More focus on ZOMBIE & EULER

Proposals Brainstorming
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In hindisight I think one of the best aspects of the NFTX launch was that it included giving NFTX tokens in exchange for NFTs, instead of just farming.

Imo, having a large supply of cryptopunks and autoglyphs in our treasury is currently our second biggest moat (after our community). It will be very difficult for new entrants to amass enough liquidity for cryptopunks and autoglyphs to compete with NFTX, and this has bought us the necessary time needed to complete v2.

While it’s true that we are moving towards an improved economic model in v2 which adds better incentives for LPs and focuses more on floor funds with 100+ items, I do still think there are some unique cases where it makes sense for NFTX to focus on high value collections with fewer than 100 items. Although this may not be scalable in general, I think it is scalable if our DAO participates in supplying liquidity.

As many of you may know, we are currently planning on renaming PUNK to PUNKX, and PUNK-BASIC to PUNK. The reason for this is that people appear to be more interested in PUNK-BASIC and it goes well with MASK and GLYPH which are also floor funds and do not have the “-BASIC” suffix.

I propose that we also rename PUNK-ZOMBIE to just ZOMBIE, and that we try to accumulate more zombie cryptopunks to increase the supply of this fund. I think ZOMBIE is a token that many investors would want exposure to as it represent one of the highest value NFT subsets.

I also propose that we create a EULER fund and try accumulating some genesis euler beats. There are only 27 in total but if we could even get just 3 that would be enough to bootstrap a fund I think—and it is certainly the sort of fund people would want exposure to.

With those changes we would then have: PUNK, MASK, GLYPH, ZOMBIE, EULER, which would be a pretty stellar lineup of difficult-to-compete with funds.

I also think we should rename AVASTR-BASIC to just AVASTR, and I am hopeful that it will end up being a popular fund, but doesn’t seem to have as much interest at the moment.

I have sort of given up hope on KITTY, JOY, and AXIE. There are 50k generation zero kitties and it’s a bitch to trade them because of fees. Joys don’t seem to have established a long term moat yet (although they have appreciated), and most investors appear to prefer buying AXS to get exposure to axies (e.g. $PLAY added AXS to their index). These NFTs (kitties, joys, axis) will certainly have value and likely be good investments, but I don’t see them achieving the same mega-status that cryptopunks, autoglyphs, or euler beats are occupying atm.

Assuming people generally like this idea, the next step would be for us to put out bounties just like I did in December with the community raise. Best thing to do is to put a very low bounty price and just wait until NFTX appreciates enough to make the bounty attractive to resellers. For example, the floor on EulerBeats right now is about 400 ETH and the price of NFTX is about 0.12 ETH, so the price of a EulerBeat in NFTX would be about 3300 NFTX, so we could set 3 bounties for 2000 NFTX each, and then after NFTX appreciates about 60% it will create an opportunity for someone to buy a floor EulerBeat off of open sea and deposit it into our treasury for the reward.

Thoughts?

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I’m all for increasing the DAO’s exposure to high-end NFTs, particularly Zombies. The current spread between PUNK-ZOMBIE (256 ETH on Sushi) and LarvaLabs Floor (430 ETH) is quite large, and it’s impossible to arb up due to the lack of liquidity in the pool. On that note, I do wonder how much liquidity would actually be needed to allow for practical arbing without significant slippage for high-end items. Since arbing is the main source by which NFTX funds track and maintain their price, higher end vaults are trickier.

The low ZOMBIE-fund valuation is also causing the $PUNK (PUNKx) fund to lag behind in price appreciation because it is comprised of ZOMBIES. A plus of this initiative would be that D2 funds would also benefit and more accurately reflect the market price.

One open issue I see though is that these funds, if added as liquidity, would need significant ETH-side liquidity as well to really become ‘functional’. The original raise had equal parts ETH and NFT’s to account for this.

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Interesting about how large that spread is right now, and agree that’s not ideal. If we had at least 2 or 3 PUNK-ZOMBIE in the liquidity pool then it would be more feasible to buy a full one.

There are a number of solutions for this problem. One of my favourites is the idea to allow people to include fractions of zombies from other platforms into the PUNK-ZOMBIE fund as a way to arb smaller amounts.

I guess the main question is whether we should first fix the economics of high-value/low-quantity funds, or whether it’s better to focus on accumulating first and worry about fixing economics after.

Intuitively I feel like the problem is fixable, and that by accumulating more zombie cryptopunks we are moving in the right direction. We have a lot of NFTX in our treasury and zombies and euler beats are pretty solid investments. But no need for us to rush a decision either with everything else going on at the moment.

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I’d agree that it makes sense to first acquire the items then focus on fixing the funds. I have also been thinking fractionalized versions of premium NFTs would make sense. This hybrid approach to D2s is what I think makes the most sense long term: a mix of floor funds + fractionalized high-priced items. When it comes to the topic at hand, I think having NFTX bounties out for high-quality NFT’s is an excellent way to make NFTX continue to have one of the strongest NFT treasuries out there. We could even have constant rotating NFTX bounties/menus with items the DAO wants to acquire.

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