Street Machine getting the Renga treatment?

Welcome to the Exit Liquidity newsletter, the place to stay up to date on the ridiculous things that happen in the Crypto, NFTs & Web3. If you are looking to join the community check out the AlphaMint Discord where all the degens gather to chat in the dojo.

It was another weekend of NFT volume trending down. Stocks took a nice hit too last week. Crypto followed suit, but not nearly as much. It’s going to be this year or within the next 6 months of the first year that we find out if Crypto has truly decoupled. Friday we saw Otherside Koda’s round two, wait, that was CloneX’s Animus, the DeGods ecosystem goes to 0% royalty and we take a look at what could be a juicy, degen opportunity.

CloneX started teasing some tweets out at the beginning of the month. People weren’t sure what they were going to reveal, but I don’t think anyone expected it to be CloneX Koda’s.

Many on Twitter we’re dropping memes and commenting on how the big CloneX Animus reveal was basically a copy of Yuga Labs’ Otherside Kodas. It’s hard not to instantly think that when you see it. The CloneX stans were getting mighty defensive in the responses, but what did they expect? There are a handful of projects and anything that resembles assets from one of the biggest drops in the space is going to get called out. All in all it was fun to see the memes and it definitely was the topic for most of that day. CloneX holders are still getting an egg drop (airdrop) and we can assume given RTFKT’s history, some good utility as well.

In one of the more interesting moves, DeGods announced that the Solana based project and the affiliate ecosystem projects, t00bs and y00ts, are all moving to 0% royalties. With this move coming out of nowhere it really makes you think. There was a flurry of sales on Sunday when it was announced, but overall the floor held. There are three common theories floating around the Twitterverse as to why this happened. The first theory is that Magic Eden is moving to an opt in or out royalty fee structure to stay competitive. With a large portion of the DeGods sales being on other Solana based AMM marketplaces, it is possible that DeGods is front running their announcement and getting ahead of the inevitable. The second theory is that the project is going to launch its own AMM for their ecosystem. WIth this they could offer discounts for using their native ecosystem token $DUST or even make it so people can only buy with $DUST tokens thus continued funding for the treasury. The last theory is that it’s all a marketing stunt as the Founder, Frank, knows how to play the game very well. They will announce another raise and they get the PR of looking like a team that cares about the community when in reality they do not need the royalties.

The project has received plenty of money to build and grow via royalties already. They have the funds to start, but where is the rest of the revenue going to come from? The funds eventually dry up and most people do not continue to work out of the kindness of their heart.  Given that most companies need to make money to continue doing business, there is a revenue stream that will soon be revealed.

We wanted to share a project we’ve been looking at and following over the weekend. The project that peaked our interest is Street Machine. For those that do not know anything about the project, it is a cyberpunk, anime influenced story-telling based project with a collection size of 8,000 NFTs. If this sounds familiar or like another project that recently ripped, you’re on the same wavelength as us. Before we go any further we want to fully disclose that Exit Liquidity team members do hold Street Machine NFTs. What will follow are the reasons as to why we chose to buy, what we look at when evaluating whether to invest into a project or not and possible trading strategies. If you wish to find out, keep reading. If not, then head to the links below to catch up on what you missed over the weekend.

There are 3 reasons why we are interested in this project. The reasons are the artwork, the team comms and the Renga factor. Let’s break it down.

The first thing you notice when looking at this project is the artwork. It’s so well done. This doesn’t look like a project that was quickly thrown together. Whether we like it or not, the artwork plays and a project that looks amazing will always do better. Street Machine was designed by award winning video game artist @SpenzerG601 who worked on PUBG, King of Glory, Venom 2, and Nezha. 

The art style is also based on, in and around sci-fi, cyberpunk, and anime pop culture. With how popular the first wave of anime NFT projects like Azuki and all the waifus were, it’s easy to speculate on an anime artwork project. Especially with the hype around the next anime art wave coming including projects like Valhalla, Ether & KPR that already have a ton of excitement around them.

The other unique thing about Street Machine is that each NFT will be a hand-drawn portrait. There will be over 500 unique traits that will help holders write their characters stories in the project. Each NFT with also come with commercial IP ownership for holders meaning the possibilities are endless.

Spend any amount of time in the NFT space and you will quickly realize how bad communication from most projects can be. That’s one of the reasons we have been not only following, but able to keep up with the Street Machine project as it develops after mint. As of writing there is no Discord, but they are in the process of opening one up. If you want to find out what’s going on you can quickly pop over to their Twitter and immediately catch up with threads like this one explaining what’s going on and what’s next. Plus they even acknowledge and own up to their mistakes as well as try to make things right.

One of their mistakes was oversubscribing their whitelist and not anticipating demand. In this market, an oversubscribed whitelist is not that shocking. It still does not guarantee a project will sell out on mint day or at all. We get that they were trying to give the project the best shot at seling out. Unfortunately, this led to many whitelist members unable to mint. Instead of like many other projects saying “they messed up” and basically that’s the end of it, the artist is now working on a separate capsule collection to include those who were affected. Not only that, but they are also going to give away 10% of their treasury NFTs to those who were on the whitelist but were unable to mint. If that wasn’t a bad enough start, someone found the testnet metadata and the rares were getting sniped based off the serial numbers leaked. The team acknowledged this and mentioned that token IDs are not tied to any image files yet which leads to a new art reveal opportunity that we’ll talk about in a minute.

These two examples, plus more comms on the Twitter page, lead us to believe that this project is here to build a community and wants to keep them in the loop. Most projects instantly fall apart in situations like this with half of their community pissed off and burned before they even are a week old. Unless this is an elaborate slow rug, the comms have been solid so far from the Street Machine team. Once the Discord is open it’ll mean one more server that you have to check for updates, but we can hope they continue to do so on Twitter. 

The final reason we are interested in this project is the Renga factor. What is the Renga factor? It is a combination of fomo, artwork, story-telling and, most recently, reveal process. Never underestimate the power of fomo. People who had to sit on the sideline and watch Renga skyrocket well above a 3 ETH floor will not want to miss out again. Street Machine is many people’s second chance to ride the wave they missed with Renga. We know it’s not logical to compare each project or assume that it will do anything remotely the same price wise, but we aren’t speculating on logic. We are speculating on people’s emotions and greed. 

Speaking of greed, the latest development with the reveal changed everything. With many people talking about a manual or Renga style reveal like they did with the Black Boxes, the team is listening. They posted a poll asking the community what type of reveal they want. As of writing it is heavily skewed towards manual reveal. Two important things to note here: one, a manual or Renga style reveal was not the original reveal plan and two, the team said it could take 7-14 days for them to properly setup a manual reveal process the right way with a chance of it being done sooner, but no guarantees. If this process takes up to 14 days this project is all but dead on arrival. Two weeks in the NFT space is a long time and creates a large window for another project to take the juice. However, a manual reveal brings an entirely new gamification factor that many saw great financial benefit from with Renga and the Black Boxes. 

If this new manual artwork reveal is chosen by the community and implemented by the team it gives holders multiple different ways to trade this project. Here are three different timeline trades we are considering if this project moves to manual reveal:

Short term play: Hold unrevealed assets until day before/night before the reveal starts with the aim to sell before they start revealing. This is when fomo is highest for a project and volatility is high. Watch the volume and exit when you hit your exit price. If you are playing it extra safe, look for those 15-20% gains (don’t forget to calculate fees) and ladder out while banking your wins without having to worry about getting stuck with a bag.

Medium term play: Hold until the reveal starts and see where the price discovery goes for both unrevealed and revealed NFTs. Exit when you hit your target price. People love playing the lotto and getting that rush when revealing NFTs like those nostalgic days of opening Pokemon card packs. Many influencers also used Renga Black Box openings to farm engagement during these slow times. This can create hype and demand for the project on reveal day which can be used for higher exit prices.

Long term play: Hold all Street Machine NFT assets and bet that this is going to be another Renga. If they go the manual reveal route, you are looking to replicate the Renga Black Box holding strategy. Basically hold these until you are ready to sell for juicy profits. If you have multiple you can have fun playing the lotto trying to hit a rare. Historically it pays to hold unrevealed assets. 

If the project does not go to manual reveal and sticks to a mass reveal, the best way to optimize profits is to hold until reveal and sell the day/night before or very close to reveal time. If you truly want to hold the project buy back in after reveal as the floor price tends to dump after a reveal and you can even pick out one you like or is aesthetically pleasing.

With prices fluctuating between 0.16 and 0.2 ETH all day Monday, it seems like everyone is waiting to see what the Street Machine team is going to decide when it comes to the reveal process. This is definitely a project to watch and see what happens. You know we will be watching closely.

Crypto

• Binance Smart Chain is back online after $560M hack

• MakerDAO to Invest $500 Million in US Government Bonds

• In this newsletter's episode of What Shitty Thing Did Celsius Do Now? Celsius court docs were leak and someone made a tool where you can search users losses. If you thought you were down bad, check out these poor souls

NFTs

• New Zealand Rugby Commercial bought 33 World of Women Galaxy (WoWG) NFTs

• Punk6529 launched an on-chain, metaverse, university-level course

• 7 Bored Apes, worth over $1M, were stolen over the weekend

• OpenSea CFO, Brian Roberts, calls it quits after 10 months with the company

• Doodles announces Doodles 2, a uniquely personalized and endlessly customizable character in the one-of-a-kind style from artist Burnt Toast

• NFT FUD continues as people share this picture from Logan Paul that says, "NFT I bought for $623,000 that's now worth $10." Further cements stigma of scam mentality around NFTs when in reality 0N1 Force had many internal team issues which ultimately led to the projects failure and shows Logan Paul is a shit trader

Web3

• Virtual Society, Blockchains, and The Metaverse by Elena Burger

• How brands are using digital fashion in real life by Inn Kombarova

• Meta (Facebook) put metaverse app on 'quality lockdown' as even employees won’t use It

Disclaimer: The Exit Liquidity Newsletter is meant to be an informational and entertaining way to share interesting things found in and around the Crypto, NFT and Web3 space. Nothing in this newsletter should be taken as the contributor's, Exit Liquidity's or AlphaMint's personal opinion or views. Nothing in this newsletter constitutes as professional and/or financial advice. Cryptocurrencies and crypto-related assets can be extremely risky investments, invest at your own risk.

Forever hodling your favorite influencer’s bag: @R2Degen @DRTYMLK @dripcult

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