“You’re really early if you notice this,” hinted the Kapetta Twitter account, a new “anime-inspired” NFT endeavour. The phrase has become a cliche in the frothy market for non-fungible tokens, where blockchain-based proof of ownership has spawned a hyper-speculative digital art market. Within hours, Kapetta had tens of thousands of new followers eager to get in on the ground floor, based on nothing but a sleek silhouette and a guarantee.
It can be quite profitable to be “early” in the uncontrolled realm of NFTs. Before the token is on sale to the wider public, early backers of a new project are frequently rewarded with “whitelist” access. Whitelisting can mean spending a few hundred dollars for an NFT that can be resold for thousands of dollars within hours if there is enough buzz.
However, due diligence possibilities are limited in the increasingly desperate search for the next Bored Ape Yacht Club — the legendary NFT series whose cartoonish pieces frequently sell for millions of dollars. The usage of pseudonyms by many NFT authors makes it difficult to authenticate their credentials.
Roberto Nickson, the man behind Kapetta, swiftly disclosed that his Twitter account was a hoax, created to caution people against jumping too fast after a rash of cash grabs and rip-offs (known as “rug pulls” in NFT lingo). Nickson, who tweets NFT news as @themetav3rse, asked, “Why are we normalising handing anonymous internet people money?” “Right now, there’s a lot of garbage in this space.”
In the midst of all the hullabaloo, it’s easy to overlook how “early” NFTs are. It’s been less than a year since the first Bored Ape works were released, and it’s only been six months since NFT sales skyrocketed last summer.
Despite this, Yuga Labs, the business behind Bored Ape, is now raising money at a multibillion-dollar valuation. Twitter, Instagram, and YouTube have all jumped on board with the NFT. Last month, the largest NFT marketplace, OpenSea, was valued at more than $13 billion. The “Crypto Bowl” was called last weekend’s Super Bowl when trading platforms like Coinbase and FTX bought commercials during the most costly airtime on American television.
These staggering proportions, combined with celebrity endorsements and the seeming ease with which thousands of dollars can be won or lost by trading NFTs, have given crypto art a public visibility far greater than its true scale.
According to market tracker Cryptoslam.io, more than $24 billion in NFTs have been traded so far, with more than $4 billion in January alone. According to Dune.xyz, another blockchain statistics site, OpenSea exchanged at least $100 million in ethereum (the most popularly utilised cryptocurrency to buy NFTs) every day last month.
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