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NFT Market In Disarray After Azuki’s Troubled Launch

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While the crypto industry struggles with regulatory issues, the NFT sector has been shaken by the recent Azuki event, which had far-reaching effects.

One of the most hyped and largest NFT offerings, the “Elementals” series, was released this week by the Los Angeles-based startup.

But much to the dismay of the enthusiasts, the 20,000 Elementals looked incredibly similar to the original collection, despite being less expensive.

Some users have even questioned the Azuki NFT’s value and exclusivity. According to a Dapperdar expert Leticia Mello, this caused a dramatic decline of 34% on the next day when Elementals minted it.

In an email statement, Mello wrote that the “lack of differentiation leaves the community feeling misled, which is hurting community trust, which is critical to the success of any project in the blockchain and unique digital collectible space.”

Following the uproar, Azuki’s official Twitter account acknowledged that it had not done a good enough job of articulating and carrying out its “ambitious goals,” which had “confused the community on the tangible differences with the original Azuki collection.”

It’s always both challenging & exciting opening up the gate to the Garden. This time, we missed the mark. ..Azuki’s vision is to build a decentralized brand. Doing so requires great communication and execution, both of which were lacking with the Elementals sale. We know that we lost a piece of trust today, but nothing gets us more motivated to make things right.

June Marks The Lowest NFT Sales Volume

As per recent stats, the Azuki event caused the NFT market to decline substantially once more over the last 24 hours. Well-known projects MAYC plunged 20% and below 30 ETH, while BAYC dropped 16%.

In the most recent year, the non-fungible market’s total market value decreased by 53% to 3.33 million ETH. In addition, June had the lowest sales volume for Ethereum-based NFTs on the top marketplace OpenSea thus far this year.

According to data from Dune Analytics, the monthly sales volume of Ethereum [ETH] and Polygon [MATIC]-based NFTs on OpenSea concluded the second quarter [Q2] at its lowest level since the year’s beginning.

Nevertheless, data from Dune Analytics showed that their NFTs sales count increased by 82% throughout the month. Still, a 23% gap in sales count remained throughout the quarter.

NFTs Sales Keep Surging By 13% In November Value Despite The Market Crash

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Non-fungible tokens (NFTs) sales increased 13.2% in value from October, despite the fact that cryptocurrency prices fell precipitously in November as a result of the collapse of the Bahamas-based crypto exchange FTX.

According to the NFT aggregation site CryptoSlam, sales in November exceeded $532 million, compared to $460 million in October. However, individual transactions were down 18.75% in November.

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Source: CryptoSlam

Additionally, the data shows that the average sale jumped from roughly $95.20 last month to $134.12 in November and remarkably to $173.90 at the beginning of the current month.

Out of the $532 million in NFT sales, $443.55 million was for Ethereum-based NFTs, while the remaining amounts are split between Solana ($68 million) and ImmutableX ($20 million).

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Source: CryptoSlam

The Ethereum-based NFT collection with the greatest sales over the last month was Bored Ape Yacht Club, which brought in $64,907,645 over the past 30 days and rose by an astounding 97.52%. Additionally, the Mutant Ape Yacht Club (MAYC) NFTs brought in $29.14 million, an increase of 83.22%, and Otherdeed around $24,182,503, up by about 60%.

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Source: CryptoSlam

Bored Ape Yacht Cub NFTs November Significant Sale

Even in the depths of the cryptocurrency winter in November, specific Bored Apes creations were fetching high prices. On November 23rd, an NFT from Yuga Labs’ renowned Bored Ape Yacht Club (BAYC) collection was sold for 800 ether, or about $950,000.

Deepak Thapliydal sold BAYC #232 to fictitious NFT collector Keungz, who, based on their OpenSea profile, appears to own a number of Yuga Labs NFTs. Additionally, following the sale of BAYC #232 on November 24th, BAYC #1268 was sold for 780 ETH, or about $940,000 at the time of sale, between two undisclosed wallets.

However, the NFTs sold much over the collection’s current floor price, which has been declining over the previous few months, making these sales noteworthy in the month.

Moreover, according to the latest update by LedgerInsights, owners of Bored Ape Yacht Cub NFTs or the sister brand Mutant Apes will be able to purchase rare one-of-a-kind watches and digital twin NFTs from The Timex watch company.

Nevertheless, the BAYC NFTs’ loose intellectual property rights, which include granting the NFT holder the freedom to exploit their NFT commercially, make this sort of service viable.

With modifications to the case, strap, and etchings, only 500 unique watches will be produced following the NFT owners’ design. Many Bored Ape members and web3 company Daz3D collaborated.

Related Reading | Coinbase Decry Apple’s Ban On NFT Transfers

SEC takes on NFTs: Yuga Labs under investigation

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Non-Fungible Tokens are now not in the best condition. There has been a noticeable decline in NFT sales on various NFT markets, notably OpenSea, indicating that the enthusiasm surrounding the technology has worn off. However, as evidenced by the SEC’s probe into Yuga Labs, the attention surrounding NFTs doesn’t seem to be abating.

Yuga Labs, the company behind Bored Ape Yacht Club (BAYC), is under investigation by the US Securities and Exchange Commission (SEC), according to Bloomberg. The goal of the investigation is to determine whether the Non-Fungible Tokens collection from the Bored Ape Yacht Club broke any federal laws.

BAYC NFTs categorized as securities?

According to the information provided by the person with knowledge of the situation, the SEC is considering whether any of the NFTs offered by Yuga Labs are comparable to securities and whether they need to adhere to the same regulations.

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BAYC NFTs

The SEC is also investigating the manner in which ApeCoin was given to members of the Bored Ape Yacht Club and related NFTs. The investigation has not yet been made public, and it does not establish any wrongdoing on the part of Yuga Labs.

Yuga Labs stated,

“It’s well-known that policymakers and regulators have sought to learn more about the novel world of web3. We hope to partner with the rest of the industry and regulators to define and shape the burgeoning ecosystem.” “As a leader in the space, Yuga is committed to fully cooperating with any inquiries along the way.”

The SEC is also investigating the potential that a security-like property exists in ApeCoin. In addition to giving the holders APE, BAYC gave them a say in their DAO.

The regulators are now paying more attention to digital assets, crypto companies, and the overall crypto sector. It is a part of ongoing efforts to make sure that crypto businesses and the entire market abide by the rules.

BAYC NFT Was Dethroned by CryptoPunk After Almost 6 Months

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For a fleeting, brilliant instant The Bored Ape Yacht Club (BAYC) was flipped by the CryptoPunks on Sunday morning, marking the first time since March that the seasoned NFT collection’s floor price exceeded that of the primates that are so wanted by celebrities.

The Bored Apes swiftly reclaimed the top slot, which they’ve essentially held the entire year, similar to the last brief flip. Nevertheless, since June, CryptoPunks has been gaining ground on the Bored Ape Yacht Club, and if the current pattern holds, CryptoPunks may soon recover the lead—and keep it.

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BAYC NFT Was Dethroned by CryptoPunk After Almost 6 Months 6

The competition between BAYC and CryptoPunk

In June 2017, Canadian software developers John Watkinson and Matt Hall of Larva Labs developed the CryptoPunks. The ERC-721 standard and other notable collections, such as the Bored Ape Yacht Club, which debuted in April 2021, are commonly recognized as having been inspired by the collection of non-fungible tokens (NFTs) on the Ethereum blockchain.

Celebrities were instantly drawn to The Apes, and owning one became a mark of A-List status. By year’s end, the CryptoPunks’ floor price for a BAYC NFT had been reversed, and they held the top spot for practically all of 2022.

In April, as the game’s creator Yuga Labs prepared to introduce its Otherside metaverse, BAYC prices reached all-time highs, with a $429,000-floor price.

The much-discussed rivalry is primarily symbolic, of course, as Bored Ape developer Yuga Labs now controls both collections after purchasing the rights to the CryptoPunks in March.

Furthermore, the most recent flip was not caused by growing CryptoPunks values. Everything fell apart due to the bear market in cryptocurrencies.

According to NFT Price Floor, both Apes and Punks have actually lost value in the last 30 days. When measured in USD, Apes are just depreciating faster, falling 28% vs 16% for Punks.

Nevertheless, CryptoPunks have gained some traction. To manage the collection, Yuga Labs lured Noah Davis away from Christie’s in June. Earlier this month, holders of CryptoPunks were formally given commercial rights to the collection.

Gordon Goner, Co-founder of BAYC Warns Users of a Potential Social Media Attack

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The pseudonymous co-founder of Yuga Labs and BAYC Gordon Goner, issued a warning concerning a potential upcoming attack on their social media accounts under the Yuga Labs umbrella after obtaining “reliable information” that an insider from Twitter would assist in bypassing the accounts’ protection.

Yuga Labs, which is home to some of the most popular nonfungible tokens (NFTs) such as the Bored Ape Yacht Club (BAYC) and Otherside, straight away sought Twitter for security after learning about a planned attack on its social media accounts.

BAYC is not new to attacks

Following the community’s warning, Twitter management began aggressively monitoring the accounts’ actions as well as strengthening their existing security.

Goner also advised investors that the company would never undertake surprise mints, a typical strategy used by attackers to draw in victims while delivering the proactive warning.

Yuga Labs’ NFT offerings’ popularity and consumer demand resulted in the unintentional emergence of ape-themed scams. Attackers gained access to Yuga Labs’ BAYC and OtherSide Discord groups on June 5 and stole over 145 Ether (ETH).

The attack was carried out via hacking into the Discord account of Boris Vagner, Yuga Labs’ community and social manager, according to blockchain detective OKHotshot.

After falling victim to a vulnerability in its market maker’s smart contract, the Optimism layer-2 scaling solution lost 20 million OP tokens.

One million tokens worth around $1.3 million were sold, and one million tokens worth approximately $730,000 were sent to Vitalik Buterin’s Ethereum address on Optimism. The 18 million tokens that are left are inactive and can be sold or utilized to influence governance choices.

The Twitter staff took the warning seriously and began monitoring activity to ensure that the accounts were safe. There would be no surprise mints, Gorner warned the BAYC community repeatedly. One of the most prevalent ways for scammers to steal from consumers’ money is through phony mint news and phishing URLs embedded in the fake news.

BAYC & OtherSide Discords Breached; Estimated Loss Of $360K

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Some of NFT’s biggest names- Bored Ape Yacht Club or BAYC & OtherSide discords servers were compromised, leading to a loss of around 200 ETH or $360000 in total. Yuga Labs, the creator firm behind the projects confirmed the exploit via Twitter adding that it is actively investigating the incident.

It all started when the project’s community manager, Boris Vagner‘s Discord account got hacked. The bad actor took advantage of the breached profile and posted phishing links in both the official BAYC and its related metaverse project called Otherside’s Discord channels.

According to reports, the hacker managed to take away 32 NFTs including one Bored Ape, two Mutant Apes, and five Otherside Deeds.

Hackers have targeted Discord Inc. groups in order to get users to click on malicious links. Previously covered by TronWeekly, on May 25, 2020, a Moonbirds NFT owner lost 29 of these Ethereum-based tokens in phishing fraud.

The stolen NFTs were valued at roughly $1.5 million. But the most recent high-profile case of impersonation fraud has been that of Mike Winkelmann, better known as Beeple, a digital artist and popular NFT developer whose Twitter account was hacked by scammers to post a phishing scam.

BAYC hack detailed analysis

Co-founder of Yuga Labs Gorden Goner tweeted that “We took accountability with our tweet from BAYC. We are directly working with those impacted.” He then blamed instant messaging platform Discord saying it was time for a “better platform that puts security first”.

In response, a user ask him to stop blaming Discord and accused the team of being complacent, as “this could have been prevented”.

Some vented out their frustration by calling the exploit “Ponzi of the century”.

One Twitter user wrote– ” Probably a rogue team member or a team member didn’t have 2FA [ Two-factor authentication] enabled and got phished or hacked individually. the entire team from mods and up should be required 2FA by default though, especially in the BAYC server.”

Another commented in the replies that 2FA can easily be bypassed and is somewhat pointless on Discord. That being said, one can check OxRebels’s post-mortem technical report detailing how the 2FA Discord Announcements Bot might help minimize the repeat of such attacks.

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Yuga Labs Otherside Metaverse Sales Cause a Surge in ETH Gas Fees

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While the Yuga Labs and BAYC community saw the world’s largest nonfungible token (NFT) mint, Ethereum gas costs skyrocketed, and users experienced failed transactions owing to network delays.

Yuga Labs, the company behind the Bored Ape Yacht Club, has begun selling Otherdeed nonfungible tokens, which represent digital land titles, on its latest initiative, the Otherside metaverse.

Yuga Labs made $319 million when 55,000 NFTs sold out almost instantaneously, with each piece of land selling for 305 ApeCoin (APE), or roughly $5,800 at the time of the sale.

While Otherdeed NFTs were exclusively available in APE, they did require Ether (ETH) for gas costs.

Yuga Labs’ minting mechanics envisaged the selling of NFTs in stages, anticipating a brief increase in gas costs, which would subsequently slow down the number of people minting the NFTs:

“This pattern of mint → bump limit → mint → bump limit will continue until NFT supply is exhausted. This approach is expected to prevent an apocalyptic gas war, while also encouraging as broad a distribution as possible.”

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Yuga Labs Otherside Metaverse Sales Cause a Surge in ETH Gas Fees 9

Yuga Labs witnessed a gas unlike never before

Users witnessed gas fees unlike ever before which also affected their ETH holdings in the surge to own a plot of Otherside Metaverse. According to Etherscan statistics, several users paid gas fees ranging from 2.6 ETH ($6500) to 5 ETH ($14000).

Yuga Labs noted, citing some of the challenges with using Ether during its NFT launch:

“We’re sorry for turning off the lights on Ethereum for a while. It seems abundantly clear that ApeCoin will need to migrate to its own chain in order to properly scale.”

Yuga Labs has offered to return the gas value to customers who have lost their ETH holdings in gas owing to unsuccessful transactions.

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Yuga Labs Otherside Metaverse Sales Cause a Surge in ETH Gas Fees 10

Due to the inflow of ecosystems hosted on the blockchain, particularly NFTs, Ethereum’s famed gas costs have been a long-standing source of anxiety within the community.

To reduce the overall transaction call data gas cost across the ETH network, Ethereum co-founder Vitalik Buterin suggested a new block-wide restriction on total transaction call data in November 2021.

While the community accepted the idea, implementing EIP-4488 on Geth’s Ethereum-sidechain testnet took almost four months. Qi Zhou, a member of the community, verified the news on Wednesday.

BAYC Instagram Comes To A Halt After A $1M Exploit: More Details

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Bored Ape Yacht Club or BAYC came under attack by a malicious actor who stole NFTs worth millions of dollars after compromising the official Instagram account of the acclaimed NFT collection. Sources revealed that hacker/s employed a phishing link that transferred tokens out of users’ crypto wallets.

Disclosing via Twitter in the early hours of 25th April, the platform announced by saying, “The hacker posted a fraudulent link to a copycat of the BAYC website with a fake Airdrop, where users were prompted to sign a ‘safe transfer from’ transaction. This transferred their assets to the scammer’s wallet.”

A screenshot shared by one Twitter user depicted an OpenSea page of the hacker’s account receiving more than a dozen NFTs from the Bored Ape, Mutant Ape, and Bored Ape Kennel Club projects — all likely stolen from users who connected their wallets after clicking on the phishing link.

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As of now, the profile page tied to the hacker’s wallet address was no longer visible on OpenSea. Head of communications at OpenSea Allie Mack confirmed that the hacker’s account had been blacklisted from the platform.

BAYC Hack is more complicated than it seems

Due to the decentralized nature of NFT, the contents of the hacker’s wallet can still be viewed on other platforms like in Rarible, the wallet had 134 NFTs, among them four Bored Apes made by Yuga Labs, the creators of BAYC such as Mutant Apes and Bored Ape Kennel Club.

Still, it remains a mystery how the hacker was able to hijack the project’s Instagram account. As per a statement posted on Twitter, Yuga Labs said that two-factor authentication was active at the time of the attack and that the security of the Instagram account followed best practices.

Yuga Labs also said that the team was actively working to establish contact with affected users.

That said, it is generally advised that holders of NFT should never connect their wallets to an unknown or untrusted third party.

Seeing that the phishing link was sent via the official BAYC social media account, made the victims believe that it was legitimate and thus were tricked into clicking the fraudulent link,

BAYC Metaverse ‘Otherside’ set to debut on April 30

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Acclaimed NFT collection BAYC’s highly anticipated metaverse “Otherside” launched date has finally arrived. As per the announcement, the upcoming project is set to go live on 30 April at 12 pm ET. The platform has linked its Discord channel encouraging people to join and has raked in roughly 140k members as of now.

At the time of writing, 31,294 of them were trying to get into the Discord. Sources revealed a long waiting line for several hours, all attempting to clear the bot verification test and gain entry.

For the uninitiated, the Otherside was conceived by Yuga Labs, who happens to be the creators behind the popular BAYC collection. According to the team, the Otherside will be an open metaverse RPG compatible with all kinds of NFTs.

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There were widespread speculations in the NFT space since Yuga Labs dropped the teaser in March. The ad also took everyone by surprise as some felt there was more than met the eye.

Otherside’s Slick Commercial revealed several famous NFT characters

In the 1 and a half minute ad, aptly titled “See you on the other side”, a Bored Ape comes across a tempting drink. As he gulped down the bottle, the startled ape soon saw a whole new world unfolding before his eyes. Seconds later, bobbing along to an iconic rock song by “The Doors”, several well-known NFT projects popped up in the teaser.

This includes the famous Cool Cats, Mutant Ape Yacht Club, World of Women, CryptoPunks, and Meebits NFTs. One can’t help but speculate if these NFTs were in some kind of partnership deals with BAYC on the Otherside.

At present, there’s not much info in the official Discord channel about the metaverse drop. Also, there isn’t any official website yet. However, the team said it will disclose more details later this week.

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As per a leaked pitch deck last month, the BAYC creators will release 200k plots of virtual lands on the Otherside for sale. Eventually, these land plots form the essential parts of the meta RPG where each plot will come with its own unique attributes such as natural resources, artifacts, and rare characters.

Sources also revealed the price of each plot would start from 1 ETH. It needs to be seen whether the Otherside would match exactly like the one described in the pitch deck.

OpenSea in troubled waters; faces 3 lawsuits over stolen BAYC NFTs

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OpenSea’s trouble woes continued to pile up after a year rife with hacks and scams that have already played havoc on the world’s largest NFT platform. As per sources, the Nft marketplace is now facing three separate lawsuits from plaintiffs who lost access to their Bored Ape Yacht Club NFTs.

Texas native Timmy McKimmy and Michael Valise of New York both claimed to have lost Bored Apes in a hack that exploited a known security vulnerability in OpenSea’s code. The third plaintiff Robert Armijo, of Nevada, said he lost his NFTs in a social engineering attack which he blamed was caused due to the platform’s negligence.

As per court filings, McKimmy also failed to get compensation for the lost assets despite numerous requests with the platform though OpenSea allegedly told him that it was “actively investigating” the issue.

OpenSea Has Prioritized Growth over Consumer Safety- Court filings

According to the court documents, Armijo suggested a certain website and the user sent him a link to it, claiming that they had already uploaded their NFTs. As he clicked the link, his wallet containing his two Mutant Apes and his Bored Ape, along with some cryptocurrency, was drained off.

Armijo then attempted to contact OpenSea to freeze his assets, But he reportedly encountered numerous obstructions. “Mr. Armijo tried to find a phone number to contact the customer service, but no such number exists,” read the court documents. He next went to OpenSea’s Discord server.”

There too, Armijo didn’t receive any responses. As this critical window of time closed, the plaintiff found his stolen Bored Ape was listed on OpenSea and sold off two hours after the hack.

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Armijo accused the platform’s delayed reply who took 4 hours to respond to Armijo’s help tickets and froze his Mutant Apes. But that could not do any good, as the hacker already listed the Mutant Apes on LooksRare, where they were sold almost immediately. Frustrated, Armijo is now suing LooksRare as well.

“OpenSea has prioritized growth over consumer safety and the security of consumer’s digital assets,” the complaint reads.

The complaint cited the example of an approval process that OpenSea used to have, which required that NFTs be verified before upload by their proper owner. The process was discontinued in March 2021, since then thefts became rampant, it alleged.