Polygon NFT Volume Ramps up as Reddit NFTs Take Off

🌅 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