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Rocks and Bored Apes; AlphaBettys and Prison Raccoons; and Our Own #Sketches2021

Welcome to the wonderful world of NFTs. The alternate title for this post is “NFTs are crazy, right?”

As we have discussions with people in and around the cryptocurrency universe, we feel we’re almost always needing to provide evidence of our own bona fides. Typical conversations:

“Oh, you got $4,000 from Uniswap? Well, have you ever made $150,000 off of airdrops?”

“I bought my first Bitcoin at $20!”

“Gee, you shouldn’t have sold your $ETH; I met Vitalik once and he’s the real deal.”

These discussions remind me of the typical indie-rock tropes, like “well, I saw Arcade Fire when I was a student at McGill,” or “I saw Fishbone at the Lost Horizon in Syracuse in 1991.” (The second one is true for me; for the record, though, none of the crypto ones are my own story.)

The subsets of crypto have developed their own parlance, and the early adopters are known by the lingua franca of “yield farming” and “LPs” (for DeFi) and, for today’s it girl, NFTs, things like “1:1” or the “Floor” or “Up Only.” (To say nothing of the overriding crypto lingo that is, simply, the word “Few.” As in: “Few understand.” As in: “check out this LP from the band Morphine, they’ll be bigger than Pearl Jam. Few.”)

Enter the Rocks and the Bored Apes.

Item: someone paid a lot of money for a picture of a rock. These rocks (all of which can be found here: Ether Rocks ) would be “selling like hotcakes” if there were tons of them but there are only…wait, you’re telling me there are 100 of these? Hold on one second, someone paid $2m for a JPG of a rock?

A couple things should be noted here: one is that this is a limited supply JPG — only 100 total here, which is REALLY limited — and it’s also what’s called a “1:1,” or “1 of 1.”

Other projects have decided to make their artwork limited but not limited to only one piece. Like this collection, from a startup called DADA, which has five or ten of each piece of artwork.

Well, it appears we missed the boat on the rocks. Maybe there’s another project we’re not too late on…ah, I see here there’s something called the Bored Ape Yacht Club and we might be able to get one of these beautiful Bored Apes?

Oh, you have to call Sotheby’s?

Good thing we got in on THIS one early…oh…wait…we missed it.

N.B. these are limited to 10,000 different 1:1s. So it’s possible a lot of people are sitting on a lot of money today; it’s also possible that you aren’t one of those people.

What to do, what to do…

Not Too Late For THESE NFTs, Are We?

Still time to jump into the pool with both feet. Right? Here we go…AlphaBettys!

One of these didn’t cost us too much — 0.19 ETH for this one, number 7888 in the collection — and there’s a chance that the market will heat up. Or maybe it won’t, and we’re holding onto an asset class that’s going to be like our POW Tokens. Time will tell.

Other projects we’ve dived in on include something called Space Shibes (DISCLOSURE: we were part of the early group of investors in this project) and Shael Onions and some sort of panda/raccoon prison/pool party mashup. (See below.)

If You Can’t Make Sense Of It All…

Neither can we. So we launched another project of our own.

The Official Logo

The first couple projects were lower-price experiments with NFTs. We began our journey with the Obvious Statement Collection. Next was the “One Hundred NFTs.” Both were more graphic design projects than art projects.

And the above projects are best described as NFT Avatars: if you get a Crypto Punk, your goal is to use that punk as your PFP (profile photo). (In case you’re wondering, we missed the boat on that one, too.)

Actual NFT artwork, like DADA or the work of someone like Meg Thorpe, is the same animal but a little (or a lot) different.

Our goal with our own project, “Sketches2021,” was to create one-of-a-kind pieces; modern, simple sketches with bright colors. We’d also make it a limited number (we settled on 256 thanks a little to a suggestion from our friend Von who calls himself “Lazy Crypto Guy” on Twitter) and we’d go for a floor of 1 ETH.

We’ve released the first 100 pieces and they’re all on OpenSea as we speak. The entire set is complete — we worked on them during Summer 2021 — and the rest will be launched in short order. Perhaps with a giveaway or two, stay tuned. (For now, we started with the first dozen on the web page here: Sketches2021 on Metacoin.

What’s The Point?

We’ve been asking that question about a lot of what’s in the crypto universe since it launched. Will Bitcoin really disintermediate the banks? Will Ethereum really have a layer that allows for transactions and tokens everywhere? Will these DeFi lending platforms do anything? Will these digital avatar JPEG thingies make me rich?

Time will tell, folks. Time will tell.

Time For Our Own NFT Collection

As we’ve been telling you from the get-go, this site is mostly an experiment. How much of this cryptocurrency stuff is for real? (Turns out…a lot of it.) Does Bitcoin have staying power? (I think the answer to that one is yes.) Should we invest in that “crap”coin? (In most cases, no. In some cases, maybe.)

One Hundred NFTs

So we’re experimenting, again, and this time it’s with NFTs. We’ve bought a few — we’re not “OGs” but we did pick up some two years ago — and sold a couple along the way. No riches gained. But lessons learned.

Our first experiment started a couple months back; we called it the “Obvious Statement Collection” and we enjoyed that; but it’s not the reason for this post. Today, we have a fully baked collection and we’re ready to rock and roll with it.

Behold #OneHundredNFTs

The mission was simple: create 100 pieces of artwork, each different, and each numbered from 1 to 100. No more will be created in this collection of artwork; each item will only have one minted.

The entire collection is linked to here: One Hundred NFTs.

When we soft-launched the collection a month ago, we decided to follow a formula that goes like this (with some exceptions we’ll note):

  • Items 90-100: 0.025 ETH
  • Items 80-89: 0.05 ETH
  • Items 70-79: 0.075 ETH
  • Items 60-69: 0.1 ETH
  • Items 50-59: 0.125 ETH
  • Items 40-49: 0.15 ETH
  • Items 30-39: 0.175 ETH
  • Items 20-29: 0.2 ETH
  • Items 11-19: 0.225 ETH
  • Items 1-10: Auction, with minimum sale price of 1 ETH.

The exceptions:

  • Every fifth item, starting with the 15th, is auctioned (minimum 1 ETH).
  • Every ninth item, starting with the 18th, is to be given away (save for 99, kept by the founding team).
  • Numbers 13, 42, 43, 52, 66, 77, 85-88, 91, and 99 are reserved for “Friends, Family, and Fools.” (We’ve given a couple of those away already.)
  • There’s a TEST item; we’re not sure what to do with that one yet.
  • AND we semi-deliberately lowered the price of a couple of them.

It’s Early, So…We Don’t Know Yet

We’re honestly not all that sure what happens next: we’ll continue, as they say, to test and learn. That means an ad campaign, some more Twitter posts, perhaps some Facebook marketing.

But we like how they look and would love to get your feedback.

Anatomy of a Rug Pull

We saw this one coming a mile away: Apy.center was what is known as a “rug pull.” Investors saw the rug pulled out from under them, and, unless you were one of the early ones, your money is pretty much gone.

So…what happened?

I don’t think “.pull” is a TLD extension…

Step One: The Recruitment

It launched sometime early in the morning Friday, October 2, as a yield farm on steroids. In the interest of public service — we should note that we’ve done a few experiments like this during our three years blogging here — we decided to gamble what amounted to a family fast food meal on the Uniswap Pool behind $CAPY. We were also investing in a platform that was roughly 12 hours old.

We were 12 hours too late.

Here was the interest rate promised when we got in:

Not sustainable.

And here was the interest rate just two hours later:

Still not sustainable.

Step Two: The Contract’s 72-Hour Rule (i.e. The Setup)

This is where everyone who was recruited into this fast-growing pool saw stars in their eyes: your money is locked for 72 hours. You can’t get any of the gains out til then, so you have no choice but to watch and wait and hope and pray that the rug won’t get pulled out from under you.

New money was indeed flowing in, to the tune of a half-million TVL (total value locked) by Saturday morning (36 hours after launch).

Yeah, it’s a scam.

One of the fastest-growing Telegram channels we’ve ever seen served as an additional recruitment tool, with more money flowing in and, at around the same time of the above snapshot, interest rates promised that were still huge.

Rug Pull Imminent…

The clock/time bomb was ticking, but Sunday still saw huge POTENTIAL returns:

5pm, Central Time (US), APY

With the first investors just a few hours away from being able to take their investments out, it was just a matter of time. Here’s a TVL snapshot from Sunday evening, US Central Time:

It’s coming…

And here’s this morning’s post-rug-pull TVL snapshot (we slept in til 6:15, since we were powerless to stop any movement; our funds were locked so the only potential gains, all on paper, weren’t real):

That’s a big drop, eh?

AND, just moments ago, 9:25 a.m. Central Time in the US:

It keeps on dropping…

What Have We Learned?

Chasing quick returns? That’s human nature. Looking at nutty interest rates that seem impossible, you may have succumbed to the masses: “I want some of that.”

The creators of this mystery coin set it up in such a way that, while the code appeared to be air-tight, there was no possible way to make any money unless you were one of the first users. No one in their right mind was going to hold onto their gains for any longer than they had to, and the new money that went in was obviously going to pay the old money that was in first. The first few investors — who were likely also the creators of this coin — played psychology, word-of-mouth marketing, and the lure of insane, out-of-this-world returns to get new investors on board fast enough to ensure that maybe the first 5 investors were getting mass profits.

It’s a classic Ponzi scheme.

Again, DYOR, and Don’t Be Surprised if You Get #REKT.

Be careful out there, folks.

Why a V-shaped Economic Recovery Is Folly

“In these Uncertain Times” is the phrase that sets my 18-year-old daughter off in fits of eye-rolling. They aren’t fits of rage — as, let’s be honest, when you’re 18 and a college Freshman, your rage is aimed at other things — but genuine reenactments of the Michael Jordan “Stop it” meme.

Everyone has gotten into the “In these Uncertain Times” act. Jan from Toyota — appearing in ads festooned as Jan from Toyota, but, of course, from what might be her home office — tells us that Toyota is there for us. Because auto makers and car dealers are the first thing we think of when we enter a global pandemic.

Jan from Toyota is joined In These Uncertain Times by a newly branded “The More You Know” series from the networks of NBCUniversal. Hey, we don’t know what we’re getting into either, but you should know that we’re here for you. In these Uncertain Times.

In any event, the eye-rolling is warranted. It’s not a specific “stop the spread” or “flatten the curve” catchphrase; those ask for a little bit of explanation about why they are important platitudes. How, exactly, do we “stop the spread?” What, exactly, is this “curve” that we must, together, “flatten?”

We want our mantras to be non-specific and our buzz phrases to be amorphous. “In these Uncertain Times” works. Because nobody knows what the hell will happen next. Thus the eye-rolling.

An Uncertain Recovery

If you’re new to this site, we mostly cover cryptocurrencies like Bitcoin and how and if they’re weaving their way into modern life. But, as we’ve discussed in the past…well…In these Uncertain Times, Bitcoin doesn’t have a decades-old history to point to. There are no parallels to the Great Ethereum Bounce of 1976, or the Binance Bottom of 2003.

Which brings us to the overall topic of this article — whether or not anyone knows what in Sam Hill will happen to the economy when and if there’s a magic switch that gets flipped and everyone goes back to work.

May I Interest You in Another Unemployment Chart?

Those six data points above need no explanation. To say they suck is putting it mildly; the wind came out of the economic sails on March 11, and we are not going back any time soon.

The “V-shaped recovery” crowd doesn’t necessarily think there will be an immediate switch-flipping exercise, but they do think that the “Trough of Suck” will be rather short-lived. (More on the Trough of Suck below.)

An overly simplified version of what the V-shaped folks think will happen is here:

Quick bounce back to decent mood?

The assumptions within a V-shaped recovery are too numerous — like dropping a quarter from space and trying to hit a shot glass in a field in Texas — but here’s a quick synopsis of how that could work:

  • A “back-to-work” order arrives from the Federal government and is adopted over the course of a few weeks by at least a vast majority of the states.
  • COVID-19 cases have reached their peak, and we have flattened the curve.
  • Restaurants open back up with a social distancing guideline of some sort.
  • You can get your hair cut and your nails done and get a facial — provided that the provider of these services has been cleared by a doctor to provide these services, and provided that a mask is worn.
  • Your kids go back to some semblance of in-person school.
  • You can host a dinner party at your home with more than just your immediate family.
  • No one in your immediate family is sick.
  • You have contact tracing in place so that you can prove that this morning’s trip to the pharmacy did not expose you to the virus.
  • You have an employer that is willing to bring you back to work, hasn’t laid you off, hasn’t gone out of business, and has received a Paycheck Protection Program loan from the SBA.

Actual Recovery Looks Much Different

What we’re actually going to see…

If you take a look at the blue line up there, it’s sorta kinda meandering downward, and then comes up a little bit — THE NEW NORMAL — and then we all figure out how to manage. Which is much more likely.

Trough of Disillusionment Vs. Trough of Suck

Gartner has a concept called “Trough of Disillusionment.” I’ll let you Google that — type in “Hype Cycle” and learn more about how analysts think about the launch of tech products — but I’ve decided to apply that thinking to something I’m calling the “Trough of Suck.”

In short, the V-shaped crowd may say “it’s going to suck for a little while” and then they think that the switch magically flips and we’re back to where we were before.

There’s also a “U-shaped Recovery” crowd, and they think there will be a bit of an extended period of pain and then gradually things come back.

But neither of these buts “The New Normal” up against the stark realities of that unemployment chart above and gets a real, actual, “Trough of Suck.”

Expect this to last a long time…

What we’ve done over the past six weeks is unprecedented — and, dare we dip our toes into the “do you want to save your Grandma or do you want to go back to work?” argument, we’re about to enter into a Trough of Suck phase that will last for YEARS.

Take a look at this jobless claims article from Yahoo: we’ve sent 22 million people into the unemployment lines. How many of those will be able to go straight back to work?

What’s Next?

Allow me, your fearless prognosticator, to hazard a few guesses about what’s next as it pertains to you and your own microeconomy.

1. Since it’s NOT an either-or, people HAVE to go to work.

Though this danse macabre will continue, the list of essential services will expand. Because it has to — yesterday’s Michigand Yeet Fest was evidence that the Governor has overstepped her bounds by at least an order of magnitude and the seeds of discontent were long-since sown.

2. But some of you — some of us — will be stuck.

I was deemed non-essential ages ago and Lord knows I’m going to be doing a metric crapton of soul-searching about what I get to do next. (I can write about Bitcoin until the cows come home; eventually, I may have to learn how to milk said cows. Writers are non-essential — this runs counter to what the talking heads will tell you about how important the arts are In These Uncertain Times — but if I write content and that content doesn’t actually move the needle they’ve been talking about for years (in no small part because you can’t move any needles if those needles are tied to dollars an no one has either needles OR dollars), I’m going to have to find actual gainful employ.)

3. Plan for a long haul — without any idea how long that haul will be.

We’re not just trying to put the toothpaste back in the tube; we’ve asked everyone to brush and spit out and don’t swallow the toothpaste AND we’re trying to put that back in the tube.

Price of Bitcoin? Price of gold? Price of eggs, value of dollars in RMB, cost of goods sold…your guess is as good as mine as to what will happen to ANY of those things.

It’s Not a Binary Question

I’ve dumped a lot at you in this article; thanks for reading so far. If I’ve got an ask, it’s that we stop looking at this as a binary question.

The President was actually right when he talked about the human cost of shutting down the economy. Lives will be lost to the virus — but will more lives be lost to those “deaths of dispair” that people really don’t want to talk about?

The President likes to give the impression that he has a magic on/off switch for the economy; Congress likes to think that its Herculean efforts to get the CARES Act signed into law supplied the direct current for that on/off switch.

The reality — with the “will the recovery be ‘V-shaped'” and the “when can I go back to work?” and the “is it safe enough to be out in public?” crowds — is that these arguments are much more nuanced. The give-and-take that’s playing out in public is not as simple as “go back to work and Grandma dies.”

Stop playing that game. Please.

And pray for a shorter duration of the Trough of Suck.