🌅 Welcome!

A Scandinavian country opens a tax office in the metaverse and a leading exchange is likely working on creating a stablecoin.

Today, we take a look at Reddit NFTs and our Research team examines the competition between X2Y2 and LooksRare.

This is the Delphi Daily. Let’s dive in.

🚨 In Case You Missed It

Norway launches a tax office in Decentraland to raise awareness about taxes related to DeFi and NFTs.
Jeffrey Yass, the co-founder of Susquehanna, donates 100 BTC to Crypto Freedom PAC, marking the largest BTC-denominated political donation ever.
Reality Labs, metaverse R&D arm of Meta Platforms, posts a quarterly loss of $3.6B with the company stating that losses will increase next year.
Sam Bankman-Fried, CEO of FTX, says the exchange will likely create a stablecoin.
Core Scientific, the world’s largest Bitcoin miner, warns it may have to declare bankruptcy.

📊 Polygon NFT Volume Ramps up as Reddit NFTs Take Off

Spooky Season is the second series of NFTs launched by Reddit. The team has partnered with 27 independent artists to release 78 unique NFTs or collectible avatars.
Each avatar is a Polygon NFT with an appearance based on the Reddit mascot, Snoo. Owning these NFTs allows Redditors to use them as profile pictures.
Over the past seven days, the cumulative trade volume of all collections within Spooky Season has reached $3.7M. When combined with Reddit’s first series of NFTs, the cumulative trade volume rises to $7.8M.
Spooky Season was launched on Oct. 20 and saw its highest trading volume of $1.8M on Oct. 24. On that day, the volume for Spooky Season NFTs soared 10x from the previous day while the total volume for OpenSea Polygon soared almost 8x.
During this period, the “Spooky Season: poieeeyee x Reddit Collectible Avatars” collection ranked first in trade volume on OpenSea, with other Spooky Season collections making a brief appearance in the top 10.

⚡ LooksRare vs. X2Y2: A Story of Incentivized NFT Marketplaces

The LOOKS token’s price rose immediately after launch, primarily driven by lucrative dual staking rewards in the form of LOOKS and Wrapped ETH (WETH).
There was a lot of speculation surrounding LOOKS’ valuation against OpenSea’s colossal $300M raise at a $13.3B valuation.
LOOKS peaked at $7 which valued LooksRare at a $7B FDV. With artificial volume painting LooksRare as a worthy competitor, it reached 53% of OpenSea’s valuation.
This was short-lived and swiftly reversed, as wash trading, hyperinflationary token emissions, and wider market turbulence resulted in immense sell-side pressure. LOOKS currently trades at $0.20 — a 97% decrease from its highs.
The X2Y2 token tells a similar story of lucrative dual staking rewards and its peak valuation at a $4B FDV.
The difference lies where X2Y2 attempted to amend the ‘wrongs’ of LOOKS by introducing a supply-burning mechanism to combat sell-side pressure.
The supply of LOOKS experienced large jumps in early February and mid-June, increasing 2.5x and 2x, respectively. However, X2Y2’s circulating supply has doubled since inception.
As of writing, LOOKS has released over 400M more tokens than X2Y2, despite both having a total supply of 1B tokens.

Due to a parameter error, 56% of the 200M X2Y2 staking rewards were distributed within the first 30 days — significantly higher than the originally planned 18%.
This error, alongside token burning, undoubtedly added fuel to X2Y2’s token price decline. Burning tokens is a double-edged sword, as you are essentially burning token incentives to attract and maintain users on the platform.
The logic of burning rewards to reduce selling pressure has not played out so far, as evidenced by X2Y2’s price being down 98% since inception.
For more on X2Y2 and LooksRare, Delphi members can read our Delphi Pro report here.

🐣 Notable Tweets

Reddit’s Metaverse Ambitions

Reddit is secretly building a metaverse empire.

NFT avatars are JUST the start.

Here’s their master plan and how you can capitalize 🧵

– Liam Herbst (@liamherbst_) Oct 26, 2022

Solving the Royalty Trilemma

Can We Enforce Creator Royalties on the Smart Contract Level?

we think we can.

A thread on our proposition. 🧵

-ape16z (@ape16z) Oct 21, 2022