The art of FUD:

Why some NFT projects die while others flourish 🧵👇

(1/25) pic.twitter.com/dPXfTrzZcu

— wale.swoosh 🐳 (@waleswoosh) April 20, 2023

Everyone who has spent some time in the NFT space has experienced FUD at one time or another.

"FUD" stands for "fear, uncertainty & doubt" and basically is whenever individuals or a group are hating on a project.

(2/15) pic.twitter.com/rBemQM1HQ3

— wale.swoosh 🐳 (@waleswoosh) April 20, 2023

Therefore, one might think that FUD is always negative.

However, many founders have talked about FUD recently in a more welcoming way.

So can FUD also be a blessing? Why does it destroy some projects while others thrive?

Let’s look at three examples.

(3/25) https://t.co/sQ3qYaBVqY

— wale.swoosh 🐳 (@waleswoosh) April 20, 2023

1️⃣ Mekaverse

Mekaverse was one of the first really hyped NFT projects back in 2021.⁰⁰The mint was highly competitive at the time, with tens of thousands of people competing for the mint of one of the 8,888 Mekas.

(4/25) pic.twitter.com/fotXLPux7F

— wale.swoosh 🐳 (@waleswoosh) April 20, 2023

The floor price pre-reveal was standing at over 8 ETH.⁰⁰Everyone on NFT Twitter was talking about them, the hype was next level.⁰⁰Mekaverse was destined to become THE next bluechip NFT project.

(5/25) pic.twitter.com/5huvUyHeWp

— wale.swoosh 🐳 (@waleswoosh) April 20, 2023

But after the reveal, the first negative tweets started showing up:

People made fun of the art. And those tweets spread like wildfire.

The big attention, which was one of Mekaverse's USPs, became their demise.

(6/25) https://t.co/RO3cmVN9Dv

— wale.swoosh 🐳 (@waleswoosh) April 20, 2023

Pretty much everyone on NFT Twitter was dunking on them, a real FUD wave had developed.

Most of it didn’t come from a place of hate, but rather from a desire to get some engagement.

Today, the floor price of Mekaverse is standing at 0.16 ETH.

(7/25) pic.twitter.com/dfucrL8IhE

— wale.swoosh 🐳 (@waleswoosh) April 20, 2023

Lesson 1:

FUD brings engagement like nothing else. Holders will defend the project, non-holders will agree or share it for fun.

FUD has always been a part of NFT spaces and will be forever.

(8/25)

— wale.swoosh 🐳 (@waleswoosh) April 20, 2023

2️⃣ Moonbirds

Moonbirds was one of the most anticipated projects of the last bullmarket.

All-star team. Good art. Influential holders.

Within a few weeks, the floor price went up to 40 ETH.

(9/25) pic.twitter.com/yr7cONcIDw

— wale.swoosh 🐳 (@waleswoosh) April 20, 2023

And everything went well for a while.

Of course, the bear market didn't leave the Moonbirds unaffected, but nothing crazy happened.

At least not for the time being.

Until August 4th, when Moonbirds announced to change the IP rights and to go CC0.

(10/25) https://t.co/ePPOEiMO5f

— wale.swoosh 🐳 (@waleswoosh) April 20, 2023

The tldr to CC0 is that unlike Bored Apes for example, not the holders own the rights to the JPEG, but everyone.

It' a creative commons license. So you can theoretically take any Moonbird & make a derivative of it.

As you might guess, this caused a massive wave of FUD

(11/25) pic.twitter.com/Je7CQaYcj2

— wale.swoosh 🐳 (@waleswoosh) April 20, 2023

Kevin Rose, one of the co-founders, said in a townhall a few weeks later that the level of FUD was much higher than he expected.

The interesting thing: Not only was the FUD from non-holders big on Twitter, but it was also big in PROOF's holder-only Discord.

(12/25)

— wale.swoosh 🐳 (@waleswoosh) April 20, 2023

The amount of FUD & hatred that came from the holders themselves was unlike anything I had ever seen.

The FUD was not just towards the individual move, but turned into FUD towards the entire project and the team itself.

Some holders turned against the project.

(13/25) pic.twitter.com/AqlvYypBkO

— wale.swoosh 🐳 (@waleswoosh) April 20, 2023

Lesson 2:

FUD always originates in a mistake or an isolated bad move.

However, in most of the cases it spreads to the whole project and the whole team.

FUD knows no nuance.

(14/25)

— wale.swoosh 🐳 (@waleswoosh) April 20, 2023

3️⃣ Azuki

Azuki also experienced a period of massive FUD.

When news broke that Zagabond, one of the co-founders, had also founded two other projects before Azuki (Zunks & Phunks) a wave of FUD came over Azuki.

(15/25) https://t.co/oaRs1AIfiy

— wale.swoosh 🐳 (@waleswoosh) April 20, 2023

All over the timeline, there were tweets not only criticizing (which was justified), but downright wishing for Azuki's demise.

Schadenfreude, engagement farming, and a desire to eliminate a competitor.

The floor price dropped from 30 ETH to 6 ETH.

(16/25) pic.twitter.com/IX7L94yGbk

— wale.swoosh 🐳 (@waleswoosh) April 20, 2023

However, there was something different here. And that quickly became clear.

Because while some holders felt pushed to sell by the FUD wave, the core believers, the core community, stood behind Azuki and the team.

And this core community has not changed to this day.

(17/25) pic.twitter.com/wTZv1Dfezq

— wale.swoosh 🐳 (@waleswoosh) April 20, 2023

The team was massively attacked from the outside at that time.

But it was not only the team that was being vilified, but the Azuki holders as well.

Twitter became a gauntlet for anyone who had an Azuki pfp. This brought the holders closer together.

(18/25) https://t.co/W9MEswDMb4

— wale.swoosh 🐳 (@waleswoosh) April 20, 2023

Lesson 3:

FUD from outside can bring a community closer together and make it stronger in the long run.

However, only if the holders stand together as one and support the team unconditionally.

(19/25)

— wale.swoosh 🐳 (@waleswoosh) April 20, 2023

*️⃣ And this is perhaps the key difference:

Outside FUD can toughen a community.

When the anger and hatred come from the outside, it welds a community closer together and creates stronger bonds.

(20/25) pic.twitter.com/8nS1A2CSf6

— wale.swoosh 🐳 (@waleswoosh) April 20, 2023

FUD from non-holders is often based on engagement. On short term attention.

That's why FUD from outside is always temporary and will eventually look for a new victim once the attention is shifting.

(22/25) pic.twitter.com/Hwf8lsY9qM

— wale.swoosh 🐳 (@waleswoosh) April 20, 2023

So FUD is both good & bad, the ideal mix could look like this:

a) A constant low level of outside FUD, just enough to keep the project in the center of attention.

b) A core community without any FUD that stands united behind the team & against the "outside opponents".

(24/25) https://t.co/HuC2aoGpRJ

— wale.swoosh 🐳 (@waleswoosh) April 20, 2023

1/ #BTC is about to eat ETH's cake. 👀

First, lets look at the NFT space:@opensea was absolutely destroyed by @blur_io

From dominating the space, OpenSea turned into a minority player in a few months.

But more importantly, NFT trade volume collapsed – why?

A petite 🧵 pic.twitter.com/7UgWENG7nC

— Duo Nine ⚡ discord.gg/ycc (@DU09BTC) April 20, 2023

2/ April NFT volume is at an absolute low since January.

Money shifted elsewhere:

✅ Better returns in farming memecoins like #PEPE
✅ #Bitcoin inscriptions / ordinals / stamps are superior

An inscription on #BTC lives forever on its blockchain. NFTs however…

Next. 👇 pic.twitter.com/3tkFszNfwl

— Duo Nine ⚡ discord.gg/ycc (@DU09BTC) April 20, 2023

3/ #BTC total inscriptions passed 1 million.

It made an all-time high of 76k daily inscriptions on April 4th.

Adoption is fast-moving to the better blochchain: #Bitcoin

Say bye to #ETH DeFi with $100 in gas fees and welcome #BTC DeFi.

What, BTC DeFi?! Yes 👇 pic.twitter.com/vHiAlhH9FT

— Duo Nine ⚡ discord.gg/ycc (@DU09BTC) April 20, 2023

4/ Since the Taproot upgrade in November 2021, DeFi on BTC is not just possible, it's already here.

BTC now competes with ETH in the #NFT / #DeFi markets.

You don't have to ask me who wins this battle.

The best part?

You no longer need WBTC. You can use native BTC.

Next. 👇 pic.twitter.com/bVZLnUme9K

— Duo Nine ⚡ discord.gg/ycc (@DU09BTC) April 20, 2023

5/ BTC can now do:

✅ Smart Contracts
✅ NFTs (inscriptions)
✅ Stablecoins
✅ Yield Farming
✅ Decentralized Exchanges (DEX)

The caveat?

All this will happen on layer-2 scaling solutions and sidechains.

Think Arbitrum for Ethereum, but better (since #BTC is better).

Next 👇 pic.twitter.com/YCJWgbroWk

— Duo Nine ⚡ discord.gg/ycc (@DU09BTC) April 20, 2023

6/ #Bitcoin may be late to the #DeFi game, but with ETH charging $100 for a $100 swap, the future is bright.

NFTs are already crashing while BTC inscriptions make all-time highs.

It's only a matter of time before we see DeFi explode on top of native #BTC

Lastly 👇 pic.twitter.com/I0jkEr7cCm

— Duo Nine ⚡ discord.gg/ycc (@DU09BTC) April 20, 2023

1/5

One thing I've noticed on the VC side, is since Gensler has been hostile against crypto, nearly every non-crypto fintech I've seen fundraising has:

-Highlighted their international footprint
-Noted "US exposure" as a risk
-Discussed relocating HQ/leadership

— Adam Cochran (adamscochran.eth) (@adamscochran) April 19, 2023

2/5

Attacking innovation and failing to foster capital formation is not just an impact to crypto companies.

It creates a chilling effect across the entire industry where even licensed and regulated businesses wonder if they can be next.

— Adam Cochran (adamscochran.eth) (@adamscochran) April 19, 2023

3/5

In under 2 years, the startup funding space went from viewing a US nexus as a benefit for fintech startups, to listing it as an investment risk under their fundraising disclaimers.

That should be an absolute alarm bell for lawmakers.

— Adam Cochran (adamscochran.eth) (@adamscochran) April 19, 2023

4/5

That's not just about jobs and investments (although that's a huge part of it) but the US monopoly on payments infrastructure and finance is a large part of dollar sovereignty, and in turn the overall US economy and global power stance.

— Adam Cochran (adamscochran.eth) (@adamscochran) April 19, 2023

5/5

Gensler, in his inexperience both in securities law, and economics, is chipping blindly away at a pillar of the US economy for sake of his own ego-driven ambitions.

He's burned down decades of goodwill in just two years, and it will take a long time for the US to restore.

— Adam Cochran (adamscochran.eth) (@adamscochran) April 19, 2023

5 Charts on Ethereum Post-Withdraws:

1/ Who is withdrawing?

The majority of ETH withdraws thus far are going to individual validators, followed by Lido and several crypto exchanges: pic.twitter.com/tVY8sFZUVx

— Lucas Nuzzi (@LucasNuzzi) April 19, 2023

2/ Over 1 million ETH (~2 billion USD) have been withdrawn, but we estimate there is still 1.2 million ETH remaining.

That's a lot of ETH, but ETH markets have been surprisingly resilient in spite of the reintroduced supply. pic.twitter.com/W74giHSWId

— Lucas Nuzzi (@LucasNuzzi) April 19, 2023

3/ On the network side, it appears many validators forgot to update their nodes and some clients experienced bugs.

This led to an increase in missed blocks after the upgrade.

There were no big issues with network uptime, but it goes to show how tricky these updates are: pic.twitter.com/iqZrWqZO8R

— Lucas Nuzzi (@LucasNuzzi) April 19, 2023

4/ This also explains the sharp decrease in proposed blocks per day after the upgrade.

Block proposals are not quite back to normal levels yet, but they look a lot healthier: pic.twitter.com/ambhGe6mp5

— Lucas Nuzzi (@LucasNuzzi) April 19, 2023

5/ Arbitrageus had a big payday trading cbETH, which is Coinbase's liquid staking derivative.

Large redemptions led to wide spreads between ETH/cbETH and traders happily took advantage of that. pic.twitter.com/LOCabMd5PZ

— Lucas Nuzzi (@LucasNuzzi) April 19, 2023

1/ It's been 24 hours to reflect on Chair Gensler's absolute train wreck of an oversight hearing yesterday.

Schadenfreude is satisfying, but here's the substance of how ineffective, and out-of-touch the Biden admin's financial regulators are right now.

— Ryan Selkis 🪳 (@twobitidiot) April 19, 2023

2/ I've been saying (quite loudly) for two years that the Chair's "war on crypto" is about power, not policy. In particular, it's about placating his top (maybe only?) political booster: Sen Warren.

But when he is questioned by anyone other than spoon-feeding allies, he wilts.

— Ryan Selkis 🪳 (@twobitidiot) April 19, 2023

3/ Gensler has spent 40 years (!!!) in finance and as a second-career bureaucrat, yet he still wasn't ready for primetime. He was totally unprepared.

He shrank in his chair from the moment @patrickmchenry began asking simple questions.

— Ryan Selkis 🪳 (@twobitidiot) April 19, 2023

4/ Here are five utterly unacceptable answers from someone whose primary job is (ostensibly) to protect investors, keep markets fair & efficient, and promote capital formation.

I can't understate how embarrassing it was to watch these answers:

— Ryan Selkis 🪳 (@twobitidiot) April 19, 2023

5/ Is Ether a security or commodity?

It is embarrassing to watch a sitting "leader" of a major financial regulator completely whiff on a simple question. The money line "Chair Gensler, we spoke about this in private, this shouldn't be a surprise."https://t.co/lNtwU9Pa6e

— Ryan Selkis 🪳 (@twobitidiot) April 19, 2023

6/ The ongoing lies about the crypto industry's "non-compliance" and Gensler's repeated calls for the industry to "come in and register."

It's a complete farce. "Registration" with the SEC is intentionally impossible: https://t.co/6x0RCQedeb

— Ryan Selkis 🪳 (@twobitidiot) April 19, 2023

7/ Emmer takes Gensler to task on a) his favorable approach to FTX, b) the impossibly high costs of compliance, c) the lack of new rule-making for crypto combined with 55 enforcement actions, d) his rogue actions outside of Congressional authority.
https://t.co/xdyuvvBIM6

— Ryan Selkis 🪳 (@twobitidiot) April 19, 2023

8/ Gensler was unable to truthfully answer whether he had rehearsed "preapproved answers" with Senator Warren and her staff.

This was reminiscent of the TikTok hearing's infamous question on coordination with the CCP.
https://t.co/9fyH5nqoz1

— Ryan Selkis 🪳 (@twobitidiot) April 19, 2023

9/ Finally, most damning:

The rogue financial regulator touts his professorship on crypto at MIT and wants total oversight authority of the emerging field…

But has never owned the assets or used the tech.

No wonder the US is falling behind.https://t.co/f4rWPN5jUG

— Ryan Selkis 🪳 (@twobitidiot) April 19, 2023

10/ There will be more focus on Gensler's history with SBF, his failures as SEC Chair, and his corruption.

Gensler bet that he could use crypto as his political punching bag and become Treasury Secretary. It’s never happening.

He took a calculated risk…but he's bad at math.

— Ryan Selkis 🪳 (@twobitidiot) April 19, 2023