Azuki, one of the most popular NFT collections around, saw its value plummet nearly 75% in just a few days. The reason is to be found on the side of the founder, whom many suspect of having participated in scams.
Until a few days ago, NFT Azuki’s collection was one of the most expensive and sought after on the market. On May 3, 2022, the floor price of NFTs was over $88,000, according to data from the specialized site NFT Floor Price. But on May 11, 2022, just a week later, that price has dropped to $21,376, a 75% drop in value.
This is news that is turning the entire NFT ecosystem upside down. The drop in Azuki prices is partly due to the current problems with bitcoin. But it is especially accentuated by the fact that Zagabondthe founder of the project, is accused of scamming users of these 3 previous NFT projects.
NFTs, for non fungible tokens (or non-exchangeable tokens in French), use blockchain technology to enter information. They act in a way as certificates of authenticity, which has allowed artists to create a virtual art market, which breaks records and which attracts a lot of collectors and capital. But NFTs are not without risks: between very volatile prices, and various controversies about copyrights and their energy consumption, tokens are also often used by scammers to set up scams.
Crypto scams?
It is with a humbly titled blog post “ a builder’s journey Azuki’s troubles began. Zagabond, the author of the publication and the founder of the Azuki collection, explains that this collection is not his first attempt in the world of NFTs. In particular, he writes that these three previous NFT projects, CryptoPhunks, CryptoZunks, and Tendies, were all failures, but they helped him grow.
But instead of inspiring compassion, what he says in these lines revolted the readers: the three projects that Zagabond mentions would have been abandoned overnight by the teams, without there having been any warning or refund. For some, these projects would be “rug pull”, that is to say scams. “Rug pull” a term used to refer to crypto scams, when creators leave with the money given by investors, or when a site closes without notifying anyone.
“Rug pulls” are not uncommon in the crypto world: they represented “ 37% of all cryptocurrency scam revenue in 2021 “, according to Cryptoast, and they regularly make the headlines of trade magazines. But until then, Zagabond had slipped through the cracks, simply because he launched the projects anonymously, under another name.
How long do NFTs live?
The founder denied the scam accusations, explaining that “ the projects had not found their target and it wasn’t a rug pull. But very soon after the post was published, Azuki prices went downhill, and they haven’t been able to recover since. Despite apologies and assurances that he had not sought to scam users of his previous projects, doubts persist about Zagabond’s intentions.
The history of the Azuki also opens the debate on the longevity of NFT projects. The tokens are registered on the blockchain, and therefore supposed to be eternal. In a Twitter Space hosted after his post was published, Zagabond criticized that “ customers expect teams and developers to continue working on ad vitam aeternam projects “. But from what moment can a collection left aside by its creators be considered a scam, and not an abandonment?
The fall is as unexpected as it is impressive. Before the case broke, Azuki was among the hottest NFT collections around, and was even described as ” Succession from Bored Ape Yacht Club and CryptoPunk. Does Zagabond’s story mark the end of the adventure? For now, nothing is certain: although the price of NFTs has dropped impressively, many investors are buying the tokens cheaply, hoping to be able to sell them again soon.
On the Discord dedicated to the project, the owners do not hide their dismay in any case, with messages announcing the “death” of the project, or asking for reimbursement. Others chose humor, explaining that they would now invest in the crypto LUNA or the stablecoin UST – two other projects in great difficulty at the moment.