NFT Survival Thinking: Where is Azuki after the trust is broken?

Author: Solaire, YBB Capital

Introduction

The recent downturn in the NFT market is having a profound impact on long-term investors. Waves of sell-offs appear to be sweeping through the market, and the continued downturn in the NFT market has had a negative impact on sentiment among long-term holders, with many dumping quality collectibles. Approximately 4.63% of all Azuki collections held by diamond holders have been sold in recent weeks, accounting for nearly 1.88% of the total Azuki NFTs on the market. Demand also fell at the Bored Ape Yacht Club (BAYC), with nearly 2% of assets sold off by diamond hands. The NFT market has been going through a difficult phase since its peak in March of this year, with daily sales and the number of unique buyers falling sharply (data from Cointime). There are endless voices about the fact that the PFP narrative has come to an end. This article will look back at the history of Azuki to think about the factors of Azuki's past success and the problems that PFP should solve at this stage.

NFT, a new way of connection

The concept of NFT (Non-Fungible Tokens) can be traced back to 2012, when an asset called Colored Coins appeared on the Bitcoin blockchain. These colored coins can represent anything non-monetary such as stocks, bonds, collectibles.

However, the real NFT technology was developed on the Ethereum blockchain. In 2015, the Ethereum blockchain was released, and its smart contract functionality allows developers to create their own tokens, including non-fungible tokens. In 2017, the CryptoPunks project was released. This is an Ethereum-based, tradable picture. Each picture is unique. This can be regarded as the early form of NFT, and it is also the first Profile Picture (PFP) type. project.

The so-called PFP usually refers to avatar-like NFT projects, and its main features can be summarized into six points.

1. Uniqueness: Each token of the PFP project is unique. This is due to the fact that they are all NFTs, that is, each token has its own metadata and ownership records and cannot be interchanged with other tokens;
2. Artistry: Most PFP projects are works of art. Each token represents a unique, digital avatar or character with consistent art style but different characteristics;
3. Community Driven: PFP projects often revolve around an active community. Those who hold these PFPs are not only investors, they are also members of the community, participating in various activities such as online discussions and offline meetups;
4. Representative identity: In many PFP projects, people who hold NFT will use them as representative images on the network, thus showing their digital identity and the community they belong to;
5. Economic Value: Since each PFP is unique and limited in quantity, they are likely to be sold at high prices in the market. This confers a potential economic benefit on the holder;
6. Interactivity and scalability: Some PFP projects may include game elements, enabling tokens to be used in other applications or platforms. This increases the interactivity and extensibility of PFP.

Looking at the characteristics of PFP from a cultural and social point of view has established a new connection method. Chen Long, Executive Dean of the School of Communication, Soochow University, and Jing Yulun, Research Assistant, wrote a paper "** NFT Digital Collections as Subcultural Capital and Its Practical Significance of Communication"** puts forward** that **NFT, as a kind of subcultural capital, is dominating the network subcultural production and communication actions of young people. With fun as the basic currency, NFT builds a circle full of fluid and all-encompassing network subcultures, and divisions occur between different circles, generations, and other community members within society. The communication practice around NFT digital collections also has new meanings.

**Its meaning is divided into three points, identity, integration and connection. **

• Break the identity of circles: NFT breaks the isolation of various social circles. Individuals can represent different identities by changing the NFT they wear, and these identities can span different communities and social media. Individuals can freely flow between different circles and show their digital identities;
• Fusion of value and culture: People pay attention to both the artistic value of NFT (for example, as an investment or collection) and its cultural significance (for example, as an artistic expression or spiritual communication). This makes the boundary between value and culture blurred. In the NFT based on digital media and the Internet of Everything, the boundary between value and culture disappears, and the two generate an inter-embedded model and blend together;
• Weakly connected communities: People connect because of common interests or interests, even though they may not have any intersection in real life. These relatively weak relationships form a vast network that allows the exchange of information and resources. In other words, people may connect with other people around the world by buying, exchanging or discussing NFT. These connections may be weak in themselves, but together they form a strong social network. The connection of weak ties is stimulated unprecedentedly. Groups of different identities complete the gathering and upgrading of their relationships in the cultural resonance brought by NFT, and finally gather into a network society (community) with weak ties as the core.

This article will also review the success and collapse of Azuki based on the three meanings of identity, connection, and integration around the NFT culture and social perspective.

Azuki, the magic of fusion

Ready to take the red bean? - Azuki tweet before birth

Azuki went on sale on January 2, 2022. Azuki has been smooth sailing since its birth, and quickly became one of the Big Three with the same reputation as CryptoPunks and BAYC. It is different from the historical significance of CryptoPunks and BAYC's deep understanding of the Western market. Azuki's success lies in its ingenious fusion of artistic value and culture. As an NFT with a strong Japanese style, its success lies not only in its artistic value (recognition of its benefits and painting standards), but also in its realization of the integration of East and West. A successful fusion of cultures. From the details of the painting, Azuki adopts the style of Japanese comics, plus American thick outlines and various elements of Eastern and Western styles (such as hip-hop, swords, and clothing of different nationalities). This hybrid art is a good reflection of its slogan "committed to being the largest decentralized brand built and owned by the community in the Metaverse world" and its values.

Azuki Values:

◼ Community First: Everything starts with being loyal to the community. The moment we prioritize other things over community, nothing remains. We will not allow such a thing to happen, because the community will always be the first value of Azuki;

◼ Being the Best in the Industry: Azuki is creative, fearless, and tenacious. It's easy to follow trends and incremental improvements, but much harder to be original and stand out. We find our own way;

◼ Progressive Process: All things come with difficulty. Decentralized actions are not like centralized actions that can quickly overcome all difficulties and complete them in one go, and this is a blessing and a curse. Decentralization doesn't mean there can't be a leader. The Core Team will provide guardrails and resources for all Beans to grow together, but this will not happen overnight.

Anyone in the world is welcome to join, and everyone is welcome to create the largest decentralized brand. Why not appeal to those of us Web3 natives who have been attracted and gathered by the vision of decentralization.

Today, in Garden (garden, Azuki community), there are already 66 communities created by Azuki enthusiasts, which proves how amazing the fusion magic of Azuki is.

However, Azuki's later road was extremely bumpy. The bad deeds of the project party and the conflict of ideas led to their collapse, and the community could not save them time and time again.

Defense of Azuki, the power of connection

A drop of water will evaporate quickly even if it falls on hot sand, but thousands of drops of water can become the sea when they gather together. —Marx

Before the Elementals series collapsed, Azuki had actually experienced Fud once. In May 2022, Azuki founder ZAGABOND (hereinafter referred to as ZAGA) published the article "A Builder's Journey" (Builder's Journey) on Mirror, revealing that his In the past year, the team has successively operated three projects, CryptoPhunks, Tendies, and CryptoZunks, all of which ended in failure.

This self-exposure caused an uproar in the community. After ZAGA himself admitted that he was behind the three Rug projects, Azuki then dived to 10ETH, but the negative impact did not last long. It is not a shameful thing, but ZAGA’s bold admission of failure and the spirit of daring to innovate are very important, so shortly after the cut in half, Azuki quickly rebounded to 16ETH.

However, in my opinion, the so-called argument that entrepreneurial failure is not terrible is not the key to this comeback, and this argument has secretly changed the concept. ZAGA is Rug after throwing a pool of mud to the community, and it is not a simple entrepreneurial failure. It would be understandable if the attitude after the failure was sincere, but ZAGA just left a black and white announcement after a few weeks of failure in operation and disappeared.

Rug is an extremely sensitive word in the Crypto world, let alone behind the scenes of three consecutive Rug projects. The key to Azuki's real comeback is that the Holder connection is strong enough. The love for Azuki's art style and the interest relationship firmly connect countless weak-related groups who don't know each other to form an extremely powerful community. At this moment, as a community, internal Voices of dissatisfaction will be shaken and drowned because of the connection, and the external Fud seems to be worthless in front of the floor price raised by the community Holders.

Azuki's first life-and-death defense battle was safely passed under the defense of the community, and Jeremy Cahen, the founder of Not Larva Labs, who repeatedly accused and ironized ZAGA as a fraudster, became the biggest public enemy of the Azuki community.

Looking back at the first time Fud was able to get through safely, in addition to the strong connection power, it is also because Fud's point has not impacted the value of Azuki itself.

Elementals, the Fragmentation of Identity Value

Scarcity is the source of value for all commodities. --Adam Smith

The time came to June this year. The Azuki Las Vegas offline conference unveiled the new series of Elementals through a crazy and cool western-style animated short film. The broadcast of the short film immediately triggered a climax in the community. Holders almost Social media swamped the news.

However, the opening of the map a few days later brought the entire NFT market to a freezing point. The so-called expectation is as high as the disappointment. The opening picture of Elementals has almost nothing to do with the various new elements shown in the trailer, but this is not the most terrible thing. The most terrible thing is that the new series is almost a one-to-one replica of the elements of the Azuki OG series, which can be said to be The official "Piracy" series, and due to technical problems, elements are completely repeated and disordered pictures appear.

The project party's remedy for the duplication of pictures is to directly change the picture of the non-tamperable NFT picture that has been released through the URl in the contract. The issue of duplication of Elementals elements and OG series is directly admitted by the announcement. They are It was designed in this way, and another mung bean will be released based on Beanz (小豆, Azuki's sub-series).

This wave of mysterious operations instantly attracted ridicule from all walks of life. The once impenetrable community fell apart overnight. Some core members of the community even formed Azuki DAO and 20000E DAO to file a lawsuit against the founders to recover ZAGABOND’s offering on Elementals The 20000ETH obtained in The irony is that legal aid and evidence production may also require the help of Azuki community enemy Jeremy Cahen.

Although Chiru Labs (Azuki development team) knows how to be cool enough, they don't understand the identity value brought by Azuki, as ZAGA said in the interview after the event **** overestimated himself, underestimated community. ****Elementals series is fatal to Azuki's economic value and identity value. As a PFP project, the big blue chip Azuki used to be one of the best avatars on social media. You can often see it in the past Famous KOLs on Twitter and veteran players of Web3 wear them to swagger around. It symbolizes not only a member of the strongest blue-chip community, but also a symbol of wealth. But when the same project released a low-priced series with almost identical elements, these symbols lost their meaning. I believe that even ZAGA cannot distinguish the difference between the Elementals series avatars and the Azuki series avatars on social networks. Wearing an Azuki avatar ( Or maybe the Elementals avatar, XD) is the laughing stock of the rest of the community today.

ZAGA did almost everything that should not be done in the Elementals incident, not only trampling on all the meaning of NFT but also betraying their promise to the community in their values, Azuki's powerful connection began to shatter from the core.

The balance brought by the game, the sword of Damocles hangs over our heads forever

Before writing this article, I have read a lot of thinking articles related to the collapse of Azuki, mostly from the perspective of IP and narrative, to discuss how to do a good job of IP, how to find better narrative and application scenarios, but how to do a good job of an IP And how to expand the PFP narrative, this discussion is meaningless based on the size of most NFT project teams and the sudden drop in royalty income under the current extreme bear market of NFT. And Yuga Labs, the only one capable of doing this, has already made a demonstration. Although Yuga Labs' courage and action as a pioneer are admirable, the metaverse narrative launched by its subsidiary BAYC has not saved The continuous release of NFT, new projects and new narratives only resulted in the continuous decline of BAYC and derivative series.

As for finding new application scenarios and new NFT narratives, it seems that there is no better answer than PFP at present. From a cultural and social perspective, the narrative of PFP is naturally contagious and cohesive, which is impossible for other types of NFTs. of.

The problem of extreme centralization of the PFP project at this stage is actually not a secret. We believe that the project party will not do evil, but from the perspective of the game, the project party as a community of interests has no reason to change the map or maliciously issue additional things, but unfortunately this game is contrary to the development of the project side. All the significance of NFT is based on the premise of decentralization. However, the project party has absolute control over the fate of the project. How can a small team of a few or a dozen people ensure that every major decision-making does not make mistakes? Is the picture I bought mine or is it stored in the computer of the project party? If the scarcity and immutable characteristics of NFT have always been the central say, then rather than expecting small teams to continue to create miracles, I would rather buy shares of Walt Disney.

Solving the trust problem and delegating rights are the current things to do. Although the culture created by the project party is what connects the community, any project needs the community to create a high level. Holder has contributed everything to the community. When the core of the community appears They don't even have the right to know when there is a problem.

Azuki's Manifesto

Here comes a new wave...

A new wave is coming...

And surfing here is different.

Surfing here is like no other

Breaking down barriers.

we are breaking down barriers

Building open communities.

Build an open community

Creating magic internet money with our friends.

Create magical Internet currency with friends

To those who don't get it, we tell them: gm.

For those who don't understand, we tell them: GM

They'll come around eventually.

they will understand eventually

Here's to the ones with the courage to jump down a peculiar rabbit hole.

Kudos to those who have the courage to jump down a weird rabbit hole

One that pulls you away from a world that's created by many and owned by few...

It pulls you out of a world created by the many but owned by the few...

To a world that's created by more and owned by all.

Enter a world made by more and owned by all

From The Garden come the human beans that sprout into your family.

The little beans sprouting from the "garden" will be your family

We rise together.

we rise together

We build together.

we build together

We grow together.

we grow together

This is the declaration of Azuki's official website to community members. Although it is a little weak at the moment, they have always been the best project to interpret "We" in the past. Reconstruction still has a long way to go, I hope ZAGA can treat its own community well this time.