GM Seedphrsers 👋 Enter a world where digital art becomes a cultural phenomenon, and NFTs are a passport to an unknown world.

📓 Today’s Agenda:

• 🔥 Hot Headlines

• 🤯 NFT Market Overview

• 🖥️ Market Triggers

• 🎨 Sotheby’s Grail Auction

• 🏦 The Wild ParaSpace Story

🔥  HOT HEADLINES

📈 Market Headlines

• US inflation falls to 4.9%, lower than expectations - Read more

• Tether, the company behind USDT, announced a profit of $1.4B - Read more

🖼 NFTs

• The Broken Keys auction closes with winning bids ranging in price from 9 ETH to 31.69 ETH - Read more

• Memeland ecosystem NFT, ‘You The Real MVP’, sells for 57.5 ETH

• Elon tweets out Milady meme and the price EXPLODES from 3.3 ETH to over 7 ETH - Take a look

• NFT Fund investor, Spencer Gordon Sands, puts up a new $APE proposal in response to the Paraspace incident - Take a look

🤯 NFT OVERVIEW

Well, I think it’s safe to say we’re not in 2021 anymore…

The NFT market continues to trend in the wrong direction with daily NFT traders reaching new lows (less than 10k). On the bright side, there were some positive events for NFTs this week:

1. DeGods

   1. On Monday we found out DeGods was the 4th collection added to Blur’s Blend program

   2. Users can now purchase a DeGod for as little as 1 ETH

   3. The floor price on the collection rose about 10% from 8.2 ETH to 9.1 ETH

2. Pudgy Penguins

   1. Announced a $9M investment which we covered in more detail here

   2. The floor price rose from around 4.2 ETH to as high as 4.9 ETH

   3. This investment cements Pudgy’s status as a blue chip project

3. Milday

   1. Elon being Elon. Musk sent out a tweet of a Milady meme and it sent the price soaring over 7 ETH

   2. Did Elon know what he was doing? Nobody knows for sure but that didn’t stop people from buying

   3. This same thing happened with Punk 6529 meme cards where the price ran from 0.6 to 8 ETH and retraced all the way back

Look, we’re not going to lie to you. The NFT market feels dim right now. But it’s normally darkest before dawn. If we go back and ask people what crypto felt like in 2018 and 2019 I’d bet it felt something like this.

Seedphrase Take: The NFT market feels a bit like an echo chamber right now. The same people are doing the buying and selling and outside of major events, prices aren’t dramatically moving. This is either the best time to accumulate or the beginning of the end.

What do you think? Respond to this email and let us know where you think the future of the NFT market is headed!

🖥️ MARKET TRIGGERS

NFTs have been around for such a short amount of time which makes it tough to predict the future of the market. But that’s not going to stop us from trying!

Our team took to Reddit and found out what people think are the most likely events that could trigger an NFT bull run. Here are the most common answers:

• A crypto bull run

• Adoption of music and gaming NFTs

• Ticketing NFTs

• NFTs linked to real-world assets

• Influx of degenerate gamblers

One interesting takeaway from this list is an item that isn’t included: the financialization of NFTs.

Blur (and many others) are placing a heavy bet on NFTs being used as loans or being leveraged bets. The big problem here is that the underlying assets need to have value in order for this to make any sense.

A lot of the NFT market is built on speculation. We need NFTs that people WANT to own. This list provides a great start on NFTs that the everyday person sees value in.

🏦 A FUNDING EXPLOIT

This was a WILD story. Someone inside the ParaSpace core team intercepted the funds that the Crypto security firm, BlockSec, was sending back.

Let’s rewind…

ParaSpace is a platform that lets users stake their assets (both NFTs and ERC-20s). Most notably, users can stake their BAYC through ParaSpace.

On March 17th of this year, BlockSec first reported an attack on ParaSpace. They acted swiftly and intercepted the hacker and rescued 2,900 ETH ($5M). As a result, ParaSpace only lost 50 to 150 ETH. It could have been MUCH worse.

Here’s where it gets crazy…

The CEO of ParaSpace, Yubo, intercepted the funds being returned to the protocol from Blocksec. He returned a portion of the money, but $1.2M was still missing.

The rest of the team tried to get a hold of Yubo but couldn’t get in touch for 30 hours. At this point, the team had to let the community know that Yubo had gone rogue.

Obviously, users started pulling funds from ParaSpace and Yubo was forced to return the missing $1.2M.

At this point, the ParaSpace team has put out a whole statement of which the TLDR is:

“There have been no malicious acts from the team. All funds are safe from Yubo, the protocol is under the full control of the team, and we have the financial means to ensure the stability of the platform.”

Just when we thought NFTs were getting boring, we get this! Never a dull day in this world.

🎨 ART FOR SALE

It’s been just over a year since the infamous Do Kwon tweet that began the bear market we know now:

The crash of Terra Luna caused so many unpredictable collapses, one of which was the hedge fund Three Arrows Capital (3AC).

3AC was invested in more than just crypto too. They had one of the most insane collections of NFTs. And as a result of the bankruptcy filings, the NFTs are going to be auctioned off through Sotheby’s.

When: May 19th at 10 AM EST
Where: A live auction hosted by Sotheyby’s
What’s included: Fidenza 725 and 861 by Tyler Hobbs, Larva Labs' Autoglyph #187, Dmitri Cherniak’s Ringers #194 and #375, 0xDEAFBEEF's Series 1: Angular - Token 134, and Larva Labs' CryptoPunk #1326

These are some BIG-TIME NFT grails. Uncoincidentally, Sotheby’s is calling the auction “GRAILS: Property from an Iconic Digital Art Collection”.

That’s quite the spin zone for “3AC got liquidated and we’re forced to sell their cool jpegs”

Why it matters: It’s no secret the NFT market is struggling right now. Many are speculating that whales are waiting on the sideline with their ETH to see how this auction plays out.

Seedphrase Take: If we’re able to make it through this auction with NFTs going to close to fair market value, this could be a bullish sign for the NFT market. A positive sign leading into this auction is the ACK (AlphaCentauriKid) NFT sale making over $1.1M in revenue this week.

NFT art = bullish

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DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.