My biggest NFT sale yet!
Happy Monday!
The story of the weekend was the BAYC Otherside mint.
55,000 plots of land up for grabs, 60,000 eligible wallets (including me!), cap of 2 per wallet.
With an unprecedented amount of hype, the gas war was inevitable. But unfortunately I still underestimated how much gas would be & only had 1.35 ETH on hand.
Transactions to mint 2 were costing 2.5+ ETH & as the supply dwindled further & further, it was clear I wouldn’t be able to mint at all. So I replaced the 2-mint transaction with a transaction to mint 1 instead. By only minting 1, I’d be using fewer *units* of gas & be able to afford a higher price per unit of gas (gwei), & thus have a better chance of the transaction going through.
(If you haven’t learned how to replace a pending transaction before, you set a “custom nonce” at higher gwei for the transaction to replace it in MetaMask - can put together a tutorial if there’s interest!)
It meant giving up on minting 2 (& accepting being left with a bag of $APE), but having the chance to mint 1 (& hoping profits here would cover the loss on $APE).
As it turned out, that was an incredibly smart decision.
The transaction went through & we minted 1 for a total cost of 3.5 ETH (2.1 ETH in APE + 1.35 ETH in gas).
The floor on secondary opened at 15 ETH, averaged 6 ETH during mint (artificially low due to the ongoing gas war), & hit a high of around 8.5 ETH pre-reveal.
Here we had a choice: sell at 6 ETH pre-reveal for about a 90% gain, or risk the floor crashing post-reveal but get a 10-15% chance of getting a piece of land with a Koda or other rare attribute.
I decided to hold through reveal. My rationale was a) landing a truly rare Otherside land could be life-changing money, & b) even if the floor fell post-reveal, I was ok holding for the medium or long-term (& was bullish on this time-frame).
We ended up incredibly lucky with the reveal, landing this 98.5th percentile beauty.
We didn’t land 1 of the 10,000 Kodas (25-30 ETH floor), but with 4/4 resources & 1 of 120 artifact, that’s literally its only “fault”.
I listed it at 15 ETH, not expecting it to sell, but knowing I’d be pleased if it did. And amazingly, sell it did. 15 ETH.
My previous largest NFT sale was a Philosophical Fox for 3.3 ETH. This one was nearly 5x.
Extremely grateful & incredibly lucky.
How does Otherside affect the NFT ecosystem?
There have been several criticisms of how Yuga Labs handled the Otherside mint:
People like this who gamed the system for thousands of mints
Yuga had planned the mint as a Dutch auction, but even after announced they abandoning the Dutch auction format, they kept the same Dutch auction smart contract, which was less well-optimized for a fixed price mint
Not capping at 1 / wallet which would have prevented a gas war & resulted in a wider distribution
The gas war seeming to be all part of a plan to build their own L1
Obviously the common theme is the gas war. In total, minters spent $300M on gas, half of which get burnt, (plus the $300M in APE earned by Yuga gets locked up for a year) so lots of people complained about “money leaving the NFT ecosystem”.
However, as I tweeted, we shouldn’t think in zero-sum terms. Complaining about ETH leaving the ecosystem via gas is short-sighted & misses the bigger picture. Burnt ETH decreases the circulating supply of ETH & makes everyone else’s ETH worth more.
Plus, Otherside also brought a ton of attention & interest to NFTs. It was the most hyped NFT event yet, & delivered, despite gas war hiccups. The art is great, rarity is complex & well-thought-out, Otherside is breaking records in secondary volume. Yuga Labs is showing the world NFTs are not dead.
I haven’t even mentioned anything about the future of what Otherside is building. If their vision plays out, I think we’ll view web3 in hindsight as pre-Otherside & post-Otherside.
The metaverse battles are kicking off.
Web3 native version like Otherside, the centralized web2 version from Meta, & the decentralized OM (Open Metaverse) being pioneered by Punk6529. I have no clue what the Otherside floor will be 3 & 12 months from now, but this is the start of somethig big.
Plays
A 15 ETH sale obviously gives us a decent amount of liquidity to deploy.
Here’s what I’ve done with it so far:
Bought back our $X2Y2 position twice-over (2 ETH buy) at 16 cents. It’s now staked again, & since X2Y2 turned marketplace fees back on, the APR is a solid 250%. Higher APR than LooksRare & though less market share, we’re buying at 1/10th the valuation.
Sent some to Blockfolio (FTX) who pay 8% interest on your first $10k in crypto
Converting some back to UST & depositing Anchor (had had to withdraw initially to get liquidity for the mint).
Entered the raffles for CPG Club’s upcoming Pop drop (needed 3 ETH in my wallet to enter). With a 25 ETH floor on the original collection, highly recommend entering both this raffle & this one.
Several other plays are also on my radar which I’ll likely make & share later this week.
That’s all for today!
—Luke