Posts Tagged

NFTs

Seth Green Lost His Bored Apes NFT

Elizabeth Technology June 16, 2022

And it’s kind of funny.

What is an NFT? And Why Do So Many People Hate Them?

An NFT is a non-fungible token. Essentially, it’s a unit of blockchain attached to something unique, like an image, as opposed to a blockchain coin, which is just a coin and can be exchanged with any other coin (fungibility). There are dozens upon dozens of people making really good arguments for why NFTs  shouldn’t exist and how their energy demands are ridiculous, but just know that every single layer of what an NFT is has some kind of tomfoolery going on within it.

Starting at the top: the art.

Art NFTs, which are non-fungible, can be any kind of art at all so long as it’s digital. Literally anything. Since the image isn’t actually stored on the blockchain (because there isn’t enough space for something hi-res) the blockchain is generally leading to a link to the image on the actual server where it’s stored (which is a whole other thing). Meaning you can link to huge impressive projects that someone may genuinely want to own an NFT of even though other people can see it, just because the project is that impressive. Like funding an art gallery IRL – the art inside is beautiful, and everyone who walks up knows you own it and you shared it with them.

Instead, we get bored apes and all sorts of other cookie-cutter Picrew dressup dolls with swappable details for easier selling, used mainly in Twitter avatars for clout. There’s also quite a bit of art theft going on, where people who published art online find their art later on NFT brokering websites and have to tell the staff that their picture was put up there illegitimately. It’s very annoying and difficult to combat, so much so that Deviantart created a tool for users to cross-check their art.

But Wait, There’s More

But the same doesn’t apply in reverse. Left-click-save people aren’t violating the rights of the purchaser or the creator unless they use that unedited image commercially. However, if someone does use it commercially, the creator has the right to legal action – not the buyer. Turns out, NFTs don’t confer copyright unless explicitly stated by the seller, so if you don’t clarify that you want to own that art and make stuff with it, you just don’t! The original creator of the NFT could double-sell the picture, and now there’s two Diamond Blunt-Smoking Bored Apes out there, and there’s nothing you can do except tweet about it. Generally speaking, an NFT is like a baseball card, in that you don’t own the art on the card or NFT just because you purchased it, and the original owner can pump out so many cards that the card you have is worthless. All of that blockchain does not prevent this from happening. A 2 where a 1 was earlier in the chain means those two diamond apes are technically different entities.

The blockchain is the whole point, too. Can you imagine someone buying a Bored Ape for an avatar and spending more than 20$ at most on it if it wasn’t blockchain? Much less thousands? They wouldn’t, that guy would have been laughed out of the room. Because him and other people like him successfully convinced people that the blockchain has inherent value, a bunch of people bought these blockchain collectibles for significantly more than anyone would have had it not been. To be clear, the blockchain is not inherently valuable no matter what product it’s representing. It’s a technology, not an investment in and of itself. Cryptocurrencies crash and burn all the time because investors lose their faith in the product’s value.

All this to say that the blockchain creates this illusion of exclusivity over an image when you don’t have exclusivity by default and the images used by the most popular NFTs are stock images with stock details that look like they’ve been run through an RNG. It’s a common joke that you can just left-click and save these images, and it’s funny because there’s really no rebuttal. If you don’t care about the blockchain, if the other person doesn’t have copyright ownership, and if you’re not using it for commercial reasons, why can’t you left-click and make the Bored Ape that guy owns your profile pic? Literally nothing is stopping you at that point except for respect. The image is not actually on the blockchain, most of the time – usually it’s a link.

I’m going to skip all of the stuff about electricity consumption and money laundering, but know that those are issues too.

Seth Green’s Bored Ape

There’s a lot of fraud in the industry. You can steal digital art and use it illegitimately, but most of the time you have some way to stop that from happening so long as you notice it’s happening – you can copyright strike on most websites that do art, for instance, and that will put the brakes on the art being used illegitimately. Unfortunately, the same is not necessarily true for NFTs. Not only do you not have the copyright by default (which is a huge, confusing mess to navigate when someone is using your lion on a T-shirt but you have to contact the Lazy Lions guy to actually get something done) but when you have a penumbra of the copyright, you still don’t have all of it!

Bored Ape owns the copyright to their apes, but they’re fairly generous with what users can do with said apes as long as they’re apes the user has bought, and not someone else’s apes or an ape that doesn’t exist yet. They seem to know that tightening the collar too much on copyright issues would make some of their buyers question why they had the ape at all, and as such give users a wide berth to do their own thing with it. It also acts as great free advertising. However. The issue with that system is that once you lose your ape, you can’t make things with your ape. That makes sense for legit sales but is a total nightmare for theft, which is what happened to Seth Green. Many NFT sites (and the NFTs themselves) don’t have any way of distinguishing a sale from a theft – they can only record that the token moved from one wallet to another on their chain. The non-famous and famous alike who bought these things and then clicked a scam link have no recourse but to publicly ask for the NFT back from the thief, or whoever bought it off the thief, which has mixed results and sometimes ends in a ransom to get the thing back. In Seth Green’s case, the new owner who bought it from the thief doesn’t want to give it back at all!

But wallets are secure, you may say. How could this have happened? Besides the whole Smart Contract issue (which is an entire article by itself, but is also discussed here: https://elixistechnology.com/?p=7187 ) humans are still humans, and can commit human errors.

 Phishing scams are a huge issue in the industry, for example. None of the websites being used have been around for longer than NFTs themselves have been, and the side of the industry that wants to get these tokens out there to begin accumulating worth are not on the same page as website developers, so they end up with these huge, ungainly URLs that are indistinguishable from phishing scam pages. Some of the projects aren’t even made by a team – one guy is generating the pictures, making the advertising happen, running events, etc. and also making the website. Those projects are as legit as any of them are, and some blow up because of one big buyer – if you can score a 10$ NFT that turns into a 400$, it’s worth buying from those janky sites. Unfortunately, this means that the fake sites and the real sites that haven’t gotten their feet under them look too similar for comfort, but big risk, big reward, right? Even if the site looks good, that doesn’t stop someone from abusing the URL thing from before to make an identical page that steals data. This is regulated by an outside force– but you have to get into contact with the website hosting service to keep people from domain squatting on similar names, which most don’t. This exact thing happened to the Neopets NFTs, which was run by a big, well known company called Solana. If Solana couldn’t keep it from happening, what shot do the small guys have?

Anyway, Seth was trying to mint an NFT from GutterCats, and he clicked a phishing link instead. He’s probably going to get his NFT back (even though the person who has it says they don’t plan to return it – I suspect that’s a bluff to get a ransom out of him), but until it happened to him, the possibility of this bizarre penumbra-of-copyright thing happening hadn’t been considered. Because he’s famous and his show will act as free advertising, I doubt the Bored Apes guys would throw a fit even if he didn’t get his token back. However, the other Twitter nobodies? Who knows what would have happened if one of them was tackling a project as ambitious as an animated show only for the rug to be pulled out from under them? There’s no safety rails! If this hadn’t happened to Seth, the issues this creates wouldn’t have been discussed at all. Theft of the image is not supposed to be theft of the copyright too! In a digital world, that’s completely nuts – even real, physical art doesn’t work that way!

Sources:

https://decrypt.co/101283/seth-green-nft-show-bored-ape-stolen

https://www.buzzfeednews.com/article/sarahemerson/seth-green-bored-ape-owner

RugPulls

Elizabeth Technology March 14, 2022

NFTs… are not doing so hot, reputation-wise.

The Classic RugPull

Believe it or not, when things are only worth as much as a group’s belief in them, not believing in those things makes them stop being worth anything. The first one to really hit pop-culture as a rugpull might have been SquidCoin, a cryptocurrency coin that hit the spotlight for being the worst possible understanding of Squid Games’s messaging about money and capitalism. SquidCoin grew in value, and a 45 degree line up is very attractive to new, inexperienced investors. Once the SquidCoin people made their money, they sold all of their stuff and left, leaving SquidCoin unsupported and the people who bought it with less money than they started with. The classic rugpull. It was a source of ridicule for people on the outside, who saw what had just happened with clear eyes – for people on the inside, it was easier to brush off this early warning and keep investing in crypto.

Ignoring the warning has not made the problem go away. Rugpulls continue to happen because NFTs and Crypto holds next to no actual liability or accountability for the owners. While thinking that internet creators should be allowed to stay anonymous is certainly good and pure-hearted, it’s also allowed the growth of a culture that shames people for, say, revealing information that was already public (https://www.vice.com/en/article/akvn5a/bored-apes-buzzfeed-and-the-battle-for-the-future-of-the-internet) and demanding to know where their money went. Anything less than total positivity and complete freedom for the creators of these projects is scorned. This is the sort of attitude that works for Banksy, not for financial institutions.

Doodled Dragonz

Doodled Dragonz is certainly one of the sourest rugpulls out there. Doodled Dragonz was an NFT project that promised to donate 100% of its profits to charities supporting critically endangered species (later choosing WWF instead), only to run off as soon as all the tokens were sold without making said donation. Abandoning a project doesn’t necessarily mean the NFTs generated by it are worthless (I think you can actually still buy other people’s Doodled Dragonz on SolSea), but it does mean the project’s not going to get any new support. If these become afflicted by link rot, they’ll just be gone forever. Besides, a market made purely of vibes isn’t going to support projects with no hype around them, which is ironic because these tokens are now actually scarce.

 In an NFT sense, that is.

Since you can still right-click/save.

Users who bought Doodled Dragonz now had a cheap NFT in their wallet that didn’t even contribute to the charities it promised it would.  

Later, they did the exact same thing under the alias of Balloonsville, a similar, cutesy project with balloons instead of dragons that also rugpulled. They then criticized the platform for letting this happen, which led to the platform (Magic Eden, for NFTs, which deals in SOL or Solana cryptocurrency) promising not to allow anonymous projects on said platform anymore. Again, anonymity is super cool, but it has a lot of potential for abuse when literally anyone can promise to sell things with no real consequences. Think about it – no other market lets things be so completely untraceable as crypto. Even places like Ali Express can be held accountable by their payment platforms! It’s hard to overstate just how little accountability crypto creators have right now.

At least this time, they allowed their buyers who bought the NFTs at first launch to get a refund if they sold for less than they bought it at as the original owner – the people who bought the tokens after the primary sale and tried to sell them again were illegible for the refund, though, so it still hurt a pretty good-sized chunk of people.

Literally named after the Guy

 MadoffCoin was clearly a scam from the get-go, but it promised it wasn’t. Does that mean anything, people wondered? In this totally anonymous, completely untraceable interaction, doesn’t a promise matter at all? The answer was no, although that was apparently only obvious to people outside the hype sphere. MadoffCoin rug-pulled almost immediately after starting up. The website’s been deactivated and the subreddit is close to dead. However, there’s a second MadoffCoin (spelled Madoff Coin this time) attempting to get started, promising that it’s designed to punish people who pull away from the project before everyone gets their investment back. For sure. Totally.

I’d hate to say that this wouldn’t work twice, because it has and continues to – the problem is that not everyone interested in crypto is fully informed of the risks by design. You don’t own the art you buy, and the coins are only expensive because of speculation. Even when they do understand it, their bluster often gets the best of them – a user on Tumblr compared what’s happening with MadoffCoin to Wile E. Coyote painting a tunnel himself and then running into it, insisting it’s still a real tunnel even as the Road Runner watches him make a fool of himself. As long as people keep ignoring warning signs and advocating for a lack of responsibility for the owners, this is going to continue to happen.

Sources:

https://www.vice.com/en/article/akvn5a/bored-apes-buzzfeed-and-the-battle-for-the-future-of-the-internet

https://web3isgoinggreat.com/?id=2022-02-06-2

Dune and Crypto Bros

Elizabeth Technology February 9, 2022

You might have seen a tweet circulating about a couple of people who bought the movie concept book for Dune, and seemed to think they’d just bought the IP.

Yikes.

The Culture Of NFTs

There’s a lot of confusion over what an NFT actually is. An NFT, or Non-Fungible Token, is a blockchain-backed token that can’t be exchanged for other tokens equally. For contrast, a bitcoin is worth one bitcoin, and the two can be exchanged without the owner noticing, the same way one dollar bill is exactly equal to another dollar bill. NFTs are different – they’re tied to a specific, unique item. That item can, right now, before regulation, be a huge number of things, but the market is flooded with art because the easily customized mass-produced pop-art NFTs are easy to make.

NFTs are valuable because they’re valuable. That is, if everyone decided they weren’t valuable, they wouldn’t be. NFTs are hardly unique by this measure, but because they’re shiny and new, they’re not being recognized for what they are, and the culture surrounding them actively works to prevent them from becoming better understood because that could lead to a market crash, and then all of the people at the top would be out their investment.

What Actually Happened

While it’s being reported that a bunch of dudes bought the design book with the idea that they owned the IP, that’s not quite true – or it’s not what the group is claiming happened.

Here are the facts: in an auction, crypto-group Spice DAO spent 266,000,000 pounds on a book that had been valued somewhere between 26,000 and 35,000 pounds by the auction site. They then tweeted this:

And while it looks like they thought they bought the IP itself, we don’t have a lot of evidence suggesting that’s the case.

See, this isn’t actually Dune – it’s a concept book for a movie that never happened, a film adaptation by Alejandro Jodorowsky. As it’s not the original Dune, only a handful of copies exist. They still waaaaay overpaid for it, but it isn’t just another copy of Dune like many people commentating on Twitter seem to think it is.

Secondly, in the tweet, they say they’d like to produce an original animated series inspired by the book – inspired. That’s a tricksy word used for tricksy things, but giving them the benefit of the doubt, it’s possible they understood they didn’t own the IP and really did just want inspiration for their own project, a sort of supplementary material guide for the stuff not seen in any existing Dune movie that could have been done better if it wasn’t restricted by the source materials. Of course, you can’t just rip off this book either, but it adds material.

Picture making a new Bond inspired movie with a concept book from someone else – the fresh perspective might be just enough to give you something like the Mission Impossible series, which, if not inspired by Bond, is definitely Bond adjacent. It’s possible this team is looking to make something Dune adjacent, not Dune itself, citing the words ‘inspired by’ in that tweet. Again, we don’t know exactly, but buying it for inspiration seems more plausible than buying it because they thought it was literally the copyright to the material.

You can’t just make a movie out of a book you bought, but there are levels between copyright infringement and original IP that may make this possible… if they do it right. 50 Shades of Gray was a Twilight fanfiction with a couple of tweaks to evade IP stealing, it’s not unbelievable that this group could do that with this movie concept book for Dune.

 Why they needed to spend 100x the asking price to do this, and then announce their plans without followup clarifying what they’re actually doing? It’s possible they wanted headlines, and knew this was an easy way to get that necessary attention. Regular marketing would have been significantly cheaper, but this is certainly interesting – it’s gotten a lot of eyes on it that otherwise wouldn’t have looked twice. It also shows just how much money they have to blow on their project, which attracts even more attention.

Bad Mashup

I doubt this would have been such a kerfuffle in the news if

A) They’d bought the book without that tweet,

B) they’d paid less money for it, and

C) the group wasn’t a crypto group.

NFTs are coming into the limelight as a poorly regulated and likely inflated market propped up by people who don’t understand what they’re buying, but it does sometimes work out for those people because the market is still so new. People on Twitter have discovered via Twitter that they don’t own the picture, they just own the token – and anybody can copy/save the picture off of the Twitter user’s profile image because there’s nothing stopping them, legally or technologically, from doing so. Everyone has access to the art, and the owner still retains all their copyright permissions – spending money on an NFT just means that you own a token of said art, and literally nothing else.

It’s not a giant leap to assume the crypto group SpiceDAO may be some of these people with a poor understanding of how NFTs work, and that saw this book, bought it, and assumed they owned it like so many NFT buyers think they own the art they just bought the NFT to. That’s a huge issue in the community, and it’s one that would be disadvantageous to solve. Until it is, and the market is propelled by more than just hype, though, NFTs are too volatile to trust.

Sources: https://www.christies.com/lot/lot-6345488

NeoPets NFTs

Elizabeth Technology December 1, 2021

Firstly, if you’re looking for a basic overall explanation, we have an article on NFTs: https://elixistechnology.com/?p=6511 and not much has changed since that article, except for more stuff entering the NFT market, including things by big corporate brands. For the simple explanation, know that NFT stands for “Non-Fungible Token”. Essentially, this is a token (usually representing art, but sometimes other things as well) that has blockchain technology attached to it, making it ‘unique’. Where Bitcoins and other forms of currency are fungible, these images are not. In an ideal NFT environment, only a limited number of copies (or even only one) of each image with blockchain attached exist, even though the image could be replicated digitally as many times as you want.

Realistically, if you don’t care about the blockchain, then the only thing preventing you from right-clicking on the NFT and saving it to your own device is that you probably just wouldn’t want to. Most popular NFT art just doesn’t look that much like art, a bizarre mishmash of modern cartoon art and pop-art made by people who are savvy with NFTs, not artists, and purchased by people who want in on the NFT craze, not people who like art. As a result, most of the NFT art circulating is weird, pixelated/zombified/pirate monkeys and other such easily mass-produced but theoretically still unique art. Good stuff is mixed in… but there are a lot of those monkeys. I could go on about NFT art, but I won’t, because Neopets (a browser game from the 2000s) had an NFT event go very poorly, and that’s much more tangible.

Neopets

Neopets is a browser game from the 2000s. The game lived quite a long life, aiming at primarily children and pre-teens with bright colors, small games, and highly customizable pets, the Neopets themselves. Neopets was one of the largest websites to exist in the 2000s, raking in billions of page views, only declining as the primary audience aged out. Surprisingly, though, the game itself still works, even after Flash was discontinued and everything on-site had to be converted away from it. Sure, some games broke in the process, and the website itself was always sort of buggy, but it’s remarkable that it’s still functional at all. It’s nearly 22 years old, having first arisen in 1999. In internet terms, that’s ancient.

Fan Sites

Of course, being so old, the website has gone through quite a bit. It’s buggy. As Polygon puts it in their article on the unconverted sprite black market (more on that later) when fans want something fixed, they do it themselves – the Neopets team has their hands tied by the website they’re forced to work with, so everything still running is running on essentially coded duct tape and prayers. Patch fixes by players don’t work for everyone, and general patches on a site as old as the Neopets site might genuinely take a full overhaul, bottom to top. The game just doesn’t have those resources. So, fans do the majority of the Neopets cataloguing. Fans make browser extensions that fix broken games and textures. Fans make fanpages for lore, for backstories, for each species, for every possible combination of items and accessories – fans do everything to make the Neopets site more than the 22-year-old jalopy it is. It’s understandably frustrating when the manufacturer decides to upsell this jalopy to outsiders without understanding a critical part of why anybody is even still using it.

The NFT – and Announcement

Anyway, the NFT announcement was a dumpster fire. The NFT team (which went by Neopets Metaverse mere weeks before Facebook rebranded) was partially created with another outsider team, and the team that keeps Neopets social media running wasn’t informed that this was happening. If they were, they weren’t given a date – pictures surfaced of the primary Neopets team’s Twitter account saying, cautiously, that the NFT twitter account may be a scam when asked. They later had to confirm that the NFT team’s twitter (and partnership) was legitimate… but it wasn’t a good look. To fans, it appeared that an outside team was pairing up with upper management for Neopets to make a quick buck, and they couldn’t even be bothered to coordinate something as simple as a company-wide announcement.

After that, things continued to decline. The announcement promised 20,500 algorithmically generated Neopets for sale. Neopets are highly customizable – you can change their hair, their colors, their species, their accessories – almost every aspect of a Neopet can be altered. If factored out for every possible combination, you’d end up with hundreds of thousands (if not millions) of possible Neopets combinations. NFT artists (especially the monkey and lion guys) commonly use templates as well, so this didn’t sound too outlandish.

However, the biggest difference between the Neopets NFTs and the animal ones is that you can make exactly the Neopet you want on the Neopets website, and you can play games with it. You can even screenshot it and make it your profile pic if you want. Additionally, because the NFTs were all “algorithmically generated”, the designs were more often ugly than not for lack of human touch. And the backgrounds sucked. As many have said before me, the NFT only has value when people give it value – and Neopets fans did not believe the NFTs had value.

Fan Impact

But… outsiders did. Outsiders didn’t mind them being absolutely hideous even by non-player standards. A screenshot from the Neopets Metaverse Discord channel showed someone referring to one of the Neopets animals as a T-Rex – there are no T-Rexes in Neopets. The closest things in-game are called Grarrls. The person was looking to invest in Neopets NFTs, but didn’t know something as basic as the name of the species they were looking for.

 In Youtuber Izzzyzzz’s video on the matter, she shows screenshots of NFT bros actively arguing with fans about the value of the NFTs the Neopets team was about to launch.

Let’s go down the line on why this was a low-value move:

1) Children do not buy NFTs for themselves, just in general. They’re too pricey and complicated for that to be a viable market even though lots of children like collectibles.

2) Adult Neopets fans understood how the site worked, and made their Neopet exactly as they wanted it. They didn’t want a poorly made render of one they didn’t personally make or like, just because it was NFT.

3) Of the fans who did like the art, they would have had to re-make their purchased token in-game in order to play with it in-game, and the NFT website (Solana) would not do that for them. But they didn’t have to buy the NFT to do that – they could assemble it from the preview pics or other people’s tweets. So why spend money to recreate the character you liked if you could do it for free? Solana doesn’t own the art it’s using, Neopets does!

4) Adults who didn’t care about the art, who didn’t care about the game, and who didn’t care about NFTs weren’t going to buy it. Outside the NFT-sphere online, many people are skeptical of NFTs.

5) Adults from #4 who like NFTs too much instead are the last remaining viable market.  

When I say ‘too much’, I mean that this was clearly a poor investment and they wanted to own one anyway, and not because they liked Neopets. This is the misunderstanding – if the fans don’t want the NFTs, eventually, the NFT-bro Neopets market will run out of people to upsell these to because better art NFTs exist, rarer NFTs exist, and Neopets players have better substitutes elsewhere. The market was pretty much only people hoping to exploit Greater Fool Theory.

NFTs are contentious, though. As I have stated before, some people believe NFTs to have value just because they’re NFTs. Instead, I’ll compare it to a tangible, collectible item with no blockchain or other fluff: a band T-shirt. Imagine a band releasing really ugly merch, the fans hating it, but outside collectors arguing that the shirt still had value, and the fans are stupid for not blowing forty dollars on a t-shirt with a missing sleeve and a misprinted graphic on the front. Not because defects are rare, no – the entire batch came like that, collectors just believe (or pretend to believe) that shirts are inherently worth a lot of money, and that their worth only goes up.

However, while this works for some items that don’t have an approximate substitute or do have a very excited, cash-flush market eager to be ‘in’ on something, it stops working when one of those two things flips.  

To continue the metaphor, fans are already used to making their own shirts for free, and many will make you a nice one too if you commission them to, even though it won’t have the band’s name on the tag. New shirts are constantly in production elsewhere, by other bands you like. Even the main band itself is offering more shirts that were made correctly this time, although you can’t say you got them from the night of the big concert anymore, so it won’t have the same tag as the flawed shirt either. If you don’t care about the tag, you can make something identical to the product you would have had to pay for, or something better. Collectors don’t know this is part of the band’s fan culture, because collectors who bought in are not fans – the collectors who are fans stayed away, understanding the rest of the fans do not want the shirts for the same reason they don’t.

Still, the collectors continue to buy and trade the poorly made shirts. They then only have other collectors to sell to, and they all swear up and down that someone on the outside finds this shirt valuable… and it will be the next fool’s problem to find that someone, all while the asking price goes up and up each sale.

The Unconverted Sprites Market

What’s especially bizarre is that NeoPets had it’s own NFT system already built in: unconverted sprites! There’s already a thriving gray market for the old-school sprites that were allowed to stay in the system after a major website update, which both introduced new pets and allowed those new pets to wear accessories. Players with certain pets who didn’t want to update were allowed to keep their pets unconverted. The update made some pets quite ugly, and some changed species altogether, so if you were sentimentally attached to your Neopet, being unable to customize them was a small price to pay for keeping them unconverted.

However, no new ‘unconverted’ pets could be made by average players, only admins had that power, and they used it very sparingly. If you wanted an unconverted pet, you’d have to organize a trade or purchase to get one. The website actually almost did something right for these fans by allowing direct trading – the old system meant putting the pet into the Neopets pound and praying the right person snagged it before anyone else did. If they didn’t? They didn’t get the pet. The new system allowed for direct trading, a much safer and easier method that also enabled the underground market to ask for bigger prices now that risk was eliminated. That new trading system indicates the Neopets team understood, for a very brief second, what their audience wanted, and actually successfully implemented a feature that most people who were still on the site liked.

For people who don’t respect NFTs and what they stand for, this was the closest anyone could get to a digital item being legitimately scarce. You could copy their image, but you couldn’t play with that copy – you had to actually possess the Neopet to use the sprite.

Stolen Assets

The team making the Neopets NFTs had the entirety of the Neopets library at their fingertips. Theoretically, their algorithm shouldn’t have needed anything from outside sources, as they had permission to use every visual asset in the game to make said NFTs. However, hardcore Neopets fans noticed that the spots on a specific cat-like breed of Neopet were the wrong color, and the Neopet itself had white outlines in strange places. (Unfortunately, Izzyzzz’s video on the subject is the only place I could find the original NFT image – it seems very few people recognized this for what it was before someone got a screengrab, so only a few pics of the glitchy Kougra exist. This image is taken from that video, linked below in sources).

That’s odd – if you assemble this outfit in the Neopets game, that doesn’t happen. Similar issues popped up with the Uni, a unicorn-like species: hats are supposed to remove its horn, but the Neopets NFTs didn’t do so for the algorithmically-generated Unis with hats.

Users who had been long term fans of the game realized that was because these assets had been stolen from a third-party Neopets game called “Dress to Impress”, a move that is both legally shady and morally gauche. They replaced these NFTs as they got the reports, but the question of why they’d even bother stealing from another game in the first place lead fans back to issues with the Neopets site itself. See, the website was still running after Flash was discontinued, but it wasn’t running well. Minigames were broken, many of the maps didn’t work anymore, etc. but one issue that many users had complained about was that accessories didn’t fit their pet anymore, or they looked wrong, or they wouldn’t appear on the character at all. Basically, some of these assets wouldn’t be available for the NFT launch unless they took it from somewhere else or fixed it in-game, and there were clearly no plans to fix it.

That being said, they kind of didn’t have to take the assets after all – according to one user who was there on the day of the launch (cited below, it’s a Tumblr post) they only used ten out of the 55 Neopets species currently in existence, and only 20 of the many, many colors available. If they were going to cherry-pick which species and colors they were going to use, why not avoid the ones with broken assets, and avoid roping in Dress to Impress altogether?

Sales

Despite NFT bros arguing on Twitter about NFT Neopets having intrinsic value, the Neopets NFT team cut down the amount of NFTs being sold from the original 20,500 to about 10,500 due to lack of demand before launch.

Just before the official launch time, for some reason, the NFT team started sales a few minutes early – leading to a bunch of NFT-thirsty bots purchasing the first thousand or so NFTs from the sale. The tokens had tiered pricing, and most of the cheap NFTs were sold in this gap, leaving real humans to get the more expensive ones. The way this sale worked is that people bought a token, not the NFT itself, and had to ‘mint’ it after the fact to see what they got – but when every single Neopet is randomly generated, that means nothing. Pricing differences will not determine how well put together the Neopet on the NFT is.

And then, regular launch happened, and people spend their cash. When minted, many buyers are vocally unhappy with what they got both on Twitter and in the official Discord channel, because just as the preview pics promised, most of them are ugly. 

But wait, there’s more! When the Neopets NFTs were first announced, scammers began assembling fraudulent websites. A handful of people went to the wrong site on the big day and had their crypto wallets drained by the scammers, which should never have been allowed to happen! There are ways to keep fraud sites out, bigger websites get imposters kicked all the time, but the team handling the NFTs was somewhat small and shady. Attracting too much attention from someone who could possibly regulate the fake pop-up sites might have been against Solana’s MO.

Sales ended, and only about 4,300 NFTs sold.

Bad Idea

Neopets promised to ‘burn’ the NFTs that didn’t sell. Some of the purchasers were happy about that, as it meant their NFT would become more rare – others saw it for what it was, a sign that demand was too low to resell any time soon.

The Neopets community was left embittered not only by the decision to sell these things in the first place, but also by the introduction of a bunch of NFT hawkers invading community spaces to try and either drum up interest for their NFTs or stir up some angry tweets to screenshot. It was a deeply unpleasant event for most of the people who just wanted to play the game, a clear sign that Neopets was no longer for children, after they’d made it clear adult fans were to sit down and stay quiet unless they wanted to spend money or give their labor to fix the site for free.

We’ve discussed what makes an NFT valuable. Most of the time, it’s the attractiveness of the art or physical object it’s attached to as well as the perceived scarcity of that art or physical object. Buying an NFT just because it’s an NFT isn’t how it’s supposed to work! Worse, complaining about the price insinuates that the NFT is not worth the money it took to buy it, so in a market that’s currently all vibes, no stats, complaining is the worst thing you can do if you ever want to get rid of what you bought. It’s why all the popular NFT marketeers call any naysaying FUDding, (Fear, Uncertainty, Doubt-ing), because implying or stating that the only thing holding up NFT values are vibes is really bad for business even when it’s provably true in some cases. Buyers complaining on top of not all of the NFTs selling (implying a lack of demand) combined with trading fan nostalgia for a quick, poorly done cash grab made this entire episode a disaster, nearly start to finish.

Sources:

https://www.nytimes.com/interactive/2021/11/03/arts/design/neopets.html

https://www.polygon.com/22334511/neopets-still-exists-black-market-cheating

https://cheddar.com/media/neopets-revamps-again-with-first-ever-nft-launch

https://www.neopetsmetacollection.com/

https://www.investopedia.com/terms/g/greaterfooltheory.asp

https://sawkinator.tumblr.com/post/667983573599518720/yet-another-neopet-nfts-update (caution, some NSFW language used in the post. This is also a direct link to a Tumblr post.)

https://www.youtube.com/watch?v=NwJM3Qqb5Ls (youtuber Izzzyzzz’s video)