Issue 12 🍵 Please identify yourself

NFT-gated alpha testing, Opensea raise, news from MEME, and more.

Disclosure: This newsletter is not financial advice. Cup owns $MEME, $B20, a Malavida, and a Beeple. We buy what we like, and you should buy what you like.

Buy an NFT, get access and an identity

NFT fatigue is real. It’s been another week of more pixel collectibles with FOMO pricing, so thank God we actually got something interesting: an NFT-permissioned launch.

Basically, Teller Finance is an upcoming undercollateralized lending solution on the blockchain. Usually, these protocols need some cash to start with. Most of them take investments or sell their token (like selling equity).

Teller instead decided to sell NFTs.

One of the perks of buying the NFT is access to the closed alpha, and “NFT holders that stake, borrow, and repay loans, will earn a share of the interest (APY) accrued over the Alpha’s first four weeks.”

Let’s dig into why this is really exciting to see.

For Teller, not only do they clearly keep more of their potential token, but they also get a curated, committed list of participants.

Buying an NFT is an irreversible, irreplicable trade. It’s a commitment to a position. By vetting their alpha users through an NFT purchase, they are getting a more active cohort of users who’ve opted into what they’re doing.

As users, we think it could be a strategic move to get this NFT. Yes, there’s the perks of using the platform, but speculating here: this might be the start of using NFTs to identify active users.

Because in DeFi, it’s common for protocols to attract users by airdropping their token. Think: a stimulus, only instead of cash, it’s a stock/cryptocurrency. Some people won’t care for the service, so they sell the token.

That’s not the ideal behavior—you’re trying to get users! Therefore, the trend has been to curate addresses with a history of using adjacent products, in the hopes that they become active participants.

But this method isn’t guaranteed, and it’s also a very inefficient way to give away your token. Wallets are anonymous, and it’s easy to shuffle funds around. We’re definitely not the only who’ve set up multiple wallets to interact with the common protocols (*cough* Yearn *cough*) to get more free money.

If you get one of the Teller NFTs, though, you immediately mark your wallet. If you hold the NFT and participate in the launch, your wallet history will signal that you are a committed, active DeFi participant. Why airdrop to a bunch of random people when here’s a clear, committed user?

This is just us speculating, of course. But NFTs, by their very non-fungibility, have always been wallet identifiers. There’s no way to shuffle an NFT. And it’s dumb to just give away your governance token based off of a list of behaviors, so we really do think that NFTs will play a role in optimizing user profiles.

Fun, exciting times. We’ve been waiting since last year for a DeFi protocol to vet commitment via NFTs, so we’re definitely going to be watching this closely.

If you’ve been liking Cup so far, please donate to our Gitcoin! The matching bonuses end on the 25th, which is tomorrow.

We truly imagined that we’d only get like, $10 or something, so it’s wild that we’ve gotten $600 thus far. Cup’s finally getting that domain name!!!

If you participated in the grant, thank you so much for the support 😭

Other news

🚢 The beloved NFT marketplace OpenSea recently raised $23M. The new investors include some top Silicon Valley names—Naval, Balajis, Alexis Ohanian, Mark Cuban. Pretty stacked list, and it’s interesting how NFTs have been raising some really high valuations VS other crypto categories, like DeFi (commerce > finance?).

🍍 The team behind the experimental NFT platform, MEME, is joining some other cofounders to create Nifty’s, an NFT-focused social media platform. The MEME team iterates really quickly, so we’re excited to see where this goes.

Sidenote: we’re really waiting to see them explore loyalty mechanics. The original premise of MEME is that you stake some capital to earn points to redeem for NFTs, but that can be easily gamed. If they do a Beeple drop, what if there was a point multiplier depending on how long you held the B20 token or a previous Beeple NFT? Or previous MEME NFTs? 👀

And RE: the rumored Beeple drop, MEME is doing a lot of hinting. (screenshot taken from announcement, circle is ours)

Reading list

  • And to end, here’s a good diagram.

Creative corner: Malavida and Heal the Deal

Malavida, also known as Alycia Rainaud, is a French graphic designer. She makes these beautiful abstract swirls of art. Her color palette and tonal values are always so consistent, it makes her work so easy to spot.

She talks a lot about mental health, and one of the things that we like is that she took it further with Heal the Deal. She calls it an “emotional support club,” and it’s very a wholesome and supportive Discord.

But a while back, she released these membership card NFTs that are “reminders of their belonging to a safe and caring community.” In a time when a lot of people are rushing to create NFTs, it’s fascinating how Alycia instead used her collection as a starting point to create a community.

Needless to say, we’re very excited to see Phase 2.

Check out the Malavida website, and you can learn more about Heal the Deal here.

Try these?

Nothing free to try this week, so just gonna mention two opportunities. Research further if you like.

  1. The game Aavegotchi is holding a Wearable raffle on the 29th. Included are some items based off the rapper Lil’ Pump. #gotchigang

  1. The upcoming auto-battler game Illuvium have started a vote to hold their token sale on March 30. It looks like it will pass, so that’s something to look out for.

Thanks again for being here.

🍵 See you again next Wednesday!