This week’s featured collector is FlowMade

FlowMade is an emerging visual artist and multi disciplinary illustrator. Check out their artwork at lazy.com/flowmade

The results of last week’s poll: What’s the strongest sign NFTs aren’t dead?

Last week’s poll on the vitality of NFTs reveals compelling insights into community perceptions. The majority of respondents (50%) believe that expanding use cases are the strongest indicator that NFTs are still thriving, suggesting a growing recognition of their potential beyond digital art and collectibles. This is closely followed by 38% who point to persistent market activity and sales as key evidence of NFT resilience. Interestingly, 13% see adoption by traditional sectors as the most convincing sign, indicating an awareness of how established industries are integrating NFT technology.

The poll results paint a picture of a maturing NFT ecosystem, where focus has shifted from speculative hype to practical applications and real-world adoption. Overall, these findings underscore the community’s belief in the long-term potential of NFT technology, despite market fluctuations, and highlight a transition towards more diverse applications of NFTs.

Three Types of Hacks: How to Protect your NFTs

Once you’ve curated your collection of NFTs, it is crucial to keep them safe. Clearly no one wants to get hacked. So how can you prevent it? This week we’re revisiting a topic we first covered in Lazy Newsletter #47—three common hacks and how to avoid them.

1) Discord Hijack

Imagine you’re hanging out in the Discord of a new and exciting NFT project when you see an urgent post from an admin announcing a surprise mint. Wow, right!? You rush to send your hard earned eth only to discover that the admin’s account had been hacked and the mint was fake. Welcome to the new wave of Discord hijacks.

This kind of attack is becoming more common. Protecting yourself from Discord hijacks can be difficult because the hackers will often move quickly and ban other admins who could alert the community to the fraud. The best defense is to be skeptical of any previously unannounced surprise mints.

2) Phishing Websites

This time you’re hanging out on X, proudly displaying your Bored Ape Yacht Club NFT, when you receive a message promising to animate your NFT. Very cool! When you visit the site, it prompts you to connect your wallet and submit a transaction. You accept and your BAYCs disappear forever. This happened to a Bored Ape Yacht Club member who fell for this scam and lost 3 apes ($900K at that time).

To guard against this type of hack it is important to remember that any transaction you sign or submit on a website could potentially interact with your NFT’s smart contract. That’s because smart contracts live on the blockchain and any website can interact with the contracts. So the best protection is to be wary of completing transactions on websites that you don’t 100% trust.

Oh, and by the way, if someone is offering to create an animated version of your BAYC then they don’t need you to submit a transaction on the blockchain. That’s why there is some truth to the old “right click, save as” meme.

3) MetaMask Compromise

The third kind of attack is more sophisticated than the other two and it has been proven to work against technically savvy crypto users. In fact, a prominent crypto VC fell victim and lost over a $1.7m worth of NFTs.

The hack begins with a phishing email or message pointing to what looks like a very interesting shared Google Doc. When the user clicks on the link, their computer is unwittingly infected with malware that compromises their MetaMask. Once the user’s MetaMask has been replaced with a malicious version, the hacker gains access to their wallet seed phrase and can also spoof transactions.

To protect against this attack, aside from not clicking on links, it is important to periodically check that your MetaMask has not been replaced with a malicious version. To do this, in Chrome, click Window -> Extensions and make sure that “Developer Mode” is ticked OFF. 

This week’s poll: Have you ever lost an NFT because of a hack?

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This week’s featured collector is AtomicMouse

AtomicMouse’s motto is “keeper of key, sweeper of floors and winner of bread.” They have a large and diverse NFT collection. Check it out at lazy.com/atomicmouse

The results of last week’s poll: When was the last time you purchased an NFT?

The recent poll on NFT purchasing activity offers a nuanced view of current market engagement. On the one hand, 47% of respondents reported buying an NFT within the last 30 days, suggesting active participation. On the other, 33% of respondents last purchased over a year ago, indicating a significant portion of surveyed individuals who have stepped back from active buying. The even distribution of 7% for purchases made 1-3, 4-6, and 7-12 months ago presents an interesting pattern, reflecting steady but subdued activity over the past year.

Exploring new frameworks for NFT royalties

This week a16zcrypto released a comprehensive analysis exploring the challenges and potential solutions surrounding NFT royalties, a key value proposition for creators in the digital art space. The article delves into the current limitations of enforcing royalties on-chain, primarily due to the difficulty in distinguishing between sales and other types of transfers. It then examines existing solutions like blocklists and allowlists, highlighting their pros and cons in balancing royalty enforcement with NFT composability – the ability for NFTs to interact with various applications and smart contracts.

The piece introduces two novel approaches to NFT royalties that aim to improve upon current models. The first proposes combining an allowlist with a staking mechanism, allowing applications to permissionlessly join the allowlist by staking resources as a commitment to enforce royalties. The second, called “right of reclaim,” introduces a dual ownership model that incentivizes royalty payments without restricting composability. These innovative frameworks aim to address the fundamental tension between strict royalty enforcement and open composability in the NFT ecosystem.

Throughout the discussion, the article emphasizes the importance of finding solutions that preserve composability, maintain digital property rights, and ensure fair compensation for creators. It acknowledges that there is no one-size-fits-all solution and encourages builders and creators to understand the various royalty designs and their tradeoffs to choose the best fit for their unique goals. For a deeper understanding of these complex issues and potential solutions in the evolving NFT landscape, readers are strongly encouraged to explore the full report, which offers valuable insights for creators, collectors, and developers in the NFT space.

7 Reasons Why NFTs Are Not Dead

1. Market Maturation: The NFT market isn’t dying; it’s maturing. This phase focuses on sustainability and real-world utility, moving beyond the initial hype to more stable, long-term applications.

2. Evolving Use Cases: NFTs are expanding beyond digital collectibles. They’re finding new applications in various industries, including the creator economy, real estate, and financial markets, demonstrating their versatility and ongoing relevance.

3. Technological Advancement: The NFT industry has developed revolutionary global property rights systems. This infrastructure enables unique digital ownership and authenticity verification at a fraction of traditional costs, positioning NFTs as a transformative technology.

4. Ongoing Innovation: Despite market corrections, innovation in the NFT space continues. New platforms in SocialFi and GameFi are emerging, and there’s growing interest from institutional investors as NFTs become more purpose-driven.

5. Persistent Market Activity: While volumes may be down from peak levels, significant activity remains in the NFT market. For example, Bitcoin-based NFTs have recorded substantial sales volumes, indicating continued interest and engagement.

6. Industry Transformation: NFTs are reshaping various sectors by providing new ways to represent and trade assets. From digital art to stocks, bonds, and carbon credits, NFTs are creating unprecedented possibilities for ownership and value transfer.

7. Long-term Potential: Experts view the current state as part of a cycle rather than an endpoint. The foundational technology of NFTs holds immense potential for future applications and broader adoption, suggesting a promising future beyond current market conditions.

While the NFT landscape has evolved from its initial boom, it’s far from obsolete. Instead, NFTs are entering a new phase of development focused on practical applications and sustainable growth, positioning them for long-term relevance in the digital economy.

Read more on why NFTS are not dead at Coindesk and CoinTelegraph.

This week’s poll: What’s the strongest sign NFTs aren’t dead?

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This week’s featured collector is Lawr

Lawr is a collector of Ethereum NFTs with a focus on profile pictures. A few different styles and some surprises. Check out their collection at lazy.com/lawr

The results of last week’s poll: Should governments regulate the NFT market?

The poll on NFT market regulation reveals a stark divide in opinion, with half of respondents opposing government oversight while the other half is split between support and uncertainty. This fragmentation reflects the broader debate in the crypto and NFT communities about the role of traditional regulatory bodies in decentralized markets. The strong preference for an unregulated environment suggests many view government intervention as a potential threat to the innovative nature of the NFT space.

The Stormtrooper Scandal: A Cautionary Tale for NFT Collectors

“The Stormtrooper Scandal,” a newly released documentary, offers a fascinating glimpse into the wild west of early NFT projects, serving as both a cautionary tale and a testament to the disruptive potential of blockchain technology in the art world.

For NFT enthusiasts, the film provides valuable insights into the complexities and pitfalls of large-scale NFT drops, especially when traditional art and intellectual property rights collide with the decentralized ethos of crypto. Ben Moore’s journey from charity art curator to overnight crypto millionaire highlights the immense opportunities NFTs present for reimagining art ownership and distribution. The lightning-fast sellout of the Art Wars collection demonstrates the fervent demand for NFTs tied to recognizable IP and established artists.

However, the subsequent unraveling of the project due to copyright issues and lack of artist consent serves as a crucial lesson for collectors and creators alike. It underscores the importance of due diligence, clear provenance, and respect for intellectual property rights in the NFT space. While the film may paint a somewhat negative picture of NFTs, savvy collectors will recognize that it primarily exposes the pitfalls of rushing into projects without proper groundwork.

Ultimately, “The Stormtrooper Scandal” is a must-watch for NFT collectors. It provides valuable context for the evolution of the NFT market and serves as a reminder of the transformative potential of NFTs when executed responsibly. As the space continues to mature, learning from early missteps like those depicted in this film will be crucial for collectors navigating this exciting new frontier.

Watch on the BBC’s iPlayer. (UK only, unfortunately).

The Art of NFT Navigation: Insights from Tyler Warner

In a recent interview, Tyler Warner, known as Tyler Did It on social media, offered a candid account of riding the NFT wave to a portfolio peak of 1,000 ETH (~$3 million), only to see much of it evaporate in the subsequent bear market. The interview encapsulates the exhilarating highs and sobering lows familiar to many in the space.

Warner’s enduring optimism for digital sports collectibles, particularly NBA Top Shot, reflects a nuanced understanding of how blockchain technology is reshaping traditional markets. His experience with Pudgy Penguins – from early adoption to strategic exit and re-entry – offers a masterclass in navigating project lifecycles and the critical importance of leadership in determining long-term value.

For NFT collectors and crypto enthusiasts alike, Warner’s insights serve as both a beacon and a warning, highlighting the need for strategic acumen, continuous learning, and resilience in the face of market volatility. His journey underscores that in the world of digital assets, success is not just about riding waves, but about understanding the tides that create them.

Read the full interview at Cointelegraph Magazine.

This week’s poll: When was the last time you purchased an NFT?

We ❤️ Feedback

We would love to hear from you as we continue to build out new features for Lazy! Love the site? Have an idea on how we can improve it? Drop us a line at info@lazy.com

This week’s featured collector is Toomcooy

Toomcooy is an artist that is using Lazy to showcase their original, hand-drawn comic characters. Check out their collection at lazy.com/toomcooy

The results of last week’s poll: What do you think will happen with prices at Sotheby’s upcoming auction of rare Bored Ape NFTs?

We were surprised by last week’s poll which revealed mixed expectations for the upcoming Sotheby’s auction of rare Bored Ape NFTs, with a strong 42% of people anticipating disappointing results. While 37% believe prices will be solid but not reach new highs, a notable 21% still see potential for record-breaking sales. This divergence suggests an underlying tension between market skepticism and persistent optimism, with the auction serving as a key barometer of sentiment. The auction’s outcome will undoubtedly offer valuable clues about the near-term direction of the NFT space.

South Korea Issues Guidelines to Regulate Certain NFTs as Cryptocurrencies

South Korea’s Financial Services Commission (FSC) has released guidelines to clarify the regulatory status of NFTs. The guidelines aim to differentiate between NFTs with unique qualities and those that may be classified as cryptocurrencies or securities. NFTs that are mass-produced, exchangeable, fractionalized, or used for payments may be regulated as cryptocurrencies, while non-transferable tokens with little to no economic value would be considered regular NFTs. The distinction will be made on a case-by-case basis, without a single absolute standard for interpretation.

These guidelines precede South Korea’s first crypto-focused regulatory framework, the Virtual Asset User Protection Act, which will be fully effective from July 19. The law aims to combat illicit market activities and requires cryptocurrency service providers to safeguard deposits and enroll in insurance programs to protect user funds.

For NFT collectors, understanding the regulatory landscape in different jurisdictions is crucial. As governments worldwide grapple with regulating the evolving NFT and cryptocurrency markets, collectors should stay informed about the potential implications of these regulations on their holdings. The South Korean government’s efforts to provide clarity and protect investors may serve as a model for other countries, but the case-by-case approach to classifying NFTs may lead to even more uncertainty.

Learn more at The Block.

Dapper Labs’ Settlement Offers Guidance for NFT Issuers to Avoid Securities Liability

Dapper Labs, the creator of NBA Top Shot Moments and CryptoKitties, has agreed to settle a putative class action suit alleging that its NBA-endorsed NFTs were offered and sold as unregistered investment contract securities. The settlement, subject to court approval, provides valuable guidance for NFT issuers seeking to avoid securities liability. As part of the settlement, Dapper has agreed to decentralize the Flow blockchain, allow Moments to be sold on other marketplaces, improve withdrawal processes, relinquish control of reserve Flow tokens, and train personnel on compliant marketing. Although not setting a legal precedent, this settlement, along with two SEC settlements (Impact Theory and Stoner Cats), highlights key factors NFT issuers should be cautious about, including control over the native blockchain, exclusive marketplaces, using revenues to develop products, and marketing suggesting investment value.

For NFT collectors, understanding the structure, technology, and marketing of NFT projects is crucial in assessing the risk of an NFT being considered a security. The Dapper Labs settlement provides a helpful framework for navigating the complex intersection of NFTs and securities law.

Go deeper on this analysis at K&L Gates.

This week’s poll: Should governments regulate the NFT market?

We ❤️ Feedback

We would love to hear from you as we continue to build out new features for Lazy! Love the site? Have an idea on how we can improve it? Drop us a line at info@lazy.com

This week’s featured collector is Lofiretrowave

Lofiretrowave is a digital creator who creates artworks with themes of time, culture, and space. Check out their collection at lazy.com/lofiretrowave

The results of last week’s poll: What’s your reaction to the NFT market downturn as seen in the falling indexes?

Last week’s poll results on the NFT market downturn reveals a community largely skeptical about a near-term recovery, with nearly half believing NFTs need fundamental reinvention to rebound. While some see a buying opportunity amidst the falling indexes, overall confidence remains low. NFT collectors should proceed cautiously, monitoring the space for innovative approaches that could breathe new life into the market. If this poll is to be believed, savvy collectors may find attractive deals, but should remain highly selective and take a long-term view.

Sotheby’s ‘Gold Fur’ Bored Ape NFT Auction Will Retest Art World Demand

Sotheby’s, the famous auction house, is gearing up to sell a curated batch of Bored Ape Yacht Club related Ethereum NFTs on June 18. The highlight of the auction is a gold-furred Bored Ape, accompanied by other rare NFTs from the Mutant Ape Yacht Club and Bored Ape Kennel Club collections.

The gold-furred Ape #8552, formerly owned by the now-bankrupt crypto hedge fund Three Arrows Capital (3AC), is expected to draw significant attention from collectors. Gold fur is a highly sought-after trait, with only 46 out of 10,000 Apes featuring this characteristic. The last gold-furred Ape sold for $933,000 (247 ETH) in March, and Sotheby’s has previously facilitated a record-setting $3.4 million sale of a similar Ape in 2021.

The auction comes at a time when the prices of more common Bored Apes have dipped dramatically from their peak in April 2022. The floor price for a Bored Ape has dropped from nearly $430,000 to $47,500 (12.6 ETH) over the past year, despite Ethereum’s upward climb.

For NFT collectors, this auction presents an opportunity to gauge the staying power of Ape-themed assets in the fine art community. The provenance of the NFTs, particularly their association with 3AC, may also influence their value and desirability.

As the NFT market continues to evolve, high-profile auctions like this one at Sotheby’s serve as a barometer for the demand and perceived value of rare and sought-after digital assets. Collectors should keep a close eye on the results of this auction, as it may provide insights into the future direction of the NFT art market and the potential for further mainstream adoption.

U.S. Charges Three Individuals in Connection with Evolved Apes NFT Rug Pull

The U.S. has brought charges against three individuals in connection with the Evolved Apes NFT scam from 2021. The defendants are facing charges of wire fraud and money laundering.

Evolved Apes was an NFT project that promised investors a unique collection of 10,000 NFTs and the development of a video game. However, a week after the project’s launch, the anonymous developer known as “Evil Ape” disappeared with 798 ether (approximately $3 million at today’s price) from the project’s funds, leaving the promised video game undelivered.

U.S. Attorney Damian Williams stated, “The defendants ran a scam to drive up the price of digital artwork through false promises about developing a videogame. They allegedly took investor funds, never developed the game, and pocketed the proceeds. Digital art may be new, but old rules still apply: making false promises for money is illegal.”

This type of scam, known as a “rug pull” in the crypto world, is an exit scam where developers raise funds from investors through the sale of tokens or NFTs and then abruptly shut down the project and disappear with the money. According to De.Fi’s Rekt database, over $14.5 billion has been lost to rug pulls since 2011, with the largest being South African digital assets investment fund Africrypt, which absconded with 69,000 bitcoins (nearly $4.8 billion) in 2021.

For NFT collectors, this case serves as a stark reminder of the risks associated with investing in NFT projects, particularly those that make grandiose promises without a proven track record. It is crucial for collectors to conduct thorough research and due diligence before investing in any NFT project, and to be wary of projects that seem too good to be true.

This week’s poll: What do you think will happen with prices at Sotheby’s upcoming auction of rare Bored Ape NFTs?

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We would love to hear from you as we continue to build out new features for Lazy! Love the site? Have an idea on how we can improve it? Drop us a line at info@lazy.com

This week’s featured collector is AaronHaber

AaronHaber is a writer and comedian with a passion for Ethereum NFTs. Check out their collection at lazy.com/aaronhaber

The results of last week’s poll: Will the U.S. crypto regulation bill impact the global NFT market if passed?

Last week’s poll results show that a staggering 60% of respondents believe the U.S. crypto regulation bill will massively impact the global NFT market if passed. Only 20% believe it will have minimal or no impact.

This overwhelming expectation of a substantial global impact suggests that NFT collectors and enthusiasts are closely monitoring the regulatory developments in the U.S., recognizing that the country’s stance on crypto and digital assets could set a precedent for other nations to follow. The high percentage predicting a “huge impact” implies that the bill’s passage could potentially reshape the NFT landscape, influencing factors such as investor confidence, project attraction, and the focus on decentralization.

As the bill progresses through the legislative process, NFT collectors worldwide will need to stay informed about its implications and adapt their strategies accordingly, while also keeping an eye on regulatory developments in their own regions.

Ethereum ETF Approval is on the Horizon in US

Attention, NFT collectors! In a turn of events that just a few weeks ago seemed practically impossible, spot Ethereum ETFs are one step closer to reality in the U.S.

According to a report in The Block, the U.S. Securities and Exchange Commission has asked prospective issuers to submit their amended S-1 forms by Friday, according to two sources familiar with the situation. This move comes after the SEC approved the 19b-4 forms on May 23, leaving only the S-1 forms to become effective before trading can commence. VanEck and BlackRock have already submitted their amended S-1 forms, with the latter detailing a $10 million seed investment for its ETF. However, the process may take a few weeks or even months, as the forms are expected to go through at least two more rounds of draft filings before they are ready.

What does this mean for NFTs? Well, for one thing it shows that crypto is becoming fully entrenched in the financial system. The introduction of spot Ethereum ETFs could potentially bring more mainstream attention and liquidity to the market, which may have a ripple effect on NFT valuations and adoption. As Ethereum becomes more accessible to institutional investors and the general public through these ETFs, it could drive up demand for the cryptocurrency, leading to increased activity on the Ethereum blockchain. This, in turn, may attract more users to the NFT space, as many popular NFT marketplaces and projects are built on the Ethereum network.

Furthermore, and this is a long shot, the approval of spot Ethereum ETFs could pave the way for other crypto-related investment vehicles, such as NFT-focused ETFs or funds. This would provide NFT collectors and creators with more opportunities to diversify their portfolios and gain exposure to the growing NFT market.

However, it’s important to note that the impact of spot Ethereum ETFs on the NFT space is not guaranteed and may take time to materialize. As with any investment, there are risks involved, and the crypto market is known for its volatility. NFT collectors should continue to do their own research, stay informed about market developments, and make decisions based on their individual goals and risk tolerance.

NFT Indexes Fall to Record Lows

Despite optimism over the ETH ETF, the NFT market continues to face challenges, with indexes designed by crypto analytics platforms Nansen and CryptoSlam falling to their lowest levels since launch.

Nansen’s flagship NFT-500 index, which tracks 500 selected Ethereum-based collections, dropped to 213 points on May 26, suggesting that a $1,000 investment at the beginning of 2022 would now be worth just $213. Other indexes representing various NFT categories, such as Blue-Chip 10, Metaverse, Social-100, Art-20, and Game-50, are also either at or near their record lows.

Metaverse NFTs have been hit the hardest, with their index falling by 92% to a record low of 80 in mid-April 2024, before recovering slightly to 91 points. Meanwhile, CryptoSlam’s Composite NFT-500 Index, which tracks 500 collections across 11 non-Bitcoin chains, touched its lowest level on May 19, representing a staggering 95% decline from its launch.

The NFT market has been in a prolonged slump since the hype of 2021, with recent recovery attempts mainly driven by Bitcoin NFTs built on the Ordinals protocol, which are not tracked by these indexes.

Despite the current downturn, the long-term potential of NFTs remains promising, with the technology finding applications in various industries, from art and gaming to real estate and beyond. As the market matures and adoption grows, we may see a resurgence in NFT activity, but for now, collectors should exercise caution and make informed decisions.

Read more at NFTGators.com

This week’s poll: What’s your reaction to the NFT market downturn as seen in the falling indexes?

We ❤️ Feedback

We would love to hear from you as we continue to build out new features for Lazy! Love the site? Have an idea on how we can improve it? Drop us a line at info@lazy.com