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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?

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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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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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This week’s featured collection: Illestrater

There is something deeply satisfying about browsing an extremely large collection of NFTs. That is why this week’s featured collector is Illestrater, whose Ethereum NFT collection is extensive and includes many big name projects along with new ones worth discovering. Have fun looking through their collection at lazy.com/illestrater

Learning to “Delegate” could be the most important new skill for NFT collectors in 2023. Here’s how delegation can keep your NFTs safe.

A few of weeks ago, an extremely sophisticated scammer stole over a million dollars worth of NFTs from a Bored Apes collector. Although hacks are common, this particular scam attracted a lot of attention due to its complexity.

In brief, the scammer contacted the victim and claimed they wanted to license their Bored Ape for an upcoming film. When the collector went to sign the paperwork, they were asked to login to a web3 site. The site requested their signature and their Apes were instantly stolen.

Many people assume that signing a transaction is harmless, after all it is how we sometimes login to web3 sites. However, these scammers exploited a feature of OpenSea’s marketplace that allows the creation of private auctions using signatures. In other words, if you sign the wrong transaction it can be used to steal your NFTs. Scary!

For a full analysis of the scam, check out this thread.

One of the best ways to protect against getting scammed is to delegate your NFTs.

There are a few different delegation systems. The most well known is delegate.cash. Others, such as the one announced by Punk6529, will be released soon.

The way they work is simple:

1. You, the collector, store your NFTs in a cold wallet

2. You use a delegation system to link your cold wallet to a hot wallet

3. When a site wants to check if you own a specific NFT, it queries your hot wallet address instead of your cold wallet.

In other words, websites and smart contracts interact with your hot wallet (which does not contain any NFTs) instead of your cold wallet. And because your hot wallet is empty, nothing can be stolen.

It is an elegant solution. However, it does require NFT projects to upgrade their smart contracts and/or websites to support delegation. The best way to encourage that process is for collectors to make delegation a core part of their strategy for staying safe in 2023.

Thanks for reading! We wish you a wonderful end to 2022!

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This week’s featured collection: LongZai

Some collections show off the potential of NFTs and that is why we were delighted to discover LongZai. What makes their collection different is that it contains NFTs that prove they have completed web3 programing courses. For example, LongZai has a certificate for a course on “Advanced Solidity Syntax.” Very cool and we expect this will be more common in the future. Check it out at lazy.com/longzai

It’s been a wild ride for NFT and crypto enthusiasts in 2022. From the continued mainstreaming of NFTs—who could have predicted Trump would launch an NFT collection!?—to the collapse of FTX, it’s been a year of innovation and setbacks. As 2022 comes to a close, it’s a great time to look ahead to what the future might hold.

Here are three predictions we’re thinking about:

1. “NFTs stand on the cusp of the greatest adoption curve in history.” — RedPhone.eth

The crypto storyteller RedPhone.eth has released their annual “69 Theses” — a fascinating philosophical analysis of where crypto is headed in the year ahead. One of their strong claims is that NFTs are about to see massive adoption by the largest Web2 players. They write:

“Facebook, Instagram and Reddit have entered the chat. Now, NFTs stand on the cusp of the greatest adoption curve in history. All the Web2 participants will likely enter in 2023 (Amazon, Google, Apple, etc.) and NFTs will go parabolic… perhaps not in price but in minting and trading and exposure to new crypto participants.”

Read the full 69 Theses.

2. “For a long time, I have been bullish on blockchain identity but bearish on blockchain identity platforms.” — Vitalik Buterin

Earlier this month, Vitalik Buterin, the founder of Ethereum, released a detailed blog post entitled “What in the Ethereum application ecosystem excites me.” It is well worth reading for an insight into what the ultimate Ethereum insider sees as the most promising directions for crypto in 2023. Most interestingly, although Vitalik never uses the term “NFT,” he does devote significant attention to POAPs, or proof of attendance protocol, a technology that is built using NFTs. He writes:

“For a long time, I have been bullish on blockchain identity but bearish on blockchain identity platforms. […]An Ethereum-based Twitter alternative (eg. Farcaster) could use POAPs and other proofs of on-chain activity to create a “verification” feature that does not require conventional KYC, allowing anons to participate. Such platforms could create rooms that are gated to members of a particular community – or hybrid approaches where only community members can speak but anyone can listen. The equivalent of Twitter polls could be limited to particular communities.Equally importantly, there are much more pedestrian applications that are relevant to simply helping people make a living: verification through attestations can make it easier for people to prove that they are trustworthy to get rent, employment or loans.”

Read Vitalik’s full blog.

3. “There’s the signal and the noise. In crypto, 99% of it was noise. But there’s real value and signal there. […] Now crypto will get its act together.” — Mark Cuban

One of the most vocal proponents of crypto’s technological potential has been Mark Cuban, the founder of Lazy.com. In a recent interview on Jon Stewart’s podcast, Mark explained that crypto’s future is bright and the collapse of FTX, 3AC and Luna could be the catalyst for crypto to get its act together.

Listen to the full interview on The Problem with Jon Stewart.

What are your predictions for NFTs in 2023? Send us your thoughts and we might feature them in a future newsletter.

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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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