What Happened to Blue Chip NFTs? Azuki’s Price Drop & Its Impact to NFT Ecosystem

At the end of June 2023, the NFT market was shocked by a significant price drop from one of the blue chip NFTs, Azuki. This fall was caused by the launch of Azuki Elementals, a series that closely resembles the original Azuki (OG) to the point where discerning the difference becomes challenging for users. After the launch of Azuki Elementals, the Azuki OG price, which was previously stable at around 15 ETH, dropped to 9,7 ETH. Then, what is Azuki Elementals, and how does the Azuki price drop affect the NFT market? You can read the following article.

Article Summary

• 🖼️ Azuki Elementals is the latest NFT collection released by Chiru Labs, which previously launched the blue chip NFT, Azuki, in 2022.
• ⚡ The Azuki Elementals collection has 20,000 NFTs based on the four Azuki elements of earth, fire, lightning, and water. The collection includes various levels of rarity that will be revealed once minted.
• 😞 The similarity of Azuki Elementals to Azuki OG disappointed the Azuki community, resulting in a mass sale of both NFTs. It led to a drastic drop in the Azuki OG price.
• 🐵 The Azuki NFT price drop affected the prices of other blue chip NFT projects, such as BAYC and MACY, which dropped by more than 20% daily.

Overview of Azuki

Azuki is an NFT collection launched in January 2022 and became one of history’s most successful NFT releases. This NFT uses anime as its collection image with 10,000 collections.

At its release, 8,700 NFT collections were available on the OpenSea and LooksRare platforms. Whitelisted users minted the rest. Interestingly, the entire collection was sold out in just four minutes. Data from DappRadar, all of these sales reached a revenue of around 1.15 billion US dollars. It puts Azuki in 4th place, one of the biggest NFTs in the market.

Azuki NFT holders can access an exclusive online club, The Garden—a corner for artists, builders, and Web3 enthusiasts to develop the future of decentralized projects.

The success of an NFT project is closely tied to the role of the project community itself. A solid and dedicated community can be a key driver of an NFT project’s success. They help expand the project’s reach, provide financial support, and give feedback on its sustainability.

Therefore, to keep the trust and maintain engagement with its community, Azuki developed some exciting products. One of them is Azuki Elementals.

Read also: How to Choose an NFT Project?

Azuki Elementals

Azuki Elementals is an NFT released by Chiru Labs to expand the Azuki universe. The launch of Azuki Elementals is a highly anticipated event in the NFT world.

Chiru Labs aims to create characters consistent with their Azuki roots while offering something new in the form of elemental ideas.

The Azuki Elementals collection has 20,000 NFTs based on the four Azuki elements of earth, fire, lightning, and water. The collection includes various levels of rarity that will be revealed once they are minted.

On the launch day on Tuesday, June 27, 2023, Elementals were sold through Dutch Auction, and early access was available to Azuki OG and BEANZ NFT holders. The starting price opened at 2 ETH (approximately 3,800 US dollars); every five minutes, the price would drop by 0.1 ETH (around 187 US dollars).

The 10,000 available NFTs sold out within 15 minutes, generating a revenue of 38 million US dollars. Selected Azuki OG NFT holders received the remaining 10,000 NFTs as an airdrop.

The Azuki Price Fall

After the launch of NFT Elementals, the collection’s floor price started to drop. The Azuki community expressed dissatisfaction about the Azuki Elementals’ design on social media. The Azuki Elementals image shows a striking similarity to Azuki OG.

The two collections are considered to have similar attributes, such as colors, faces, and overall style. The similarity made NFT enthusiasts say Azuki Elementals is a ‘cheap’ version of Azuki OG.

As reported by Coindesk, Azuki OG’s NFT sales increased by almost 400% compared to the previous week. However, the price of Azuki OG dropped from 14 ETH to 9.7 ETH in one day. The floor price of Elementals also dropped by 55% as pre-sale buyers sold their collections massively.

After facing disappointment from the community, the Azuki team made a statement via its official Twitter to fix it immediately. In addition, the Azuki team also opened voting for NFT Elementals holders to change the background metadata of Azuki Elementals.

Following the disappointment, AzukiDAO, which calls itself the ‘Azuki OG holder,’ began taking legal action by working with legal counsel to sue Zagabond, the founder of Azuki.

AzukiDAO pressured Chiru Labs through Zagabond to return the profits from the Azuki Elementals launch. Zagabond told Cointelegraph that AzukiDAO is an “unknown group” that “does not appear to be legitimate.”

Impact of Azuki’s Price Drop on Other NFT Blue Chips

The recent Azuki incident had an effect not only on the Azuki NFT itself but also on other blue chips NFTs. It led to a significant drop in the price of NFTs.

The market sentiment reflected the increasing panic. Azuki’s significant price drop impacted other NFT projects, such as Bored Ape Yacht Club (BAYC), which dropped by 23% in the past week, with the floor price touching 28 ETH on July 3, 2023. Mutant Ape Yacht Club (MAYC) fell by 30% on the same date with a base price of 4.9 ETH.

Quoted from Cointelegraph, blue chip NFTs are NFTs that have high value and are considered prestigious in the NFT market. Blue chip NFTs have reputation, quality, and long-term value appreciation potential, like blue chip stocks in conventional finance.

The price drop of some blue chips NFTs also affected the volume of NFTs in some NFT marketplaces, such as Opensea, Blur, and Opensea Pro, which can be seen in the image above.

Read also: Blur, an NFT Marketplace for Professional Traders.

In addition, some NFT lending protocols also experienced significant TVL drops in a single day on July 4, 2023. Paraspace’s TVL plummeted 11% in the last 24 hours, BendDAO’s TVL fell 53%, and Blur Lending suffered a 26.7% drop.

Although blue chip NFT projects are often considered stable and resilient, there is no assurance that they won’t encounter price declines or challenges in the times ahead.

Market policies, industry trends, demand from collectors, sustainability of blockchain technology, and other factors also play a significant role in the overall future of NFTs.

Potential gains and risks are inherent in an evolving and fluctuating market like NFTs.

Is it Time to Buy Blue Chip NFTs?

If you are interested in short-term gains, the downturn in the NFT market can be an opportunity to buy NFT projects with solid fundamentals at a discounted price and then make profits when the potential market goes back up.

Some underlying NFT projects remain of good value and long-term potential during downturns. By doing proper research and analysis, you can find attractive projects and utilize the price drop as an opportunity to buy at a lower price.

You can profit from their investment if the NFT market recovers and prices rise. However, it is essential to note that investing in NFTs involves risks, and you should do careful research and consider other factors before making an investment decision.

References

1. NFTscan, Azuki Elemental: What went wrong? Medium, accessed 11 Juli 2023.
2. Letícia Melo, Azuki NFTs: All About The Brand’s Past, Present & Future, DappRadar, accessed 11 Juli 2023.
3. Gracy Chen, Could Azuki FUD be worrying for the future of NFT’s? Twitter, accessed 11 Juli 2023.
4. Cindy Tan, Kesuksesan Azuki Elementals $38 Juta Tidak Tercermin dalam Kinerja Pasar karena Harga Dasar Turun Di Bawah Harga Terbitan Dalam 24 Jam, Metaverse Post, accessed 11 Juli 2023.
5. Shaurya Malwa, Azuki NFT Prices Slide 44% After Creator Releases ‘Basically Identical’ Elementals, Coindesk, accessed 11 Juli 2023.