One mistake made by an executive caused the floor to fall drastically for Azuki, one of the most promising NFT projects of 2022. Azuki rose to the spotlight above thousands of NFT projects debuting since the beginning of 2021.
The Azuki avatar NFT collection, unveiled by four unnamed founders in January 2022, grew a large and dedicated community. The creators at Chiru Labs’ released the project with excellent execution, leading many—at the time to believe that Azuki would eventually become “the next Bored Ape Yacht Club.” In an article published in April, Christian Williams, Editor-in-Chief of Crypto Briefing, praised the collection and counseled companies wanting to develop the next six-figure blue chip avatar to take note of Azuki’s excellent execution at launch.
The community was flourishing and growing, reaching a peak average floor price of around 36 ETH on OpenSea in April 2022. The 10,000-item set, minted for about 1 ETH each, was sold out upon release. While Azuki’s were trading near their all-time high in April, BAYC’s floor price increased from about 110 ETH to about 155 ETH. Although BAYC’s floor is much higher than Azuki’s, rumors persisted online about Azuki flipping BAYC. However, all of that positive speculation suddenly shifted in the opposite direction. One of Azuki’s anonymous creators, going by the name Zagabond on Twitter, made a terrible error of publicly talking about his prior failures.
Despite having good intentions, Zagabond tarnished the reputation that Azuki worked so hard to build. Zagabond published a blog post entitled “A Builder’s Journey” on May 9. In his post, he discussed prior failures in the NFT industry and provided an overview of some of the lessons he had discovered along the way. Stating that “The community must support artists’ innovation and experimentation during these early years. Every experiment also yields important lessons,” he added. What might seem like a motivational memoir for “failing forward” signaled a red flag by the community. Several of Zagabonds failures were reportedly perceived as rug-pulls by the community and therefore linking the Azuki project to potential past fraudulent activity. One example was that Zagabond was fired from CryptoZunks for acting irresponsibly while marketing the product on social media.
The price of Azuki NFTs dropped dramatically. It decreased by more than half in the days following the publication of his blog article. Dropping from 20 ETH down to about 7.5 ET. The price has since rebounded slightly to 8.35 ETH on OpenSea since writing this article.
Some people say that reputation is like a house of cards: it takes time to establish and is easily destroyed. NFT collectors can learn a lesson from Azuki’s misfortune. Even the most promising reputation-based initiative could fail due to one careless oversight by a founder. Azuki’s narrative is not yet over, however, and collectors may someday see the project’s redemption.