On the evening of Jan 25, longtime non-fungible token (NFT) collectors, developers, and believers witnessed a bizarre, but likely validating piece of blockchain history: legendary collector-whale Pranksy was interviewed on the Fox 5 New York evening news during a segment on NBA Topshot, an NFT-backed collectible highlights project.
NFTs on the nightly news is the culmination of a variety of intersecting trends. For one, it’s a testament to the developmental progress the NFT space has made since CryptoKitties, the last blockchain-based collectibles project to attract a hint of public attention in 2017. The interfaces are sleeker, transactions are easier, the prices often much, much higher — and in Topshot, a use case long thought as niche or secondary is gaining real mainstream traction due to an unusually snug product-market fit.
For Pranksy, however, it marks a celebratory lap for a collector whose rise to prominence and success is possibly among the most remarkable in crypto: on the back of a lone initial deposit of $600, Pranksy now claims to command a NFT collection worth upwards of $9 million, with almost $7 million in Topshot highlights alone.
“I like to think of myself as the working man’s whale,” the 29-year game developer told Cointelegraph in an interview. “I’ve never been backed by large amounts of FIAT, and I didn’t buy Ethereum early.”
It’s a multi-million dollar achievement that itself demonstrates the growth of the NFT space, one which has been on a remarkable tear as of late. To get a sense for how both NFTs and Pranksy came this far — and where everything is going — we sat down the semi-anonymous collector and some of his colleagues to discuss whales in illiquid markets, recognizing successful new products, and the future of digital collecting.
Pranksy making the news through his NBA Topshot collection has a pleasing touch of synchronicity to it: the collector first entered NFT markets because of another project from Topshot developers Dapper Labs, CryptoKitties.
“So I started NFTs in 2017 after getting a tip off from a friend (My now business partner Carlini8) that ‘digital cat pics’ were going viral and selling for loads of money. I took a look at the site, installed Metamask, deposited $600-$800 in ETH and never looked back.”
In just a few weeks, his deposit grew to upwards of $30,000 as CryptoKitty mania took hold and clogged up Ethereum for days on end.
From there, Pranksy branched out to other projects, turning “flipping” into a second source of income aside from game development. His niche was investing heavily into projects at launch, commanding a huge supply of the circulating NFTs and growing “notorious for providing a lot of volume and liquidity to a project.”
— fiends.world (@FiendsWorld) September 28, 2020
“Pranked is a market expert and volume churner at the highest level,” said fellow NFT collector and developer Nate Hart. “People hate on flippers because of the downward pressure they put on a market, but the reality is they’re essential since a project with no volume is often a dead project.”
Nate and Pranksy have long been friends and rivals, and in 2020 engaged in a semi-public race to 1000 Ethereum in profits from NFT trades (a race that Hart made sure to specify that he’d won). Pranksy’s cornering of the Topshot market, however, has put him back in the lead.
While Pranksy’s early and aggressive accumulation of NBA Topshot Moments was a tactic he’d developed over years of practice, it wasn’t always an easy journey.
“2018-20 was a hell of a grind, scraping around for an ETH here or there, when ETH was $200,” Pranksy said.
Pranksy’s rise to whale status coincides with a growing number of major traders and collectives looking to replicate his strategies — and possibly do so with more sinister intentions.
In the traditional art world, individuals can amass and effectively control corners of the market, such as the Mugrabi family with Andy Warhol work. Given the sudden interest from retail investors, the same practices could be applied to NFTs with relatively minimal capital.
Just last week, the half billion dollar whale wallet turn Twitter personality 0x_b1 placed a 600 ETH bid for a rare CryptoPunk, the original generative art NFT project, only to be outbid by a group of buyers including FlamingoDAO, a DAO which focuses on NFT investments. The Punk now has a social-media managed personality, a marketing innovation first brought to the fore by Axia, another wildly high-priced NFT.
— The Alien | Cryptopunk #2890 (@citizen2890) January 25, 2021
Pranksy himself just joined FlamingoDAO in a transaction where he traded 60 ETH worth of Topshot moments for 1% of the DAO’s holdings, and will serve as an advisor on future purchases. He admitted that DAOs or major buyers controlling markets posed “a risk,” but said that FlamingoDO was his first participation in a DAO and that he couldn’t comment further.
Hart also acknowledged that there might be some market manipulation at play, but so far the effect has been minimal.
“I think this already happens to some extent, but just because the average price of something is high doesn’t necessarily mean anyone new will pay it…. I can’t really think of a specific time where a very large holder has came back and completely rekt a market either, so the sellers seem to understand their own positions here,” he said.
Artist Kevin Abosch, who often uses blockchain as a medium, told Cointelegraph that he’s frequently approached by both real-world and NFT funds cooking up schemes, and warned that new entrants to the market should be wary of marketing and hype.
“There are thousands of self-proclaimed ‘crypto-artists’ or ‘NFT-artists’ who see the headlines of big sales on the NFT auction platforms and understandably think there’s a gold-rush. It’s important to recognize that there’s an engineered vacuum being created and inside the vacuum it’s easy to make it seem like there are a few hyper-successful artists in the space and that a sophisticated market is emerging,” said Abosch.
“While I’m obviously deeply involved in the space, I have to tune out all the money-talk. At some point it’s vulgar. Art is for lovers and the art market is for hustlers,” he added.
While it might never again generate the kind of returns that propelled Pranksy to riches, he still believes the NFT market has plenty of gas in the tank. The key is that news reports such as Monday’s — which often strike some grizzled veterans as an obvious top signal — could lead to sustained engagement that brings “new people and collectors to the space.”
It’s not an absurd notion, either. Yesterday, Topshot eclipsed the single-day all-time secondary market activity record.
1/ Dapper Does It Again.
— Piers Kicks (@pierskicks) January 26, 2021
Hart agrees that Topshot could be a sustained hit.
“I think if you look at traditional NFTs, you essentially have baseball card collecting without the baseball. I remember collecting cards with my friends when I was a kid and while I always enjoyed tracking their values in the Beckett price guide and keeping up with a mental figure of my cardfolio, I never actually cared about selling them. I think Top Shot is becoming that trojan horse that allows real fans and collectors to collect something that they actually want,” he said.
For his part, Pranksy is angling to capture a new round of popular interest in NFTs with his latest business venture, NFT Boxes. Similar to subscription boxes in the real world, NFT Boxes will deliver to users a monthly “loot box” containing curated NFT collections.
There might still be room for successful solo traders and developers as well, however… so long as they put in the work.
“My advice to developers and collectors is to do their research! Don’t suddenly drop a new project or invest heavily into something without first spending some time in discord and on social media […] Nothing worse than buying items on opensea blind or buying a cheap license and releasing a collectible card game NFT of it.”