NFT news: BAYC breaks Ethereum, OpenSea accepts APE, NFTs are like Papyrus

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Yuga Labs had their massive land NFT sale for their Otherside MMO, which doesn’t even exist yet. The sale, on April 30, was a mess for anyone trying to buy, but a complete success for Yuga, which netted $320 million in APE. Ethereum became unusable for other projects during the sale. [Amy Castor]

Yuga Labs say they have refunded everyone for failed transactions — but those who paid ridiculous gas fees for transactions that did go through are stuck with the cost. [Tweet]

In total, Yuga spent 90.57 ETH ($265,000) on roughly 640 refunds. The largest individual refund was 2.6 ETH ($7,500). [Etherscan]

On Reddit, u/Atariconcarne has the perfect analogy: “It is like paying for your cheeseburger combo with a credit card and the guy with the paper hat at the register saying ‘Your 5 bucks transaction fee wasn’t enough. Want to try again for 10?’” [Reddit]

Ethereum doesn’t work, sure, but this is also what happens when you change plans at the last moment and upload crap to the blockchain. Yuga Labs’ smart contract had no optimizations for gas fees. [Tweet

If Yuga Labs can’t pull off a land auction without putting buyers through hell, how are they going to create an MMO? I expect Otherside to work at least as well as Axie-Infinity, which netted the DPRK $600 million. Bridges are the smart contract pinata!  

Burn it with fire!

Speaking of Axie, the Ronin hackers are laundering their funds through Tornado Cash. Nicholas Weaver argues that Tornado Cash needs to be sanctioned to prevent the DPRK from profiting from the theft. Let’s hope someone from OFAC reads his post and takes action. [Lawfare]

$450 million of WETH in users’ Ronin wallets is still unbacked. After VCs put in $150 million to stabilize the situation, we haven’t heard anything from Sky Mavis on how they are going to fix this yet. In March, they promised all users would be refunded.  

Axie-Infinity resembles a multi-level-marketing scheme. u/ale23arg on Reddit talks about how he earns income as a scholar: “im a manager in the US as well i peaked at about 22 scholars and now im holding around 12….” [Reddit]

Bored and empty

Bored & Hungry, the Bored Ape-themed burger pop-up in Long Beach, Calif., was only planning on being open for 90 days. Now, much to the horror of their neighbors, they have officially announced: “We are here to stay.” [Amy Castor, Instagram

The Chronicle’s Cesar Hernandez visited Bored & Hungry for a bite. “What’s most infuriating to me is that this restaurant model inspires the same hollow dread as some ghost kitchens. It’s a soulless attempt to capture the zeitgeist, combining pop culture with food trends.”

Whilst there, he asked one of the cashiers what he knew about NFTs: “He looked at me with a puzzled expression. ‘Not much, I just got hired to work here.'” [Chronicle]

While the pop-up opened with long lines, that’s apparently no longer the case. “I drive by this every day, and it’s almost completely empty,” Michael Narciso, who lives in the area, tweeted.

The NFT market is flatlining!

The Wall Street Journal’s Paul Vigna reports that “the NFT market is collapsing,” with daily average sales down 92% from a peak in September, according to data from NonFungible. [WSJ]

Believe me, I wish the NFT market would collapse, but it’s important to take these reports with a grain of salt — VCs are still pumping huge money into the space. They have investments to cash out on! 

To prove his point, Vigna pointed to a Snoop Dogg curated NFT that sold in April for $32,000 in ETH. It’s now up for $25.5 million ETH, and the highest current bid is for $210, he said.

This isn’t a great example, said Molly White. The original $32,000 sale was WAY higher than most resales of NFTs from this collection. Weird, but “less weird if we assume the original minter is wash trading.” [Twitter thread]

Enuff with celebs promoting NFTs

Last month, Tonight Show Host Jimmy Fallon, who also owns a Bored Ape NFT, tweeted about Moonbirds. He also changed his Twitter profile photo to a Moonbird owl — previously, it was a Bored Ape. Nobody will say if Fallon received a free Moonbird or not. [Buzzfeed]

Fallon isn’t alone. There is a long list of celebs mysteriously acquiring high-value NFTs and giving fans the (false) impression that they purchased these as an investment. A more likely scenario: they received the NFTs as gifts in exchange for promoting the projects. This is wrong and bad on many levels.

“Withholding such material information is illegal, and both the company and the influencer are on the hook for such deception,” Bonnie Patten, the executive director of consumer advocacy group Truth In Advertising, told BuzzFeed.

How are dozens of celebs acquiring Bored Ape NFTs? Are they getting them as gifts, without saying they are getting them as gifts? Because if that’s what’s happening, it’s a real sleazeball way of promoting the project. [Amy Castor]

Other stuff

Reddit co-founder Alex Ohanian, who owns a pile of APE and sits on the APE DAO foundation, compares NFTs to papyrus and the Gutenberg Bible. We only need to wait a few thousand years for NFTs to reach their full potential. The quote tweets on this are just fantastic. [Tweet]

OpenSea has started accepting APE. Why? Because the NFT marketplace is backed by a people (Coinbase, Creative Artists Agency, a16z, Ashton Kutcher) who stand to make a lot of money on APE. No surprise here. [Decrypt]

A few weeks ago, David Gerard wrote a popular story on how VCs cash out on the securities-fraud-as-a-business model. Everyone should read this — and then read it again. [David Gerard]

Apecoin shoots up 19% after Elon Musk provides a practical demonstration of how stupid NFTs are. (Hint: he changes his twitter profile pic to a collage of Bored Apes.) [CNBC] 

Asked on Reddit what the difference is between Zuck’s Metaverse and the old Second Life, u/AnimalFarmKeeper responds: “Second Life was as the name suggests an adjunct to the real lives of people. The Metaverse is largely touted as a place for those with no life.” [Reddit]

Last month, Zackxbt posted a leaked list of NFT and crypto shills. Vice reached out to the shills to learn more. Some get paid pretty well! Ashley Duncan is “earning more than she’s ever made in her life, pulling in more in two months than she used to make in an entire year by creating NFT projects, performing occasional consulting work, and pumping crypto.” [Vice]

Policy expert Elizabeth Renieris went on nonprofit ACT-IAC’s The Buzz podcast to dispel myths about Web3 for the government technology community. [The Buzz]

Coinbase opened up its NFT marketplace beta to the public, but so far, it’s hardly seeing the mad rush of users that was expected after bragging about all those early signups. [Bloomberg]

Kraken also wants to get in on the gold rush. It’s launching an NFT marketplace with zero gas fees. [Decrypt]

Me in the news 

I wrote a story for Artnet News on DAOs and the art market. Art dealers are seriously concerned about selling work to DAOs — their biggest fear is that the project will destroy the work and turn it into an NFT, so it only lives in the virtual world. [Artnet News, paywalled]

In another story for Artnet News, I spoke with several lawyers to get their feedback on a UK judge reportedly announcing that NFTs are property. Hint: Yes, NFTs are property. But there is nothing here that says if you own a token, you also own the thing the token points to. [Artnet News, paywalled]

Would you like fries with your Mutant Ape?

In Long Beach, California, there is a pop-up hamburger joint that is getting a lot of media attention because it’s got pictures of Bored Apes throughout. 

The restaurant, called “Bored & Hungry,” is operated by Andy Nguyen, who spent $267,000 (in crypto) on a Bored Ape NFT in March. He also holds two Mutant Ape NFTs, which cost him another $140,000 in ETH.

Nguyen has set out to prove that putting giant movie cutouts of slimy mutant apes inside a hamburger joint is proof that NFTs — tokens on a blockchain that point to JPEGs on a server somewhere — work in the real world. 

If you are lost on the logic here, don’t worry, you are not alone. 

Bored & Hungry is located at 2405 E. 7th Street, between Cherry and Obispo. It opened to the public on April 9, and it’s scheduled to stay open for 90 days.

Along with three cutouts of Bored Apes, a window facing a patio is painted with a gigantic Mutant Ape dripping with green slime — perfect to go with your meal. The floor is painted green, to resemble slime. Chips and burgers are served in colorful packaging with cartoon apes on them.

LA Times Food Editor Lucas Kwan Peterson describes it best:

“It feels more like a kiosk at Disneyland than a restaurant, and like some paint has been quickly slapped onto the previous Louisiana Famous Fried Chicken. A couple of movie theater-style cutouts of Mutant Apes have been trotted out onto the floor for photo opportunities.” 

The “grand opening” was complete with a ribbon-cutting, loud music, lines down the block, and a dozen “content creators” racing about, conducting interviews, and filming everything possible. You can see some of the camera action here. 

Bored & Hungry offers a simplistic In-N-Out-style menu. Yet, while a basic burger at In-N-Out costs $3.50, Bored & Hungry burgers start at $13.

The food, based on Nguyen’s existing meat and vegetarian burger concepts, doesn’t quite live up to the price tag, according to some Yelp reviewers. 

“Burned burger. Burned a hole in my pocket,” Robin W. wrote. 

Ernesto Z. described the French fries as the “frozen ones just deep-fried and topped off with salt and pepper.”

“I live near it and it’s awful,” Michael Narciso said in a tweet. The apes look terrible on the outside and burgers are triple the price of a better-tasting burger down the street.” 

Proof that NFTs (don’t) work!

The popup is intended as proof that NFTs are “more than just a JPEG.” As such, NFTs work as you might expect, meaning they didn’t work at all. 

If you own a Bored Ape, you got a free meal, but you had to present a paper ticket as proof. What about the NFT you spent hundreds of thousands of dollars on? Never mind that, you need a paper ticket. 

Bored & Hungry accepts payment in Apecoin or Ethereum, but almost nobody pays with crypto because, what a hassle, and it’s easier to use a credit card, the LA Times said. 

Cryptocurrency never functioned as money. Its value is based on speculation, people buying and selling. The same goes for NFTs. That’s it, that’s all they are good for.  

Unless that is, you are shilling your own NFT project. In that case, owning a Bored Ape token is a signal to other investors that you’re a success. You’ll be surprised to learn that Nguyen also has his own NFT project that he’s working on. It’s called Food Fighters Universe — “an NFT collection that will connect food and Web3,” according to the press release.

Search for utility 

When Yuga Labs launched Bored Ape Yacht Club in April 2021, the big deal was that holders had IP rights to their cartoon apes, meaning you could print your ape on T-shirts and hoodies and sell those on eBay. You can also put your Bored Ape on a beer can and a bag of weed. 

Bored & Hungry is proof that you can print a Bored Ape on hamburger wrappings. You still need a paper ticket or credit card to pay for the food. Nobody is talking about business expenses — I mean, you could lose money selling burgers this way. Nguyen is already $400,000 in the hole.

Bored & Hungry isn’t about selling hamburgers — it’s about promoting the Bored Apes brand to convince you that NFTs aren’t complete garbage, which they are. Like everything else behind Yuga Lab’s Bored Ape Yacht Club, it’s a publicity stunt.

Since day one, Yuga Labs has been pitching the idea that Bored Ape Yacht Club NFTs offer real-world utility. It’s a ticket to culture. It’s a ticket to a warehouse party in Brooklyn. You are part of a community. You can draw dick pictures on a virtual bathroom wall, one pixel at a time. 

If you’re amazed at the amount of hype behind Bored Ape Yacht Club, remember, the project is backed by A16z and Madonna manager Guy Oseary, who Yuga hired to represent them. Insiders are waiting to cash out on their ApeCoin once their shares are unlocked. 

I suspect we’ll be seeing lots of new ideas coming from Bored Ape Yacht Club promoters in the next year. Until investors can dump their bags on the public via Coinbase, events like this one are crucial to keeping Bored Apes in the public eye. 

Nguyen told LA Times that he is considering keeping his popup open beyond 90 days. If that’s the case, I’m curious to find out how long the lines are in June. I suspect people will tire of green slime decor and $13 hamburgers pretty quick. 

[Update: Bored & Hungry has officially announced on Instagram, “We are here to stay.”]

Update: June 24, 2022 – Bored & Hungry stops accepting $APE during the crypto crash. The LA Times writes: “Crypto skeptics have long warned that someone would get left holding the bag when the hype cycle played itself out. Better that bag should contain a burger and fries than nothing at all.” [LA Times]

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