As cryptocurrency prices dip after the recent bull run, with some expecting it to be another crypto winter, it might be a suitable time for those interested in the digital asset space to look into NFTs, especially as most floor prices have come down from their peaks.
If you have been lurking around in the digital asset space, you would most likely have heard of CryptoPunks – one of the pioneering NFT projects that has been in the space since its early days and arguably had played a major part in kicking off the crypto-art movement.
These 10,000 unique collectible pixel art characters – stored on the Ethereum blockchain – were algorithmically generated by LarvaLabs, which was previously involved in developing the Sidekick phones (the predecessor to modern smartphones).
Each CryptoPunk has its distinct traits and attributes, and no two are the same.
At the peak of the bull run in November, the floor price for CryptoPunks stood around the 80 ETH mark (worth about USD380,000 at the time).
The appreciation in its value had far outstripped its humble beginnings in June 2017 – these NFTs were given away literally for free, and the buyer just had to cover the transaction fees to acquire one of the 10,000 CryptoPunks.
In August 2021, Visa jumped onto the bandwagon with its 49.5 ETH (USD150,000) purchase of CryptoPunk #7610.
Since then, the project has seen multi-million dollar asset sales, including CryptoPunk #5822 – an alien sporting a blue bandana – which was sold for 8,000 ETH (USD23.7 million) on Feb 12, 2022.
In March 2022, Yuga Labs – the creator of Bored Ape Yacht Club – announced its acquisition of the Intellectual Property of CryptoPunks from Larva Labs, and subsequently decided to give full commercial rights to holders.
A month later, Yuga Labs brought onboard Noah Davis, a key part of the NFT team at auction house Christie’s, to be the brand lead for CryptoPunks.
Yuga Labs has indicated that it is committed to “a slow and thoughtful approach” with the Punks brand, considering the community’s involvement and support.
As the broader crypto market took a turn, the price of NFTs were also dragged down.
While CryptoPunks' floor price has appreciated in ETH terms, the 70% drop in the price of ETH between November 2021 and mid-July 2022 has dragged the floor price of the NFT project to around USD113,000 - about a third of its previous USD380,000 peak.
Given the dip in its fiat-denominated price and the potential plans for the project under the new management, CryptoPunks might be an interesting one to follow.
DeGods, a collection of 10,000 “virtual gods”, is one of the top projects on the Solana blockchain. Holders of the NFTs are allowed into the DeDAO channels on DeGod’s exclusive discord community.
DeDAO is the project’s very own decentralized autonomous organization (DAO), funded by a portion of the marketplace fees for trades of DeGods NFTs on the secondary market.
It seeks to use its funds for asset acquisitions for community auctions and raffles, finance its expansion plans, conduct community events, and reward its community members.
DeGods’ floor price has blown up from its minting price of 3 SOL (worth USD476 at the time) in October 2021, to a whopping 259 SOL (worth about USD10,249) as at July 16, 2022, negating the impact of the 75% drop in SOL’s price to USD39.57 during the same period.
In dollar terms, its floor price has surged 86-fold to USD10,249 as of July 16 sincr its minting last October, despite the generally dampened market sentiment.
At its peak in early June, the DeGods floor price reached as high as 400 SOL (worth USD15,600 at the time) per NFT.
The NFTs can be staked to earn $DUST, which allows holders to participate in auctions, raffles, and whitelist spots, among others.
DeGods holders are also allowed access to de.xyz, a community-owned content platform where holders can publish their own content and own all their contributions.
Its DAO recently made headlines with its USD625,000 purchase of 25 “fire-tier” NFTs associated with the Killer 3s basketball team – one of the BIG3 three-on-three basketball league teams.
Each NFT was priced at USD25,000 and grants the holder the most say in the associated basketball team’s direction and partial IP rights, besides being given access to championship rings and submitting new merchandise designs for BIG3’s approval.
There will likely be more updates from the project in the near future, especially with the team’s next launch coming up for Duppies, another DeGods-associated project which will be minting at 375 $DUST (USD382.5).
While Diamond Alpha also leverages NFTs on its platform, it does so for an actual physical asset class – lab-grown diamonds – setting it apart from most blockchain solutions that do not have a real-world asset's backing.
Diamond Alpha could be seen as a departure from the manic hype-driven crypto assets prevalent in the market, as the project aims to provide a stable and sustainable return for those that invest in its fractionalized NFTs (F-NFTs).
These F-NFTs represent units of ownership of a batch of diamond seeds, and holders can stake their holdings to receive returns in BUSD or USDT.
The project seeks to allow users from anywhere in the world to partake in the diamond-growing process by harnessing the power of Web3.
Users can expect an estimated 8% return on investment (ROI) in 15 days, subject to market conditions, for those that participate in growing their diamonds from their seed stage to the rough stage. Greater returns are also possible if investors decide to stay on until the diamonds complete their polishing stage.
A portion of the gains or service fee goes to the platform, with the balance distributed among all holders of the F-NFTs, based on the number of F-NFTs held.
As NFTs for digital assets have seen some degree of acceptance among the crypto natives and those relatively new to the blockchain space, it is likely just a matter of time before investors look into owning actual real-world assets via NFTs.
The project also acts as a conduit for traditional finance investors to enter crypto, providing them with a physical asset that can be validated and evaluated with a transparent growth trajectory.
About Diamond Alpha
Diamond Alpha is the World's 1st asset-backed Fractional NFT Yield Program, powered by Fract, a "FracTech" provider and the world's 1st physical asset-backed F-NFT trading platform. Diamond Alpha, through its yield program, aims to decentralize participation and access to high-margin opportunities.