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This week’s featured collector is TagachiStudio

TagachiStudio’s is a “creator, collector and contributor.” Their collection of Ethereum NFTs includes a Friendship Bracelet along with different kinds of community membership certificates. Browse TagachiStudio’s gallery at lazy.com/tagachistudio

Two recent NFT projects have attracted a lot of attention among collectors. Here’s a look into what can be learned by their success.

The Quadratic Funding Collection

On the first day of March, a collection of the foundational texts on Quadratic Funding were bundled together and sold as an NFT. Funds raised from the NFT sale were “split between the Gitcoin Grants Matching Pool and the Plurality Institute, both of which fund and support public goods.” It took several days for the NFT sale to get noticed, but once collectors realized that the collection included an essay by Vitalik Buterin, one of the creators of Ethereum, it quickly sold out and became one of this week’s most traded NFTs.

While many commentators have credited the success of this project to Buterin’s association, there are two other aspects worth noting: 1) The NFT is a collection of texts which makes this a success story for NFT books 2) The NFT funded charity, demonstrating the positive potential for NFTs in fundraising.

TwelveFold

This week the creators of the Bored Ape Yacht Club released a generative NFT collection on the Bitcoin blockchain. Bitcoin NFTs are a relatively new invention and the quick adoption by Yuga Labs surprised collectors and inspired creators. TwelveFold was sold via auction and raised over $16m.

The success of TwelveFold suggests a continued hunger among NFT collectors for innovation. The success of TwelveFold wasn’t just because Yuga Labs created it—although that obviously played an important role. It was also because TwelveFold was released onto Bitcoin. This made it feel fresh and exciting. There was a joy to discovering the intricacies of a new blockchain’s NFT system.

This week’s poll: What is your NFT strategy? Are you buying, selling or holding?

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This week’s featured collector is Ayeetoeknee

Ayeetoeknee is a collector of Ethereum NFTs with a focus on sneakers. They also collect artwork by Ron English, a prolific counter-culture street artist. Browse Ayeetoeknee’s full collection at lazy.com/ayeetoeknee

A court case with major implications for the future of NFTs is now underway. The case could decide whether NFTs are securities that require regulation.

In May 2021, the creator of Top Shot was sued by an individual who argued that the NFTs of NBA moments were securities. Now, almost two years later, the case has entered the courtroom and one of the first rulings does not bode well.

A briefing from Skadden, Arps, Slate, Meagher & Flom LLP, a major multinational law firm, explains the situation:

Before the court was the question of whether Moments were investment contracts and therefore securities, which the court analyzed under the Howey test, which examines whether (i) there is an investment of money (ii) in a common enterprise (iii) with a reasonable expectation of profit derived solely by the promotional or managerial efforts of others.

Although the court has not made a decision on whether Top Shots are securities, the court did reject the motion to dismiss the case. This indicates that the court believes it is plausible that the NFTs are securities and, if the case continues, is willing to make a determination.

As an analysis from Blockworks points out: “It is unclear whether the case will proceed to trial or if a settlement may be reached.”

If the case does proceed to trial then there is the potential that a precedent could be set with wide-ranging implications for the NFT ecosystem. After all, if NFTs are securities then it would drastically limit the ability of artists to release them, marketplaces to sell them and individuals to collect them.

All eyes will be on the Top Shot case as it continues to move toward trial.

Learn more at Skadden and Blockworks.

This week’s poll: Will the courts rule NFTs are securities?

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This week’s featured collector is Mortifiedmonke

Mortifiedmonke is a 22-year-old artist based in Upstate New York. Their artwork explores “concepts, styles, and mediums.” Browse Mortifiedmonke’s unique creations at lazy.com/mortifiedmonke

The Sudden Demise of NFT Royalties

We have been actively watching the NFT royalty debate for the last six months.

First, in Newsletter #70, we discussed the rise of SudoSwap, an NFT marketplace that does not pay royalties to creators.

Then in Newsletter #84, we discussed OpenSea’s strong defense of royalties, their declaration that “it’s an existential imperative for the space to preserve creator fees,” and their threat to blacklist marketplaces that did not respect royalties.

But none of that prepared us for this week’s dramatic culmination of the royalty debate: OpenSea has reversed course and no one remains to defend creator royalties.

The story of why OpenSea chose to reverse course is long and fascinating. It involves Blur, an upstart challenger that captured 70% of OpenSea’s marketplace volume, along with economic pressures from an NFT winter and a shift from platforms that earn profits from trading fees to platforms that earn profits from their native token.

For a deep dive into exactly what happened, we recommend reading The Royalty Wars.

With the royalty debate seemingly settled for now, creators are left wondering how they will earn an income from their NFT art. After all, for many artists the majority of their earnings came from royalties and not the initial mint. The lack of royalties could make things difficult for creators. Or perhaps it’ll instigate new approaches. Time will tell.

In any case, we are continuously amazed by the rapid changes happening within crypto and we look forward to seeing what will happen next!

This week’s poll: Do you support mandatory royalties for creators?

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This week’s featured collector is svenmalefist

Svenmalefist is an immersive web developer of realtime illusions. Their Lazy profile showcases artwork they’ve created along with an NFT ticket for the upcoming Non Fungible Conference 2023 in Lisbon. View Svenmalefist’s creations at lazy.com/svenmalefist

Collector Poll Round-Up

For the past few weeks, we’ve asked Lazy collectors to weigh in on topics ranging from whether NFT finance is a good idea to their support for Bitcoin NFTs. In this week’s issue, we’re going to take a look at the results.

In Newsletter #93, we explored some of the ways that the music industry is adopting NFTs and we asked you to tell us what is most exciting. The results were clear: the majority is keen to see NFTs that grant royalties to songs. This is in line with our sense that there is a growing expectation among collectors that NFTs provide financial value beyond speculation and aesthetics.

Newsletter #92 was all about Bitcoin NFTs, a topic that has since continued to generate a lot of debate as more and more projects either clone themselves onto Bitcoin’s blockchain or move their collections entirely. A little more than half of Lazy’s collectors who responded to the poll thought Bitcoin should encourage NFTs.

After $1m worth of NFTs were stolen in a sophisticated hack, we published Newsletter #91 on how to protect yourself. We were also curious to see how many collectors had suffered from a hack. The results were alarming: half the respondents had been hacked at least once. And 1 out of 10 had been hacked more than two times!

Conceptual NFTs were the topic of Newsletter #90. And, to be honest, we were not surprised to learn that most people do not collect them. But, a glimmer of good news for the conceptual NFT artists: 9% of respondents might be willing to collect these kinds of NFTs in the future. Our guess is that there will be a conceptual NFT that breaks through and raises the popularity for the entire genre.

We explored NFT Finance in Newsletter #89. The results of the reader poll suggest many collectors are still making up their minds about NFT Finance: over a third of respondents weren’t sure if it was a positive development. Time will tell if the financialization of NFTs leads to greater mainstreaming or harmful speculation.

That’s it for this month’s poll round-up. Got an idea for a poll we should run? Send us an email and let us know!

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This week’s featured artist: A_Zmfr

A_Zmfr is “an architect and digital artist” whose work explores “fictional design, alternated realities and animate/inanimate worlds.” A_Zmfr users their Lazy profile to showcase four of their artworks. Take a look at lazy.com/a_zmfr

The music industry continues to explore NFTs. Here are three promising experiments that happened this week:

1. Def Jam Signs NFT band The Whales in Latest Major-Label Web3 Partnership

Billboard, the venerable music industry publication, reports that Def Jam has signed The Whales, an NFT band, whose “debut full-length album has an all-star cast of producers and songwriters attached.”

Interestingly, Def Jam is not the first to see the value of a band backed by a community-led NFT project. Billboard explains: “The virtual artist NFT playbook is becoming a trend among bigger record labels. The same concept was executed by 10:22PM — another Universal Music Group imprint — which licensed characters from the Bored Ape Yacht Club to create the animated band KINGSHIP. Warner Records’ Web3 subsidiary Probably a Label is also developing a virtual artist in collaboration with its 5,555 NFT holders through a voting system.”

2. Rihanna Producer Sells Royalties to Hit Song as NFTs

Decrypt reports that a portion of the royalties for Rihanna’s song “Bitch Better Have My Money” is now being redistributed to holders of 300 Ethereum NFTs. “Each [NFT] signifies ownership over 0.0033% royalty rights to the song, promises “lifetime” ownership of that portion of the copyright, and grants holders the percentage of streaming rights from the master recording,” the report explains.

3. Linkin Park’s New Music Video Is Directed by NFT Artist Pplpleasr

Another report from Decrypt signals the growing prominence of web3/NFT artists. A new music video from Linkin Park “has a Web3 connection: it’s directed by noted digital artist Emily “pplpleasr” Yang and Maciej Kuciara, co-founders of Web3 video platform Shibuya. […] And showcases Mirai, the protagonist of Shibuya’s NFT-driven anime web series, ‘White Rabbit.’” With NFT artists having greater and greater cultural impact, it is clear that NFTs are here to stay.

As the the music industry increasingly sees the value of NFTs, the relationship between fans and artists is reaching a new level.

This week’s poll: What is the most exciting use of NFTs by the music industry?

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This week’s featured collector: SpicyShrimpTaco

SpicyShrimpTaco’s motto is “Metaverse or bust.” They are an artist and NFT collector with a special fondness for CryptoKitties. Check out their full collection at lazy.com/spicyshrimptaco

Crypto is an ever evolving field. Want proof? Consider these two words you probably never thought you’d hear together—Bitcoin NFTs. That’s right: a clever developer has figured out how to store NFTs on the Bitcoin blockchain. The move has sparked curiosity and controversy.

Bitcoin was the first blockchain. And in the decade since its creation there have been many fierce debates on if, and how, Bitcoin should change. For example, one of the most notorious fights was over the size of the blocks in the blockchain. Ultimately, the core developers of Bitcoin adopted a conservative path: minimally updating the protocol while focusing on Bitcoin as a technology for storing and transferring value.

That is why it has come as a surprise that a 2021 update to Bitcoin known as “Taproot” has unwittingly made it possible to add NFT functionality to the Bitcoin blockchain. Now a clever developer has discovered a way to make it happen.

Bitcoin NFTs are being called “inscriptions.” The protocol for these inscriptions is called Ordinals. For a fascinating technical deep dive into how these Bitcoin NFTs work, read Illegitimate bitcoin transactions.

The growing popularity of Bitcoin NFTs is already sparking debate. While some are excited to see Bitcoin learn new tricks, others see these NFTs as a mis-use of the technology.

Isn’t it interesting that NFTs are playing the role of catalyst once again? We are keen to see how this will play out.

This week’s poll: Should Bitcoin embrace NFTs?

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This week’s featured collector: ClipCity

ClipCity’s motto is “No idea what I’m doing and that’s the fun part.” And we appreciate the spirit! Their collection focuses on Ethereum profile pics and NBA TopShots. Includes many projects we’ve never seen before. Check it out at lazy.com/clipcity

Hackers strike again… Here’s how to protect yourself from the sophisticated scam that stole $1m worth of NFTs from Kevin Rose, the creator of Moonbirds

A couple days ago, Kevin Rose, the creator of Moonbirds, lost over $1,000,000 worth of NFTs. This is another dramatic reminder that even highly knowledgeable NFT creators and collectors can fall for sophisticated hacks.

This week we are going to discuss what happened and how you can protect yourself.

How was Kevin Rose hacked?

Technically, Kevin Rose was hacked because he signed a malicious signature request that transferred his NFTs to the hacker.

The way the hack works, in simple terms, is that the victim visits a scam website that appears legitimate. The website requests that they sign a transaction and explains that the signature is needed to login or claim an NFT. However, the signature actually gives the malicious site permission to transfer the victim’s NFTs using OpenSea’s Seaport protocol.

The signature request might look something like this:

As you can see, there is nothing obvious in the signature request that alerts the user to the fact that it’ll steal all your NFTs. This explains why people keep falling for this particular hack.

How can you protect your NFTs?

First, and most obviously, the best way to protect yourself from this hack is by only signing transactions that you trust. The trouble, however, is that hackers are now going to extreme lengths to craft websites that appear 100% legitimate. So it is important to be skeptical of any website that requests your signature.

The reason this hack has been so effective is that the signature request is not written in a human readable format. After all, it is hard to understand that signing a string of numbers can jeopardize your NFTs.

To address this, there are a few browser extensions that aim to make all signature requests human readable.

Two options are the browser extension from Revoke.Cash and Fire. We haven’t fully tested these, so please do your own research before installing.

Given the recent spate of high profile hacks, there is a lot of pressure building for a solution at the wallet level. It is likely that we will see MetaMask and other wallets introduce features to protect their users from NFT scams. Until then, stay safe!

This week’s poll: Have you ever lost NFTs in a hack?

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This week’s featured collector: Jeevan

Jeevan has a sizable collection of Ethereum NFTs. In fact, they have a little bit of everything—from ENS names to generative art to profile pics. Lots of interesting finds! Check it out at lazy.com/jeevan

What do you think about Conceptual NFTs?

This week jpg.space released a curated list of Conceptual NFTs. This is a genre of NFTs “in which the idea or concept takes precedence over traditional aesthetic, technical, or material concerns.” In other words, while many NFTs are judged by how they look, Conceptual NFTs are judged by their ideas.

The curated list of Conceptual NFTs has generated some buzz in the ecosystem. Primarily because this is not a genre that many collectors are familiar with. In fact, 32 out of 75 NFTs on the list have 0 volume.

View the full list here.

So what do you think? Is this a tremendous opportunity to scoop up NFTs in a neglected genre? Or are Conceptual NFTs interesting but not worth collecting?

 🎨 Lazy.com is seeking a UX/UI designer with an interest in NFTs. 🖌

Tens of thousands of collectors use Lazy.com to display their NFTs. Help us shape what they see. Apply now by sending a sample of your work.

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This week’s featured collection: dklounge

Dklounge is the web3 pen name of Dennie Kim, an Assistant Professor of Business Administration at the University of Virginia. (Don’t worry, we’re not doxxing Dklounge, they list their real name publicly.) Dklounge’s collection is very cool: it ranges from Top Shots to Invisible Friends and more. Check it out at lazy.com/dklounge

Financial engineering is coming for NFTs in 2023. It is an exciting development… but is it good for the industry?

Just two weeks into the new year and it is clear that one of the biggest developments for NFTs in 2023 will be the merging of DeFi with NFTs. This trend is being called NFT Finance.

Previously the main thing that could be done with a collectible art NFT was to buy and hold it.

Now, traders will be able to take out complicated perpetual futures and options to bet on the rise and fall of NFTs without ever owning one directly. For a taste of what is to come, take a look at nftperp.xyz and hook.xyz.

On the one hand, these developments are exciting: they are proof that the NFT ecosystem continues to grow, attracting new participants and fostering new ways of interacting with NFTs.

On the other hand, the financialization of NFTs could open the door to negative outcomes: pushing NFTs away from art and culture toward financial engineering and gambling.

Either way, we will be watching these developments closely. It is clear that some serious building is happening during this bear market!

What do you think about NFT Finance? Fill out this poll and let us know!

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Tens of thousands of collectors use Lazy.com to display their NFTs. Help us shape what they see. Apply now by sending a sample of your work.

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This week’s featured collection: MiguelFaus

MiguelFaus is a writer and director from Barcelona, now living in London. ​ His first feature film, Calladita, was the first European movie funded by NFTs. MiguelFaus’s collection includes several famous NFTs, such as CryptoPunks, HashMasks and Ringers. Check it out at lazy.com/miguelfaus

Hello 2023! This week we are kicking off the New Year by deepening our understanding of how NFTs work. You may be comfortable navigating an NFT marketplace, but today we’re going to look behind the scenes at smart contracts on the blockchain.

Let’s start with a basic recap. In very simple terms, there are three kinds of cryptocurrencies: 1) native tokens that power a blockchain 2) fungible tokens or 3) non-fungible tokens (NFTs).

Native tokens, like Ethereum, are the fuel for the blockchain: you spend the native token to pay for transactions, such as transferring an NFT.

Fungible and non-fungible tokens are managed by smart contracts that run on the blockchain. What distinguishes NFTs from fungible tokens is that each NFT is one-of-a-kind. Think of it this way: each NFT has a unique serial number. And if you know the serial number of an NFT then you can also prove who owns it.

With that background out of the way, we can now look more closely at a specific NFT’s smart contract.

We’ll look at an NFT that we don’t own: Azuki.

First, we head to OpenSea and find Azuki’s smart contract address by clicking the Etherscan icon on the collection page.

Etherscan is a blockchain explorer. It tells us everything that is happening on the blockchain in an easy to read format. Each NFT has a smart contract that keeps track of ownership and other information.

Azuki’s smart contract address is 0xed5af388653567af2f388e6224dc7c4b3241c544 and if we open that address in Etherscan then we see this page:

Spend some time exploring this page. For now, we’re going to click on the Contract heading. This will load the NFT’s smart contract. If we are doing due diligence on a project then we could look at the smart contract to see if it was sophisticated or a simple copy/paste.

If you’re not a programmer then looking at the smart contract isn’t particularly helpful. Instead, try clicking on the “Read Contract” button. This allows you to query the NFT’s smart contract for information. You can scroll down to “ownerOf” and put in the serial number (or “tokenId”) of an Azuki NFT.

For example, if you put in the tokenId 1 then it will tell you who owns that NFT:

Keep playing around with the Read Contract screen and you’ll notice that all kinds of information is stored in the smart contract. For example, if you go to tokenURI and input 1 then the smart contract will give you a link to where the NFT’s image and attributes are stored.

In this case, the NFT’s information is stored on IPFS, a distributed file storage system.

Now you can understand how an NFT marketplace knows the attributes of your favorite NFT: the smart contract tells the marketplace where the information is stored!

Congratulations, you just interacted with an NFT smart contract running on the blockchain! Keep exploring and let us know what you learn!

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Tens of thousands of collectors use Lazy.com to display their NFTs. Help us shape what they see. Apply now by sending a sample of your work.

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