Will Azuki also issue coins and play people for suckers, or will it revive Non-fungible Tokens?

Written by Pzai, Foresight News

As one of the important targets in the NFT bull market, Azuki also followed the wave of Pudgy’s coin issuance and launched its own ANIME token, and announced detailed token economics. The total supply is 10 billion, with an initial circulation of 7.69 billion, of which 37.5% will be airdropped to Azuki NFT holders, and the remaining part will be used for community funds, ecological development, and team incentives, etc.

Boosted by the release of the ANIME token, the NFT prices within the Azuki ecosystem quickly responded, and market sentiment has clearly warmed up. As of the time of writing, the floor price of Azuki series NFTs has reached 14 ETH, hitting a recent high with a daily increase of up to 17.42%. At the same time, other related NFTs in the Azuki ecosystem, such as the Beanz and Elementals series, have also risen in sync, indicating optimistic market expectations for the future development of Azuki.

From taking off to falling from the altar of gods

In the development process of Azuki, the founder ZAGABOND’s past experience and the release of the Elementals series undoubtedly cast a shadow over the project’s continuity. As the soul of Azuki, ZAGABOND once revealed in May 2022 that he had participated in and abandoned three NFT projects—Crypto Phunk, Tendies, and CryptoZunks, which were widely questioned by the community for ‘Rug Pull’ behavior. Although ZAGABOND argued that these projects were part of his ‘learning experience’ and emphasized that he did not maliciously pull funds, the community did not buy his explanation. This incident directly caused the floor price of Azuki NFT to plummet from about 20 ETH to 7.39 ETH, severely undermining market confidence.

On June 28, 2023, Azuki’s new series ‘Elementals’ pushed the community’s dissatisfaction to its peak. The release of the Elementals series was originally highly anticipated, and the community expected it to inject new vitality into Azuki. However, the actual delivered NFTs are highly similar to the original Azuki series, with a large number of repeated images and low-quality designs, which seriously undermine the rarity system of Azuki NFTs. Community members generally feel deceived, especially loyal users who have invested a large amount of money to support the project. The floor price of the Elementals series quickly dropped from 2 ETH to 1.32 ETH, and the floor price of the Azuki series was also affected, further falling to 9.87 ETH.

This series of events not only severely impacted Azuki’s community consensus, but also triggered a panic sell-off by large investors. A number of high-profile Azuki holders sold off their Azuki collections, causing further depletion of market liquidity. To make matters worse, the Azuki team’s response after the incident was seen as insincere and failed to effectively calm the community’s emotions. Despite the team’s commitment to improve the minting process and fix technical issues, these measures have not been able to restore the trust of the community. Subsequently, AzukiDAO even filed a legal action against the founder, Zagabond, in an attempt to recover the 20,000 ETH refund. In November 2023, AzukiDAO announced that it would change its name to “Bean” and transform into a memecoin project on the Blast chain.

But perhaps it was the recent popularity of PUDGY token or the experience gained from previous meme operations that led them to ultimately choose a different kind of revival through ANIME token.

NFT to the paradigm shift of ‘culture’

As early as January 6th, Azuki account has followed and retweeted the tweet of Weeb3 Foundation. Its account profile is “Building an open metaverse driven by ANIME”. So the community speculated that Azuki may be brewing some issuance plans. And as Azuki shifts its operation from NFT to ANIME, many people seem to be changing their mindset.

Azuki defines ANIME as a “cultural currency”: a movement that transforms 1 billion anime fans into a creative network owned by the community. From the beginning, Azuki’s anime style has laid a solid foundation for its future operations. Its unique art design combines the essence of Japanese animation style with modern trendy elements, successfully attracting crypto art collectors worldwide. This style not only sets Azuki apart in the NFT market but also gives it a distinct cultural attribute. The launch of the ANIME token will further strengthen Azuki’s cultural narrative. Through token economics, Azuki can not only incentivize community participation but also convey the value of culture to a wider audience.

After experiencing market changes, the mindset and needs of NFT holders have undergone significant changes, gradually viewing digital assets as a form of identity rather than just liquid assets for trading. Especially in specific communities or cultural circles, the value of NFTs has surpassed their financial attributes and become an important tool for users to express themselves and showcase their identities.

Behind this transformation, it reflects the gradual transition of the NFT market from early speculation-driven to culture-driven and community-driven. And in the current popularity of Meme, just like this Azuki airdrop for communities such as Hyperliquid (HYPE stakers), Kaito Yappers, Arbitrum, etc., more and more projects are using it as a breakthrough to provide corresponding incentives for NFT holders, expand their organic circles, and even expand their influence, achieving mutual benefit.

Alternative Growth

The growth brought by the issuance of tokens to NFT projects is obvious. For example, the trading volume of Azuki has increased significantly in the past week, and the floor price has also risen significantly, attracting more new users and funds. The Pudgy Penguins team has also followed this growth path. Since the token issuance, its floor price has been maintained at above 23 ETH, and the expected airdrop of Abstract Chain initiated by the team has provided effective endorsement for the value of Pudgy. The issuance of tokens not only enhances users’ sense of participation and belonging but also creates more sources of income and sustainable development paths for the project. Therefore, the growth generated by tokens will not only be reflected in the short-term market excitement but also inject long-term development momentum into the project through the token economic model. Compared to NFTs, homogeneous tokens have stronger liquidity and composability.

We can see that the trend of NFT ‘revival’ is very obvious, whether it is for the NFT project itself or the benefits to the encrypted ecosystem, including:

Enhancing cultural appeal and brand value: The ecosystem attracts users with common interests and strengthens community belonging through specific cultural characteristics. It endows NFTs with distinct cultural attributes, quantifies brand value through tokens, and even forms unique brand narratives through the collaboration of tokens within the ecosystem, thereby enhancing the project’s market identification and long-term value.

Expand user base and promote cross-community cooperation: attract a wider range of cultural enthusiasts, break through the limitations of the crypto community, and expand the mainstream influence of NFTs. The project creates a broader ecological network effect through token airdrops, partnerships, and other collaborations with other communities or projects. For example, the paradigm shift from NFTs to fungible tokens directly enables users to access a larger liquidity level (such as centralized exchanges), and thus provides the maximum degree of ecological access.

Create sustainable value, iterate incentive mechanisms: transform NFTs from short-term speculative assets into long-term cultural value carriers, enhance the project’s sustainability and risk resistance. Through the token economic model, the project can incentivize users to participate in community construction, content creation, and subsequently unlock more cultural-based application scenarios (such as virtual events, IP authorization, etc.). For Azuki, the vast market of anime is where it hopes to enter and delve into, and tokens have become the key catalyst and lubricant within the ecosystem, providing users with excess income and experience.

In conclusion, the introduction of tokens provides NFT holders with more rights and incentives, such as governance rights, airdrop rewards, and consumption scenarios within the ecosystem, thereby enhancing community stickiness and participation. In addition, the circulation of tokens also opens up new sources of income for NFT projects, such as transaction fees and potential staking rewards, further promoting the sustainable development of the ecosystem. However, this growth also comes with challenges, such as token price fluctuations that may affect the value of NFTs, and how to balance the relationship between token economics and NFT scarcity. In the future, NFT projects need to find a balance between token issuance and community culture in order to truly achieve long-term value growth.