While I'm not necessarily a fashion guru, there are certain occasions when it’s appropriate to step up your game. The official Inflation Gala takes place all quarter and everyone is invited, from the crypto punks, to the normies, and the wall street bets crowd. This is my second time writing about inflation in this column but this time, I have the Consumer Price Index (CPI) from the US Bureau of Labor Statistics to prove that everything is really fucking expensive right now. So, convert your shitcoins to $BTC before they go Luna. 👀 My apologies for the brief moment in publishing, I was trying to collect my own coins and re-strategize on what’s next for the Summer 2022.
How Can A Stable Coin Be So Unstable?
Last month, $UST, a stable coin that’s suppose to be pegged against the dollar, completely crashed the entire crypto economy, and the TerraLuna blockchain, the entity in charge of $UST, quickly lost billions in a scandalous curve mismanaged curve pool. Rumor has it, it was because whale investors dumped their $UST coins, which means they sold their coins from something else which caused a major destabilization of the market. What will I wear to this momentous occasion in modern finance history? Red of course! Keep reading, it's about to get really weird.
A Red Dress, Because The Crypto Charts Are Bloody
According to the latest CPI numbers, we are officially experiencing 8 percent inflation. The ecosystem for crypto is constantly changing and more builders are entering the space to create this wave of mass adoption for the everyday person. However, the tumultuous market does not have any remorse on the newbies and in a crypto bear market, when it rains, it pours. Now that we know the dress code, let’s get straight to the dinner conversation, shall we?
First it was the NFT market
Over the last few weeks, I’ve observed the NFT market’s slow decline in activity on Etherscan and on Crypto Twitter. My timeline lacked Twitter Spaces launch parties, people were mostly shilling $APE coin even though Coinbase finally launched their much-anticipated NFT platform. Then Yuga Labs, creators of Bored Ape Yacht Club (BAYC), announced the release of The Otherside, a 55,000+ piece Metaverse collection that caused the Ethereum blockchain to crash due to the influx of activity and $7K per transaction gas fees. Some degen even tried to sell me a “Thug Bird” for three $SOL at a dinner party hosted by a close friend associated with FTX. The WSJ even published a scathing hit piece about a 92 percent decline of NFT sales in a week.
While this activity can be alarming, the ecosystem is currently undergoing a spring cleaning. It’s getting rid of all the ridiculous project ideas and forcing builders to optimize and create products that serve the community’s needs. This may seem optimistic. You may be reading this like, “I knew NFTs were a scam!” However, in the past few months, a lot of people entered the space purely for economic gains without understanding the technology or even market cycles. If decentralization means that all markets should discover themselves, then they also have to correct themselves without regulation.
For example, NFTs are digital assets that naturally create liquidity pools for anyone who buys into the token. In order to maintain a liquidity pool’s healthy value, people have to be able to enter and exit as they please. If there is a barrier to enter the NFT community’s liquidity pool, I believe there’s going to be a problem with maintaining its value in the long run that goes far beyond the powers of a blockchain. Moreover, I think the blockchain will catch these flaws.
In the case of Bored Ape Yacht Club, when Yuga Labs decided to release The Otherside NFT Metaverse land plots with special pre-sale privileges to their community and anyone who was holding $APE tokens, it segregated a lot of newbies. If you didn’t buy or claim $APE tokens weeks before this launch, you had a small chance of minting land. People were so pissed, BAYC NFT investors and Crypto Twitter started flipping out. What started out as a community built on conviction, had quickly become a bloodbath for clout. Hungry crypto investors wanted in just so they could flip it and make a quick profit.
Going back to my point about how markets should correct themselves without regulation, how can the value of something consistently rise with the market tide, when there’s an unequal distribution of token allocation dispersed to token holders who already own a large percentage of the liquidity? Meanwhile, the number of blockchain operators have not increased, the data of each Ethereum block hasn’t increased in size, and there’s still the same 60 mins in an hour. Yet the demand of this one brand and community is rapidly increasing.
I digress, this is disequilibrium at its peak finest. In Web3, the excessive demand of NFTs has caused the market to crash. At the end of The Otherside minting campaign, Yuga Labs was forced to refund over $100M in failed transaction fees when people were not able to mint Metaverse land plots due to the influx of traffic on chain and not enough actual miners to help them. People were so pissed, key investors or holders of the community started offloading their Yuga Labs NFTs below their market value. I’d rather be in a predicament of market spillover, than operate in a state of lack and desperation.
Hot DAO Summer Part 2 Mirror XYZ
As we move into a “Hot DAO Summer,” Web3 communities should consciously focus on establishing a healthy work relationship design process and what it means to truly have a work-life balance. I’ve chosen to share my personal stories as a creator, entrepreneur, and now a core contributor for web3 startup as a case study. We can learn a lot about what will make DAO contributors leaders with thriving communities.
Read and collect my first writing NFT on mirror.xyz here.
Read the first DAO article here.
Violet Verse Coming Soon
Change is coming to Crypto in the City’s infrastructure. We will be merging with The Violet Verse to create a fully on-chain and Web3 experience. We are moving to an entire new platform and will be on chain and in the metaverse by July 2022 if I have to sell my purses and NFTs to make this deadline. I’m so excited to share more news with you very soon as we rally a team of degen advisors and contributors. We have some awesome new blockchain partners and advisors ready to take this to the next level! 🔥 In the meantime, keep hodling your tokens and NFTs.
The Violet Verse is a content marketplace and lifestyle platform for creators and by creators. Members can engage with our platform through consuming (articles, videos, audio, etc) and collecting NFTs, experiencing our VR space, or submitting content to be featured. The community consists of Web3 enthusiasts and newbies, with educational and cultural workshops and events.
*Nothing in this newsletter is financial advice. Please do your own research.