Kate Irwin

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The 2021-era Ethereum NFT collection Doodles, which some have long considered to be a “blue chip” collection, launched its <a href="https://blockworks.co/news/doodles-solana-token-criticisms">anticipated DOOD token</a> on Solana this past Friday.



DOOD launched, briefly had a market cap of over $100 million, and then abruptly fell to a market cap of roughly $52 million. The token has since held around that point, and sits at a <a href="https://www.geckoterminal.com/solana/pools/5KXE8RMF7iW9Ptn665AHfzsMFjYb4LV2Ta8eZEtsTwWC">$54 million</a> market cap across about <a href="https://solscan.io/token/DvjbEsdca43oQcw2h3HW1CT7N3x5vRcr3QrvTUHnXvgV#holders">159,000 wallets</a> as of this morning.



Doodles head of strategy and business development Austin Hurwitz told me in a message that the sudden price drop after launch was “expected” because the airdrop that occurred created “sell pressure on day 1.”



“We expect those tokens to rotate into the hands of people who want to hold for the long run. Would not judge the performance of the token based on launch. Every NFT launch that was given to the community at TGE has faced similar hurdles but we’d do it all over again to put our community first. Now that it’s out we can continue [to] focus on building for the future,” Hurwitz told me.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdygxEPEnnU26RCxhANy1TwC1-hTnaa0-cJkIn3R4hx0EPxLox6z9jlF-RV_k4Tir9LwN5flBEYrfroLQcuyxTiTQHse8zM1L4KrRK3u-RNyibaJGIaUc8ahXoeZGhxdtskBApZ?key=Dx9jj8VE76MnKTTzxHXLFQ" alt=""/><figcaption class="wp-element-caption">Image: DOOD’s market cap since launch.</figcaption></figure>



Here’s the thing: The Doodles team doesn’t want you to see DOOD as just a memecoin. Still, Hurwitz said the token is “memetic.”



In a post, he <a href="https://x.com/austin_hurwitz/status/1921674592487182672?s=46">explained</a> that DOOD is “the first universe token” of <a href="https://dreamnet.doodles.app/what-is-dreamnet">DreamNet</a>. DreamNet is a content-focused protocol from Doodles that uses Coinbase’s Base chain. The Doodles team has plans to make DOOD usable across “collectibles, gaming, DeFi and beyond.”



The token is expected to become a usable currency in the Doodles shop in <a href="https://x.com/austin_hurwitz/status/1921704059335065788">a few days</a>.



Doodles’ broader brand vision these days sounds a lot like that of Pudgy Penguins, perhaps its most obvious comparison. The Penguins also have cutesy avatars and the goal of becoming a mainstream character brand (and have gained some traction with <a href="https://www.instagram.com/pudgypenguins/?hl=en">social media</a> posts and <a href="https://www.walmart.com/search?q=pudgy+penguins">Walmart toys</a>).&nbsp;



Doodles, like Pudgy Penguins, is planning content, “shorts, brand collabs and merch drops,” but also wants to be powering a “decentralized storytelling movement.”



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Doodles

Doodles’ DOOD token falls on launch, but team is planning its future

This is a segment from The Drop newsletter. To read full editions, <a href="https://blockworks.co/newsletter/thedrop">subscribe</a>.



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As most of you probably know by now, Doodles — the rainbow-barfing Ethereum NFT collection of 10,000 PFPs of the 2021 NFT boom — is launching a token on Solana.&nbsp;



Response so far has been pretty mixed. A lot of Crypto Twitter loves a token, especially one from an established brand, but there’s also been some criticism. First, there’s the token allocation. As one poster has pointed out, the Doodles team may receive up to 57% of the DOOD tokens, once you combine the parts of the pie that goes to the team plus the other pieces that could go to the team. That doesn’t look too cute, considering how tokens are often marketed as a way to “give back to the community.”



And then there’s the issue of timing. Is launching a token now, on a different chain than the NFT collection, too little, too late? Will DOOD serve any functional purpose, besides offering exit liquidity, a memecoin, and a way to get a bit more attention?&nbsp;



The market has been rough out there for art- and gaming-related tokens lately. PENGU, the Pudgy Penguins’ token, is still down 67% in the past month. PIXELS, the token behind the Ronin-based game of the same name, is also still down 50% in the past month. Apecoin, the once-hyped token behind the Yuga Labs world, remains down 50% in the past year.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcG4up-Vn0LJexf2fkJAjSvocp-TBM5cpYvfpNrp0lX9jEIBNEm9UwHZaz8hw5mq2Jhvon0Cw6V8V4D4yqFt0cUE9XcasMGE2NRJ2hO-zHl9LdI5HJugatjUKLSUuEzMHy7M-X4wA?key=xnUEi2Lbmszt8LaPf2XfzfBf" alt=""/></figure>



The Doodles team has tried other brand plays to generate interest in its IP, from striking a deal with rapper-producer Pharrell to join as their chief brand officer in 2023 to partnering with McDonald&#8217;s to release cups in November. Despite those high-profile deals, however, Doodles NFTs haven’t soared above the rest.



The DOOD announcement hasn’t really rejuvenated excitement around the NFT collection either, when we look at sales and volume traded. In the past week, Doodles sales volume is down 32%, according to CryptoSlam data.



Launching a token seems to be the latest way for crypto projects to monetize their IP. While I do think the Doodles’ art and aesthetic is cool in a minimalist way, I’m not sure their token will have a different fate than so many of the others currently out there. Time and time again, we’ve seen an initial pump and then a selloff, followed by flatlining or slowly declining price action.



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Doodles’ Solana token fails to impress

Katherine Ross

This is a segment from the Empire newsletter. To read full editions, <a href="https://blockworks.co/newsletter/empire">subscribe</a>.



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Outside of L1s, this was also a big week for token announcements.&nbsp;



OpenSea <a href="https://blockworks.co/news/opensea-announces-token-and-open-beta">teased</a> SEA and a new platform, and Doodle’s <a href="https://www.theblock.co/post/340760/nft-brand-doodles-to-launch-solana-based-token-called-dood">plans</a> to launch its own token.&nbsp;



Does it mean that NFTs are back? Eh. But for <a href="https://thedrop.beehiiv.com/subscribe">The Drop’s</a> Kate Irwin, it’s a vibes booster for people, one that’s perhaps necessary right now.



(ICYMI: The Drop is our newest newsletter, and I’ve been following Irwin’s reporting in Web3 and gaming for a few years now.)



She and I chatted about the tokens and OpenSea’s OS2 and she explained that there’s another part to this: XP, which is not a token but is earnable and is “core” to the OS2 rewards program.&nbsp;



“There&#8217;s a lot of other moving pieces as well, besides just the token, which is exciting, because then it&#8217;s not a memecoin. It&#8217;s actually a utility token that has a place in the OpenSea ecosystem,” she added.&nbsp;



Phew. Nice to have an announcement not focused on memecoins.



My big thing is whether or not this comes a little too late. When Irwin and I chatted this through, she made the sage point that this could be simply because OpenSea was worried about the potential regulatory issues that could arise (they were served with a <a href="https://blockworks.co/news/sec-issues-wells-notice-opensea-nfts">Wells notice after all</a>) and now, well, that’s no longer a problem.



But, unfortunately for OpenSea, they are following in Magic Eden’s footsteps after it <a href="https://blockworks.co/news/magic-eden-airdrops-me-token">launched a token first</a>. It, notably, hasn’t dulled the excitement around OS2 or SEA though.  This could also be the beginning of a new wave of tokens, Irwin noted — especially because there is an appetite for tokens that have actual utility and not just speculation.



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OpenSea and Doodle token teasers are a potential vibes booster for crypto

Donovan Choy

McDonald’s this week announced a brand collaboration with Web3 brand Doodles, dubbed the “GM Spread Joy” campaign.



Starting on Nov. 18, McCafe cups will feature Doodles’ signature rainbow-themed graphics. 



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">drinking out of the McCafé x Doodles Holiday cups exclusively starting 11.18✨☕️ <a href="https://t.co/nBdc8VroYl">pic.twitter.com/nBdc8VroYl</a>&mdash; McDonald&#39;s (@McDonalds) <a href="https://twitter.com/McDonalds/status/1857061165760741780?ref_src=twsrc%5Etfw">November 14, 2024</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Purchasers of any McCafe hot drinks in the US can unlock various goodies including an access pass to the pilot episode of Doodle&#8217;s animated TV series <a href="https://youtu.be/FqxZuwnA4sQ">Dullsville and the Doodleverse</a>, <a href="https://x.com/jyp_nft/status/1857070291060392197/photo/3">digital apparel</a> for a Doodles avatar, and physical enamel pins.



Doodle’s digital apparel can be used within Doodles Stoodio, an avatar creation app that was <a href="https://x.com/doodles/status/1818001988581474812">migrated</a> from the Flow blockchain to the Base L2 in July 2024.



McDonald’s has in the past experimented with Web3 tools for branding like limited NFTs for the <a href="https://corporate.mcdonalds.com/corpmcd/our-stories/article/40-anniversary-mcrib.html">McRib</a> sandwich’s 40th anniversary.



<h2 class="wp-block-heading">Team Liquid launches fan engagement platform on Sui</h2>



Leading esports organization Team Liquid launched <a href="https://teamliquid.com/myblue">MyBlue</a> on Thursday, a fan engagement platform on the MoveVM-based L1 Sui.



MyBlue is a reinvention of Liquid+, Team Liquid’s original fan platform that <a href="https://teamliquid.com/news/2021/01/27/team-liquid-launches-liquid-plus">launched</a> in 2021.



With MyBlue, Team Liquid fans will be able to customize the mascot avatar of Team Liquid “Blue” with digital collectible items that are earned from completing fan engagement quests such as watching live esports matches, player streams, or general social media engagement.



Fans will also be able to unlock physical merchandise like exclusive signed jerseys, store discounts, in-game currency, or even a trip to an esports event.



Anthony Palma, Head of Gaming Partnerships at Mysten Labs said of the launch: “Through integrating Sui, Team Liquid fans will have a frictionless journey on MyBlue, acquiring collectibles to showcase their fandom without the need for a deep understanding of the underlying blockchain technology the platform is built on.”



Team Liquid’s partnership with Mysten Labs, the original contributor to Sui, was first announced in February 2024.



<h2 class="wp-block-heading">One interesting stat:</h2>



<ul class="wp-block-list">
<li>98% of NFT drops in 2024 are dead, while only 0.2% have been profitable for investors, according to the <a href="https://nftevening.com/state-of-2024-nft-drops/">State of 2024 NFT Drops</a> report.</li>
</ul>



<h2 class="wp-block-heading">Also of note:</h2>



<ul class="wp-block-list">
<li>White Rabbit, a crowdfunded anime film on Ethereum by NFT artist pplpleasr and Maciej Kuciama made its <a href="https://www.youtube.com/watch?v=kuQMm0J1SK8">world premiere</a> at Devcon 2024 Bangkok. </li>



<li>Solana-based NFT marketplace platform DRiP launches <a href="https://drip.haus/volumes">VOLUMES</a>, a music-focused initiative for indie artists compilations.</li>
</ul>



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Web3 Watch: McDonald’s strikes up branding collaboration with Doodles

Bessie Liu

Web3 media company Doodles is revamping its treasury, the Doodlebank, to enhance support for community projects.



Earlier in January, the Doodles community appointed an advisor to oversee the Doodlebank project. It recently created a community council that will focus on establishing council governance and developing a budget and proposal vetting process.&nbsp;



The community council will also be held accountable for communicating Doodlebank updates to its community members.&nbsp;



As of now, there are roughly $5 million in crypto in the Doodlebank waiting to be deployed.



<h2 class="wp-block-heading">Removing the $100k commercial license cap</h2>



One of the most significant updates about the Doodlebank project is its removal of the $100k commercial license cap for projects which are supported by approved Doodlebank proposals.



In an interview with Blockworks, Julian Holguin, Doodles CEO said that the initial purpose of the $100k cap is to protect Doodles&#8217; intellectual property, or IP.



“We want to ensure that we can control the IP and create the business opportunity for our company and our community,” Holguin said.&nbsp;



But with projects initiated through the Doodlebank, creators won’t just have the opportunity to use their one individual NFT, he noted, they will also have access to other parts of the Doodles brand to build out their ideas.&nbsp;



“So not only are we going to lift the cap and make a real business opportunity for you [the creators], we&#8217;re going to fund it for you too,” Holguin said.



Holguin notes that, currently, the Doodlebank is given a percentage of money from the sale of Doodle NFTs — though the goal for the Doodles business is to diversify that source of revenue eventually.



“We have a flagship retail experience launching this summer, there will be ticket and merchandise sales, and sponsorship opportunities around it,” he said. “You can think of it as a scaled-down version of Disneyland.”



Ultimately, the Doodlebank initiative is designed to bring the Doodles community closer together by giving more opportunities to the NFT holders.&nbsp;



“We’re going to be bringing our community into the world of Doodles — they’re already a part of it, but now they get to be part of this fantasy world as well, that’s the sense of identity that does not really exist with IP right now,” he said.



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Doodles CEO Imagines a ‘Scaled-down Version of Disneyland’

Darren Kleine

The NFT boom of yesteryear caused an explosion of intellectual property creation, with the most resilient products enduring despite the market’s volatility. One of the most successful examples is Doodles, a project that began as a 10,000 profile picture collection of vibrant cartoon portraits.



The Web3 company is now looking at moving beyond the market hype of the past, shifting its focus to building its intellectual property, or IP, outward and connecting the tightly-knit NFT community to the mainstream.&nbsp;



CEO at Doodles and former president of Billboard, Julian Holguin spoke to Blockworks about what the company is building on the <a href="https://www.youtube.com/watch?v=f-NuNEkFQEE">Empire podcast</a>.



When the project began, Holguin says, it stood out because of the new strategies it implemented, like gating Discord channels for token holders and structuring itself as a DAO — relatively novel concepts at the time. “The Doodle Bank was established and anybody that owned a Doodle got a chance to actually vote on how the funds and the bank were used.”



It was at an in-person Doodles event at the South by Southwest conference in 2022 that Holguin says people “got it.”&nbsp;



“That was really the big moment for Doodles where people were like, ‘OK, I really get it now. I truly understand where this brand can go.’”



“It was the Doodles world brought to life,” he says.



<h2 class="wp-block-heading">A new mindset</h2>



It was around that time that the shift to focusing on building a broader business started, Holguin says.



When Pharrell Williams <a href="https://www.billboard.com/pro/pharrell-williams-doodles-chief-brand-officer-board-member/">joined the Doodles team</a> as chief brand officer and board member, Holguin was assured they were serious about entering the mainstream: “All right. Doodles is here to play.”



“The founders believed that NFT technology and the blockchain can usher in a whole new mindset around IP.”



Holguin suggests that the dynamic and timeless art, created by artist <a href="https://burnttoastcreative.com/#:~:text=Burnt%20Toast%20is%20the%20working,%2C%20designer%2C%20animator%20and%20muralist.">Burnt Toast</a> aka Scott Martin, is “the thing that might be the tip of the spear” in delivering the new approach.



“To build any IP house,” Holguin says, “you need a hit first.”&nbsp;



<h2 class="wp-block-heading">Doodles is our Toy Story</h2>



Holguin compares the Doodles IP to famed computer animation studio Pixar. “The company was founded on the principle of creating technology that would ultimately change formats for the consumer.”&nbsp;



“They were developing computer animated filmmaking technology for years before Toy Story came out” but the technology was brought to the world, Holguin explains, “through characters that people love.”



“The tech made Toy Story possible, but Toy Story made the adoption of the tech possible, and that, I think, is the closest parallel to what we&#8217;re building right now.”



“Doodles is going to be our Toy Story.”



<h2 class="wp-block-heading">Partnering up</h2>



Holguin looks toward the possibility of building partnerships that “might need help coming into Web3.”



“It&#8217;s a very complicated place and some of the biggest brands in the world have failed pretty terribly,” he says.



While Doodles can act as a Web3 consultant for business partners, Holguin says, “our IP can be developed through the things that they know how to do well” — a symbiotic relationship.



Holguin refers to the recent acquisition of “world class creative studio” <a href="https://www.goldenwolf.tv/">Golden Wolf</a> as part of their mainstream expansion strategy. “We believe that we have all the pieces in place,” he says, “to continue to execute on our vision and really level that up.”



The goal is to reach new audiences with products “outside the NFT ecosystem that the NFTs will actually be connected to.”&nbsp;



The Doodles community can connect by creating lore that “ties back to product experiences,” Holguin says. “That&#8217;s such an incredible opportunity that has never existed before. You can test story and IP in completely new ways through NFTs.”



“We want the product and the lore to be intrinsically connected, and we want the community to be intrinsically connected to the lore.”



“What we&#8217;re trying to build is a world class IP house,” Holguin says, “that is made possible through the implementation of blockchain community and NFT technology.”



<h2 class="wp-block-heading">Connecting identity to digital assets</h2>



“People already care about digital goods and that trend is only progressing,” he explains. “You talk to any 13 year old or a parent of an eight year old and their kids are buying as much as they can on Roblox.”



“They want the new skins in Fortnite — digital goods are a thing. And that trend is only increasing.”



The problem, Holguin explains, is that these digital goods exist within closed environments. “You buy all this Roblox stuff, it only exists there.”



Read more: <a href="https://blockworks.co/news/what-is-decentralized-identity">What Is Decentralized Identity? The Pillar of Web3</a>



“The blockchain gives you an opportunity to seamlessly bring experiences from place to place to place and potentially connect into your everyday life.”



This innovation fosters a whole new concept, he says, connecting the real world and identity with digital assets, “because you can use them in many places, being built alongside a fictional world of characters that you love, IP that you love, and stories that you love.”&nbsp;



“That hasn&#8217;t really existed before.”



<iframe loading="lazy" frameborder="0" height="200" scrolling="no" src="https://playlist.megaphone.fm/?e=BWG7603901433" width="100%"></iframe>







“It&#8217;s mindset-shifting technology,” Holguin explains, “because if I can take an NFT that I own, I can use that as a character in a gaming environment. I can use that to go into a cafe and get a secret menu. I can use that to get access to a VIP area of a music tour. I can use that to get VIP treatment at Doodles events.”



Holguin lists more possibilities such as merchandising, apparel and licensing character traits to a brand to use in music, videos or movies. “The blockchain is the most efficient thing to connect every single touchpoint of a brand&#8217;s ecosystem.”



“Not only are you providing value back to your community, but you&#8217;re also extending the reach of your brand,” he says.



“How do we partner with global brands, create really cool things with them, and then give our community access that the general public does not have? That&#8217;s kind of what we&#8217;re doing.”



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Doodles: Going Mainstream With Web3 IP

Ornella Hernandez

<div id="highlights-block_62b9f5c9929a0" class="highlights">
 <ul>
 <li>The top 10 collections went up by about 25% over the last week during New York&#8217;s premiere NFT summit</li>
 <li>The future of the Open Metaverse and crypto-based gaming were topics of discussion</li>
 </ul>
 
</div>



From Snoop Dogg <a href="https://twitter.com/fairxyz/status/1539582644110999553?s=20&amp;t=Q1GgqXVsK5FsHEZ63LQ2RA" target="_blank" rel="noreferrer noopener">impersonators</a> walking around Times Square to staged <a href="https://twitter.com/Loopifyyy/status/1538913675054047232?s=20&amp;t=zzoQrXimIXNCFzDExdOmXA" target="_blank" rel="noreferrer noopener">anti-NFT protests</a>, the NFT.NYC conference was designed to market Web3 brands and convene as many people as possible in the Big Apple. 



Members from top-tier communities such as Bored Ape Yacht Club and Doodles showed up in full force to one of the largest NFT (non-fungible token) events.&nbsp;



Bored Ape Yacht Club (BAYC) hosted the members-only ApeFest jamboree at Pier 17 with appearances from comedian Amy Schumer and performances from rappers Eminem and Snoop Dogg, who also <a href="https://twitter.com/SnoopDogg/status/1540189746877632514?s=20&amp;t=CR8ER6yaTFaO0uYkCuL3mg" target="_blank" rel="noreferrer noopener">premiered</a> a music video featuring their BAYC avatars.



The founders of BAYC-creator Yuga Labs on Friday <a href="https://medium.com/@team_69582/a-letter-from-the-founders-678e5a3431e7" target="_blank" rel="noreferrer noopener">published</a> a letter on Medium in response to the backlash from a recent investigative video on YouTube called the Bored Ape Nazi Club that made conspiracy claims and accused the team of having cult associations.



Doodles further permeated pop culture with a <a href="https://twitter.com/gmstudiosgg/status/1540378558509375488?s=20&amp;t=d-ra4uC4HGk0mcsjhf3_Tg" target="_blank" rel="noreferrer noopener">real-life setup</a> of the Doodles world and a number of announcements, including <a href="https://twitter.com/doodles/status/1539444678642352129?s=20&amp;t=Gi43A_iI8-P5YB4OluanfQ" target="_blank" rel="noreferrer noopener">Doodles 2</a>, an upcoming collection of animated profile picture NFTs. Pharrel Williams was also announced as the company’s new chief brand officer. The Doodles Dooplicator project, which was airdropped to holders in May, became the most traded project on OpenSea during the 48 hours following the news.



Title sponsors for NFT.NYC 2022 included blockchain network Polygon and crypto payments provider MoonPay, which debuted its own <a href="https://cms.blockworks.co/moonpay-primes-nft-minting-service-hypermint/" target="_blank" rel="noreferrer noopener">NFT minting service called HyperMint</a>.



Throughout the event, Blockworks interviewed developers, collectors, founders and analysts. Here are some of the notable themes from the week.



<h3 class="wp-block-heading">The promise of an Open Metaverse&nbsp;</h3>



Various companies are working to make the metaverse a reality, specifically a 3D interoperable open metaverse — this means bridging virtual worlds that serve as gamified social networks, and merging our physical and digital identities.



“The future we are fighting for involves breaking virtual walls and connecting the world,” said Timmu Toke, the chief executive officer of Ready Player Me, a platform that creates metaverse-ready avatars with a selfie that are compatible across apps and games.&nbsp;



Interoperability in the metaverse is comparable to an open free trade market “that isn’t controlled by anyone,” Toke said. And an open system is simply “better business.”



Avatars are the most important element to an open and scalable metaverse, according to Toke, and interoperable avatars will generate more sales of digital assets “because people will place more value on avatars that can be used everywhere, not just in one game.”&nbsp;&nbsp;



When it comes to digital identity, Danny Greene, the general manager of the MeebitsDAO, believes that identity is “not monolithic,” but rather fluid. “Expressing ourselves in the metaverse is distinctly different from the experience [in real life] where ingrained prejudices have a direct impact on how one is perceived,” he said.



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">“The avatar you choose, the wearables that you wear, the spaces you occupy are a signal about what is important to you, what you stand for,” Greene added. </blockquote>



Last week over 30 tech giants including Meta, Microsoft and Epic Games <a href="https://metaverse-standards.org/news/press-releases/leading-standards-organizations-and-companies-unite-to-drive-open-metaverse-interoperability/" target="_blank" rel="noreferrer noopener">formed</a> a standards organization called the Metaverse Standards Forum (MSF) to define the priorities and principles behind technologies created for the metaverse, including virtual reality and augmented reality.



<h3 class="wp-block-heading">Gamers will keep on gaming</h3>



When it comes to play-to-earn gaming, Grant Haseley, founder of play-to-earn crypto game Undead Blocks, said the future of play-to-earn games will depend on “shifting the paradigm from pointing and clicking and being able to earn decentralized yield farming.”



Esports tournaments and NFTs may give players the opportunity to win big, he said, but rewards should go to those who really want to be a member of the community.



“If you&#8217;re a top player, and you&#8217;re committed, driven and driving value back to those games and those ecosystems, then you should earn some rare assets.”



Dylan Bushnell, the vice president of game design for publisher Atmos Labs, spoke about the need for horizontal integration and the value of customization in blockchain gaming.



Blockchain games have done well when it comes to replicating collector mechanics, but they continue to attract only niche audiences, according to Bushnell, adding that gamers want to play in a universe that reflects whoever they want to be.&nbsp;



“Your identity within a game is only as meaningful as the amount of variation, as how much we empower you with customization” from performance to skins, Bushnell said.



He added that publishers need to give people the choice to make their characters or avatars that they’ve spent time building and competing with a part of their identity, without limiting performance.&nbsp;



<h3 class="wp-block-heading">NFT lending stays strong</h3>



There are multiple motivations to take out a collateralized NFT loan, from gaining leverage to be able to buy more NFTs to obtaining liquidity needed for some other purpose.



A big use case now during a bear market, according to Gabe Frank, the CEO at peer-to-peer NFT lending platform Arcade, is for NFT borrowers to hedge their NFT exposure.&nbsp;



Comparing taking out a loan on an NFT to buying a put option, Gabe explained that if the collateral value drops below the market value, “the borrower doesn&#8217;t need to pay back the loan. So you basically have the right to sell it. It&#8217;s a way to hedge downside risk.”



He also expects to see more defaults in the coming months and stated that lenders are steering clear of artwork NFTs, as opposed to PFPs or collectibles because they are less liquid. However, Frank is bullish on CryptoPunks: “The floor is going to be 10 million in 10 years.”&nbsp;



CryptoPunks’ floor is up from the low 50s in terms of ether during the week of the TerraUSD crash, to 66 ETH at the time of publication, although that represents a decline of around $10,000 in US dollars as the price of ether has fallen from $1,700 to $1,100 in the same period.



On the other hand, Stephen Young, CEO at rival peer-to-peer lending platform NFTfi, considers CryptoPunks to be artwork.&nbsp;



“The 10 million PFP projects that all launched at the same time are all just kind of falling through the floor. And people are rushing to the assets that are showing real value and staying power.”



Young believes CryptoPunks, as well as on-chain generative art such as Autoglyphs or Art Blocks collections such as Squiggles, Fidenza and Ringers, may appeal now more than ever to traditional art collectors given the adverse market conditions. $60,000 for a Punk is “all of a sudden actually affordable” to fine art collectors, Young said.



“First prices fall all the way along with [ether] until we get to the bottom, and then you&#8217;ll see quality projects start to rise in terms of ether prices again,” he added. “Because, at some point, they&#8217;re cheap.”



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