Polygon NFT Volume Ramps up as Reddit NFTs Take Off

OCT 27, 2022 • 4 Min Read

Adrian Von Catangal

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🌅 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.

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