

Yuga CEO Daniel Alegre commented on the news:

"We see this partnership with Magic Eden as a win for the whole ecosystem. We appreciate everyone in the space taking steps in this direction, and invite like-minded participants to get on board."

The move is in line with Yuga's mission of "building culture on the blockchain," but now many questions have arisen.

What does this mean for existing and future Yuga NFTs?

Will the market actually accept enforced royalties? Or simply find work-arounds?

Another other open question - what does this mean for Magic Eden?

Will this launch them up the marketplace leaderboard?

Magic Eden vs. OpenSea

The timing was perfectly aligned with a bombshell announcement from OpenSea - they're laying off 50% of their employees.

That OpenSea news was released from co-founder and CEO Devin Finzer on Friday afternoon, and was somewhat buried in a longer post highlighting the upcoming "OpenSea 2.0."

OpenSea 2.0 will apparently include big product updates to site speed, quality, experience, and more - albeit with a much smaller team.

The response from the NFT market was a resounding - "wen token?"

That aside, Magic Eden clearly sees an opportunity to make a move in the ETH NFT marketplace sector with OpenSea in turmoil and Blur's Season 2 ending on Nov 20.

Why It Matters

The real question here - does it matter?

Will the Magic Eden marketplace with Yuga make a splash?

It's a hard one to answer right now, but my initial read is - no.

Traders drove royalties to 0 and it's hard to see them going back, especially as NFTs have become as financialized as ever.

While royalties have been a core part of web3's origins (more so in the digital art realm), a centralized party enforcing royalties would go against decentralization.

So this represents a pretty major crossroads. 

Also, it seems the only aspect that could atually be enforced would be the "utility" of the NFTs, and many founders may soon be faced with the harsh reality that their "utility" doesn't carry much value.

How it might work - incentives. 

This is the wild card. If Magic Eden and Yuga can incentive trading like Blur did, then they may find success. But that's a big if and it's hard to guess what that would look like.

The good news is, we will likely find out very soon...

📉 NFT Weekend Recap

It was a rocky weekend in the NFT space with a mixed bag of bullish and bearish events and outcomes.

The highlight was likely the end of ApeFest in Hong Kong, which certainly went out with a bang (in good ways and bad ways).

Starting with the good, Yuga made some major announcements:

As for the rest of the biggest headlines from the weekend:

• Trading volume continued its uptrend, coming in at $16.5M on Friday, $15.7M on Saturday marking 3 straight days over $15M - 3x levels seens just a few weeks ago
• The BAYC floor fell to 28 ETH as ApeFest wound down, down 6.5% on the week (and down ~10% from local highs over 31)
• $MEME fell to $0.02 on Sunday after a strong start Friday where it nearly reached $0.03; Captainz fell 10% to 4.1 ETH and Potatoz -14% to 1.6 ETH, now both clearly tied to the price of the token
• NFTs with upcoming known token drops soared, led by The Grapes (+170%) and Mocaverse (+12%), while BlockGames (+45%) and Yogapetz (+23%) also saw gains
• XCOPY's latest drop REMNANTS settled at a 6.75 ETH floor after seeing early sales over 8 ETH, while RarePass fell 93% to a 0.5 ETH
• The Simpsons featured NFTs in their latest TV episode, sending Punks derivative Springfield Punks from a free mint to a 0.4 ETH floor, while 3 other derivatives also saw big gains

The increased volume and run in those certain NFT sets is certainly bullish, as is the sustained demand in XCOPY's work.

The $MEME dip and broader red on the board, not as bullish.

And the fact that the space still loves to pump absolute vaporware (Simpsons derivatives) - well no comment there.

NFT Market Overview

Now for a quick look at broader price action.

Here is a quick rundown of the notable floors and their 7-day price changes:

• Fidenza: 53 ETH (-12%)
• CryptoPunks: 46.87 ETH (+3%)
• Ringers: 28.5 ETH (even)
• BAYC: 28 ETH (-6.5%)
• Gazers: 11.9 ETH (-8%)
• Grifters: 9 ETH (-7%)
• Chromie Squiggle: 8.65 ETH (even)
• Winds of Yawanawa: 6.9 ETH (even)
• MAYC: 5.23 ETH (-9%)
• Azuki: 5.13 ETH (even)
• Pudgy Penguins: 4.82 ETH (-5%)
• Captainz: 4.1 ETH (-30%)
• PROOF: 3.36 ETH (-4%)
• DeGods: 3.18 (+1%)
• Otherside Koda: 2.93 ETH (-2%)
• Milady: 2.79 ETH (+10%)

So actually a pretty red week for the existing leaders. Granted ETH was up 5% on the week, but half of these saw higher losses than 5%.

The art portion of this list seems to be ranging and/or slightly trending down.

PFPs seem to be up and down, likely driven by temporary increased in demand from Flooring Protocol and the return of some Blur farmers.

It's unclear that the $MEME liquidity has really hit the market yet - we'll see if it does this week.

👥 Friend Tech Trend Tracker

The Friend Tech market is seeing some excitement again for the first time in weeks as some rumors swirl, new features are teased and the points formula was seemingly "hacked."

Here are some of the core Friend Tech metrics for 11/5 and their day-over-day change:

• Return users: 2,833 -> 2,319 (-18%)
• Daily Buy volume: $0.57M -> $.56M (-1%) 
• Total Volume: $1.35M -> $1M (-26%)
• TVL: $42.38M -> $42.59M (+1%)
• Highest key: CBB 6.1 -> 6.2 (+2%)

*TVL in ETH terms 22,640 -> 22,405 ETH (-1%)

The metrics don't really tell the story on their face, other than TVL holding steady.

Points on Friday came in very similar to the week before, and some in the community have seemingly "hacked" the formula.

It's apparently mostly based on one's key price (market cap) and portfolio value, roughly following: Points/E = 48(Market Cap/Port Value) + 59

The impact? Folks are (anecdotally) 1)buying more self-keys to boost market cap and 2)doing more 3,3ing. We will see if the formula holds this week.

More information on the potential new feature "World Chat" was found in the codebase by user nyax.eth, allowing for a global chat, priority for those with higher key prices, and more. Racer did come out and state that this was a feature in test and not ready to be deployed - but it seems something is coming.

As for the rumors, whales are chattering about OTC deals being done at $3.50/point. That's a pretty major spike from the $1-$1.50 range touted before. If these rumors are validated (along with what may be driving them), it may be enough to drive another bull cycle.

In other SocialFI news, Jason Desimone has officially taken over Stars Arena, and the market likes it.

TVL is at $810k and climbing, up nearly 4x from local bottom and ~25% over the weekend. While it was a fairly quiet weekend, expect more news from Jason and team this week with regards to future plans.

🚚 What else is happening in NFTs?

Here is the list of other notable headlines from the weekend in NFTs:

• Trading volume fell to $10.7M on Sunday after 3 straight days over $15M; the leaderboard sees a mix of red and green
• Springfield Punks led top movers, running from a free mint to 0.4 ETH at peak (now 0.28 ETH) after The Simpsons featured NFTs on their episode last night; 3 other derivatives run as well
• CrypToadz have staged a come back rally, jumping 50% on the week to a 0.9 ETH floor (+80% from local bottom)
• Kreatorhood announced on Friday that its marketplace is live, allowing for trading of ETH and Polygon NFTs in a "a mainstream friendly blend of Blur + Friendtech, with trading, NFT creation & social-fi"
• Beeple memorialized the end of the SBF FTX trial along with his upcoming prison sentencing with his Friday night Everyday
• NFTfi passed a major milestone on Friday, seeing over $500M in lifetime NFT lending volume

🌎 Around Crypto and Web3

A few other Crypto and Web3 headlines that caught my eye:

• The crypto market was up slightly over the weekend; BTC at $35,200; ETH at $1,900; SOL -3% at $40.60
• $BLUR has rallied 80% on the month up to $0.318 ahead of its Season 2 airdrop coming in 2 weeks (Nov 20); RLB (Rollbit) is up 58% on the month at $0.23 
• Immutable's new zkEVM will power 3 new web3 games in GensoKishi Online, Cursed Stone, and Sailwars
• MetaMask Portfolio now enables seamless bridging for a broader range of tokens across supported networks with a single approval

🚀 NFT Total Volume

• BAYC (2,028 ETH, 28 ETH Floor)
• MAYC (1,027 ETH, 5.25 ETH)
• Springfield Punks (907 ETH, 0.28 ETH)
• Captainz (442 ETH, 4.1 ETH)
• Potatoz (256 ETH, 1.6 ETH)

📈 NFT Floor Price Increase

• Springfield Punks (2,800%, 0.28 ETH Floor)
• Springfield Apes (911%, 0.09 ETH)
• Keungz Genesis (65%, 6.59 ETH)
• Parallel Avatars (33%, 0.24 ETH)
• Candy Collective (30%, 0.17 ETH)

🗓 Upcoming NFT Mints and Reveals

Today is a slower day of drops after a fairly busy weekend.

The highlight is likely Jake Fried's drop "North Star" using the Transient Labs Doppelganger contract, allowing holders to update the artwork on their edition as often as they like.

The set is 100 in total supply, with the first 15 including original animation, remixed and original frames; price is 1 ETH, 2 max per person. Presale today, public tomorrow.

See the full list and dive in for more details with Swizzy's daily mint monitor. 

• Memes by 6529 (11:00 a.m. ET)
• Jake Fried - North Star (12:00 p.m. ET)
• Quadrillion x BitGod - Cultural Appropriation 2 (5:10 p.m. ET)
• Capi - Fake Pepe (6:00 p.m. ET)

Enjoy this write-up and/or want to sponsor the Morning Minute? Follow along with me on Twitter @tyler_did_it or reach out via email tyler.warner@luckytrader.com.

For all volume and floor price data, see Lucky Trader's Project Rankings page.

For all upcoming mints, see Lucky Trader's NFT Calendar page.