Letter 6 - Super Yetis
Letter 6 - Super Yetis
Why I dislike this project, and why I aped in anyway
I promise you that I have more to talk about than freaking animal NFTs. I have a bunch of interesting content planned that I’d like to delve into but it seems like every day there’s a new hot project that warrants immediate discussion, and so the other topics continue to get pushed down the priority list. I’d also like to cover projects that I haven’t invested in, but oh well.
So what are SuperYetis? You guessed it:
SuperYetis are 3D interactive characters randomized through a secret algorithm to ensure everyone gets a cute AF SuperYeti.
SuperYeti NFTs are created through a standard ERC-721 contract backed by IPFS file storage and registered on the Ethereum Blockchain. Guaranteed to outlast us all!
Another day, another generative NFT project. This one actually launched within an hour of the Gutter Cat Gang from the other night and shortly beforehand I wrote this twitter thread on why I was buying into cats but not Yetis. Three days later I bought 18 Yetis. Let’s look at what I didn’t like about the project initially, what changed, and why I ended up buying into it.
Initial red flags
First up was the mint size and price. At 10,000 mints and a price of 0.10 ETH the project was looking to raise 1,000 ETH (~$2,500,000). That is a lot of money, even for NFTs… I think? I need to do a deep dive on how much money is flowing into this space because I sorta never cease to be amazed by how things like this continue to sell out. But just to compare to some recent projects - the BAYC sold 10,000 mints at 0.08 and GutterCats sold 3,000 mints at 0.07.
They gave away 500 yetis for free at the beginning as part of a promotion. I initially thought this was a terrible idea and I am still a bit on the fence, but it might have been a good move. They essentially got 500 community members invested in ensuring the project sold out and was a success. Genius. It’s worth noting that only 700 people signed up for this promotion so the overall demand for Yetis and eyes on the project appeared quite low.
Another 300 yetis were reserved for the team. For promotions and giveaways right? Nope, just for their pockets. Another 240 were locked for promotions, giveaways and charity. Another 100 were allocated towards OG community members. For those keeping count, out of the 10,000 yeti supply, 1,140 or 11.4% would be essentially given away for free. I don’t love the idea of buying into something with this much “free’ supply out there.
Another red flag to my mind is that they talk a big game but have very little to show for it. From their website:
The Game
The Yetiverse is a multiplayer, play-to-earn game where SuperYetis own land, breed and compete with one another to protect the Yetiverse. Proceeds from the sale will be used to begin development on the game incorporating the NFTs sold, to incorporate community input. *Set to release early 2022.
and
Who’s on the team?
We are a team of 5: Creator, blockchain developer, full-stack developer, 2 moderators. We additionally are contracting with a 3D designer and illustrator. At the moment we are hiring: game developers, game designers, more 3d artists and marketing and community professionals.
They claim to be releasing the Yetiverse in 8-10 months and they haven’t even hired game developers yet. The team is very small. I am not an expert in game/software development but just based on some of the other NFT projects attempting similar things (Voxies, EmbserSword, Guild of Guardians, Zed Run, to name a few) I think their claim of releasing early next year is at best insanely optimistic and naive and at worst outright misleading.
On top of this they weren’t “revealing” anyone’s Yeti until a week after their sale launch date. This is not unheard of in the NFT space but I personally don’t like it from a buyer’s perspective. From the perspective of maximising hype and FOMO though it’s, again, pretty genius. I was getting some serious Apymon vibes with the combination of a delayed reveal + promise of a future game with nothing to show for it.
So my thinking at the time was that buying at the initial launch (is ILO a thing yet? Initial Launch Offering?) was a bad idea and I would stay away, but that I would watch the project closely to keep an eye on how it was selling, community sentiment, and if any of the project fundamentals changed.
What changed and why did I buy yetis?
Honestly… not a lot changed with respect to the fundamentals. All those red flags were still there, and I even identified another one: there was a 10% fee attached to secondary market sales (on top of the 2.5% that OpenSea takes). This is high. Let’s compare it to some other projects:
A few points about this graph. The three projects at the low end are all running on Polygon/Matic - a layer two solution on top of the ethereum blockchain designed to effectively eliminate gas costs. This seems like an excellent idea for projects that require a lot of transactions such as creating and running a full Yetiverse.
The other project at the high end is Voxies who are well on their way to creating what the Yetis are claiming they want to - a full game/universe built out of their NFTs. Arguably this is the most direct comparison to what the yetis are attempting and so the 10% fee of Yetis doesn’t seem too unreasonable side by side. But it’s worth noting that Voxies has already been in development for TWO YEARS and they are open to reevaluating their fee.
There was a lot of backlash against the Yetis for the 10% fee pre and post-launch and they are standing firm on it - their rationale being that it incentivizes loyalty and creates a strong community + dissaudes people from re-selling. I think it just increases the price people re-sell at and puts more money in the pockets of the SuperYeti team. The idea of having it at 10% to create a strong community is basically laughable when you consider what is undeniably the strongest NFT community project in recent memory - the Bored Ape Yacht Club (BAYC). Their fee is a quarter of what the Yetis are charging at only 2.5%.
You’ll notice I put Apymon: Revolution in there. After the rug pull fiasco that happened 10 days ago (jesus was it really only 10 days? crypto time is bonkers), the community rallied and they rebranded the project. They elected to add a 7.5% commission on sales in order to help raise funds (it was previously 0 likely out of ineptitude of the original devs).
Alright back to Yetis. Sales started slow and steady and continued slow and steady for the first two days. On day three I noticed that everyone was starting to talk about these damn Yetis. Some bigger names on twitter were tweeting about them. Every discord community had people asking about them. Sales were pumping. They were going viral and the FOMO was real. I was getting hit by it and I feel as though I am all but a seasoned vet in the NFT space.
Just because you don’t like a project doesn’t mean you can’t make money on it. I smelled an opportunity. Slight digression: there is an ethical minefield to navigate when you’re in my position - investing in NFTs while also trying to write objectively about them. As hard as I tried to be neutral there’s no denying that there was a positive bias towards both Apes and Cats in my prior letters. However, that bias was there for a reason, and it’s the same reason I invested in the first place - I believed in the projects. One thing I hate with a passion is people who buy into a project and blindly shill without researching it, or worse, those who research and think the project is a sham but promote it anyway to pump their own bags. Worse yet is people that are gifted bags and then blindly shill. I won’t do this. If I think a project smells funny I will not invest and usually just ignore it, or if it seems particularly nefarious I might write about why I dislike them. This is a special case where I invested and am now telling the world why I think the project stinks. I value my readers and will always try and be a straight shooter.
So this all begs the question - if I really don’t like the project, why did I buy into it? Plain and simple: I saw what was happening in the market and saw that there were a lot of people rushing to buy in and that there would be a lot of people that missed out and want to buy on the secondary market. In fact, even before they sold out, people were already paying 30% more on secondary. Why? Because the site didn’t work on mobile and people saw that they were selling out fast and wanted in. Crazy.
I bought 18 yetis and have already sold 10 of them at a significant markup, getting close to recouping my total initial investment. The price seems to be rising even more and I predict prices will be at their peak just before the reveal. In hindsight I should have waited until then before selling any, but I just felt so icky about being in this project that I wanted to get close to freerolling it as soon as possible.
I suspect a lot of people are drawn in by the gambling/reveal aspect.
Everyone loves a gamble. Everyone wants to get that 1% Apex. However, 84% of the time you’re just getting a basic yeti and I suspect the price of these Prime Yetis will plummet below what the price for an unrevealed yeti currently is and there’s a very good chance they will drop below mint cost very quickly. There will certainly be a large premium placed on the rare Yetis, but I don’t think that premium will justify the risk/cost of holding on to or buying an unrevealed one.
My plan is to sell another 4 the day before the reveal. Why not all 8 I have left you ask? In case I’m wrong. In case the market is even more insane than I think it is. By selling 4 I will have already guaranteed a decent profit, and I won’t mind taking a bit more of a risk on the project. There is also the mental game aspect to consider - if these Yetis do take off and go to the moon, I would be feeling pretty bad having sold all 18 before the reveal. I’m willing to pay what I consider is a premium in price to save myself some potential future anguish and regret. In strictly expected-value terms I think selling everything before the reveal is the correct play. Lastly, I am not above enjoying a small gamble, especially with ‘house money’ :)
I might be wrong. I sort of hope I am because if I’m not, a lot of people are going to get burned on this project. All eyes are going to be on the team after the reveal to see if they can actually create the Yetiverse ecosystem which they have promised.
Something good about the Yeti project
Credit where credit is due - the Yeti project has committed to giving 5% back to charity:
Who are the nonprofits you are donating to?
We are donating 10 ETH to 5 local grassroots organizations fighting human trafficking in Nepal and India. All transactions will be transparently shared with you.
They have already done their first donation to New Light India:
Regardless of how this project turns out or what I think of it, we should recognise that they’re doing a good thing here and us as individuals or future NFT projects can all stand to do a bit more to help out the less fortunate in the world.
What’s on my radar?
This is a new section I’m adding to the end of my newsletters as I’ve been asked by a lot of people how they can know about drops that are coming up. I find out by spending most of my day on twitter and in various discord channels. That isn’t feasible for everyone, so I will try and post about a few of the projects on my radar at the end of my letters. Please always DYOR (do your own research) and do not construe my posting about a project to be me endorsing it. These are just the things I hear about coming up, and may or may not invest in.
Dreamloops by BitLectro Labs - Dreamloops are a programmatically generated series of audio-visual non-fungible tokens (NFTs) created by Keil Corcoran of the band STRFKR. These look cool (and sound cool!) and the concept of giving out a physical cassette/vinyl to some people is fun.
Sidenote but I attended my first metaverse party last night hosted by this team in CryptoVoxels. It was cool! I need to write about all the various metaverses at some point too… boy one thing is for sure, I am never starved for content with this newsletter.
NFTheos - These insanely cute teddy bears are dropping on OpenSea very soon (roughly 60 minutes after this letter goes out). The drop price is 0.01 and the secondary sale floor is close to 0.2 so there is all-but guaranteed instant profit to be made if you can snag one. Only 200 dropping and the demand is high so there’s sure to be a gas war, and I am only adding to it by publishing this letter before the drop. Sorry fellow collectors, but my readers come first!
70s Pop Series Two on ArtBlocks - The ArtBlocks platform is deserving of its own letter, or two, or more. They must have some of the most talented generative artists in the world releasing content. I’m a big fan of Rev Dan Catt’s work and so I will be checking out this series.
HashGarage - Cool looking car NFTs with a potential future game and perpetual royalties baked in. I need to do more research - they’re promising a lot of things I am not sure they can deliver on, but I am intrigued at the least.
Voxies - This has been on my radar for a while and came up again as I was researching this letter. Very cool, lots of potential, seems to have a great team behind it. Will do a deep dive on this at some point.
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We’re still early.
Disclaimer: The content covered in this newsletter is not to be considered as investment advice. I’m not a financial adviser. These are only my own opinions and ideas. You should always consult with a professional/licensed financial adviser before trading or investing in any cryptocurrency related product.