Azuki Is Rebuilding After Its Elementals Mint Mishap

This week, anime-inspired NFT brand Azuki released a new collection of 20,000 NFT characters that look nearly indistinguishable from the original Azuki collection. The floor price of the project tanked and now Azuki is taking steps to correct its mistakes.

Meanwhile, digital collectibles company Candy Digital is merging with Palm NFT Studio, bringing together industry connections to expand licensed NFT projects across sports, entertainment, art and culture.

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This Week’s Alpha

Elemental L: This week, blue-chip NFT collection Azuki released the latest expansion to its Azuki universe. Called Elementals, the 20,000-edition NFT collection was teased to heavy fanfare and created a frenzy online when details about the mint were announced. Ten thousand NFTs had been airdropped to attendees at a Las Vegas event, while the other 10,000 were going to be sold via a Dutch auction with specific mint mechanics – Azuki holders were scheduled to have a 10-minute presale window, followed by a 10-minute presale window for holders of BEANZ, Azuki’s derivative companion project. The project sold out within 15 minutes, eliminating the need for a public sale. The mint appeared to be a success, and the project mint raked in $38 million. But the backlash from holders was swift, creating a downward spiral that quickly tanked the project’s floor price and contributed to a mass selloff of other Azuki collections:

• Minting mishap: Some Azuki holders complained that they experienced technical issues, and despite queuing up, were unable to mint any NFTs. Others were disappointed that Azuki holders were able to get a head start, essentially shrinking the pool of available NFTs. Co-founder Location TBA said that Azuki holders minted 7,600 NFTs, while BEANZ holders got to mint the remaining 2,400.

• Identical art: Holders were also upset that the Elementals artwork was virtually indiscernible from the original Azuki collection, fueling rumors of dilution through increased supply.

• Future plans: Azuki apologized and has outlined new ways it plans to revamp the Elementals project. Overall, the mint showed that NFT projects are struggling to innovate during the bear market, and their missteps have widespread consequences across the NFT market.

Sweet like candy: Candy Digital, a digital collectibles company backed by Michael Novogratz’ digital asset firm Galaxy Digital and entrepreneur Gary Vaynerchuk, has merged with Web3 production firm Palm NFT Studio, creating a powerhouse NFT creative studio under the Candy Digital name. Palm NFT Studio previously received funding from Microsoft’s venture fund M12 and Warner Bros.

• Creative license: The two firms will work together to create digital experiences for sports franchises like Major League Baseball, NASCAR and WWE, as well as entertainment giants such as Netflix and Warner Bros Discovery.

Blockchain beats: Global entertainment company Warner Music Group (WMG) is teaming up with Polygon Labs to launch a music accelerator program aimed at onboarding the next generation of musicians into Web3. According to a press release, the ideal applicants for the program are “companies and entrepreneurs operating at the intersection of music, technology and Web3.”

• Industry innovation: According to the press release, candidates should focus on “fostering artist-fan communities, establishing decentralized music production and distribution systems, innovating ticketing solutions, exploring music-related merchandise and digital/physical collectibles and integrating music with interactive technology and gaming.”

• Real rewards: The chosen projects will receive funding from both WMG and Polygon Labs and will also be eligible for mentorship and networking opportunities from experts across the music and blockchain industries.

Projects on the Rise

Who: Vera Molnár via Sotheby’s

What: Generative artist Vera Molnár, who is credited by many scholars as the first female digital artist, is releasing her first-and-only on-chain generative art project through art auction house Sotheby’s. Her work, which began integrating computer art in the 1960s, is regularly cited as an influence for modern generative artists such as Dmitri Cherniak and Tyler Hobbs. The 500-edition collection, formulated around three letters that have heavily influenced digital art, is a reflection of her career and how the practice has changed with the integration of NFTs.

How: The collection kicks off Sotheby’s Gen Art Program, which honors generative artwork and will highlight two to three artists per year. On July 26, the fully on-chain sale will be sold via a Dutch auction format for the first time in the art auction house’s 300-year history. Bids will begin at 20 ETH and will be incrementally reduced until the item is bought with one bid.

In Other News

• Crocodile sniping: Fashion brand Lacoste has expanded its UNDW3 NFT ecosystem to offer new rewards for active holders.

• Proof-of-work: Digital community platform Coordinape is rolling out a soulbound NFT that tracks a holder’s work history within digitally-native organizations.

• Bye-bye, MetaBirkins: A federal judge has permanently banned Mason Rothschild from using the MetaBirkin brand, closing out a lengthy court battle.

• ApeCoin DAO shuffle: ApeCoin DAO, made up of ApeCoin holders, has voted to replace Animoca Brands chairman Yat Siu and Reddit co-founder Alexis Ohanian on its Special Council, bringing in two new members.

Non-Fungible Toolkit

Artificial intelligence is the new buzzword across industries. Some have been quick to embrace the fast-developing technology, while others have been skeptical of – or even hostile toward – its uses.

Music is an area where AI can greatly enhance the speed at which artists can create, produce and publish music to their fans. AI-based tools like Warpsound and Riffusion are being used by artists to create new songs that can then be proliferated across Web3.

If you’re interested in music and want to know how blockchain technology and AI are intersecting in its creation, this overview is a great place to start.

DISCLOSURE

Learn more about Consensus 2024, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.