Azuki, one of the more popular NFT groups, has seen its value drop by nearly 75% in just a few days. The reason is on the part of the founder, who suspects many of his involvement in the scams.
Until a few days ago, the NFT Azuki kit was one of the most expensive and coveted kits in the market. On May 3, 2022, the lowest price for NFTs was more than $88,000, according to data from specialist website NFT Floor Price. But on May 11, 2022, just one week later, that price dropped to $21,376, which is a 75% drop in value.
This is news that turns the entire NFT ecosystem upside down. Azuki’s price drop is partly due to the current issues with Bitcoin. But it is especially emphasized by the fact that Zagabondthe founder of the project, is accused of defrauding users of the previous three NFT projects.
NFTs, for non-fungible tokens (or non-fungible tokens in French), use blockchain technology to enter information. They act in a way like certificates of authenticity, which allowed artists to create a virtual art market, which breaks records and attracts many collectors and capitalists. But NFTs are not without risks: between extremely volatile prices, and various disputes over copyright and its energy consumption, tokens are often used by fraudsters to set up scams.
It’s through a blog post with a modest title” construction journey Azuki’s problems started. Zagabond, the author of the publication and founder of the Azuki group, explains that this group is not his first attempt at the world of NFTs. In particular, he wrote that NFT’s previous three projects, CryptoPhunks, CryptoZunks, and Tendies, had all been failures, but had helped him grow.
But rather than inspire sympathy, what he says in these lines has angered readers: The three projects Zagabond mentioned could have been abandoned by the teams overnight, with no warning or refund. For some, these projects will be “pull the rug”, that is, tricks. “Rug pull” is a term used to refer to cryptocurrency scams, when content creators leave funds provided by investors, or when a site shuts down without notifying anyone.
‘Pull the rug’ is not rare in the crypto world: they represented 37% of all crypto scam revenue in 2021 ‘,” according to Cryptoast, and they regularly make headlines in trade magazines. But even then, Zagabond had slipped through the loopholes, simply because he launched projects anonymously, under another name.
How long do NFTs live?
The founder denied the fraud accusations, stating that ” The projects did not find their purpose And he wasn’t pulling the rug. But soon after the post was published, Azuki’s prices fell, and they haven’t been able to recover since. Despite apologies and assurances that he did not try to deceive the users of his previous projects, doubts remain about Zagabond’s intentions.
Azuki’s history also opens up the debate about the longevity of NFT projects. Tokens are registered in the blockchain, and therefore are meant to be eternal. In the Twitter space hosted after his post was published, Zagabond criticized that “ Customers expect teams and developers to continue working on Vitam ad aernam projects “.But from what moment can a collection left aside by its creators be considered a scam rather than desertion?
The fall is as unexpected as it is impressive. Before the case was opened, Azuki was among the most well-known NFT groups, even described as ” succession From Bored Ape Yacht Club and CryptoPunk. Does Zagabond’s story mark the end of the adventure? At the moment, nothing is certain: despite the impressive drop in the price of NFTs, many investors are buying the tokens cheaply, hoping to be able to sell them again soon.
On the discord assigned to the project, the owners in no way hide their discontent, with messages announcing the “death” of the project, or asking for compensation. Others opted for the joke, explaining that they would now invest in the cryptocurrency LUNA or UST – two other projects that are having a lot of difficulty at the moment.