What innovations has the top institution Paradigm brought to the NFT field with Art Gobblers?
Art Gobblers is Paradigm's "Eureka Moment," which comprehensively innovates the existing problems in the NFT space, including: issuing NFTs through progressive Dutch auctions, optimizing the issuance of accompanying tokens with progressive ownership, and building a "decentralized gallery" in terms of curation.Author: 0xLaughing, Rhythm BlockBeats
Even if you are a newcomer to Web3, you must have heard of Paradigm. This investment firm, co-founded by Sequoia Capital partner Matt Huang and Coinbase co-founder Fred Ehrsam, has made the name Paradigm ubiquitous in the industry over the past four years. Its investment portfolio spans multiple crypto fields, including DeFi, NFTs, and public chains, with investments in FTX, Coinbase, OpenSea, dYdX, and more.
Now, the NFT project Art Gobblers is the absolute focus of this top-tier investment institution.
In less than a month, it has released four related white papers (Paradigm's explanatory documents), which comprehensively innovate on the existing problems in the NFT space: it adopts a variable rate gradual Dutch auction (VRGDA) for NFT issuance, a gradual ownership optimization model (GOO) for the issuance of ERC20 tokens associated with NFTs, new creation tools and Pages NFT gameplay for creator participation, and builds a "decentralized gallery" for curation.
This is the "NFT version of Biosphere 2" crafted by Paradigm, which could become a new paradigm in the NFT industry.
TL;DR
• Art Gobblers is an ecosystem composed of Gobblers NFT, Pages NFT, and $Goo Token.
• The artistic image of Gobblers NFT is created by Justin Roiland, who is a co-creator and executive producer of the animated short series "Rick and Morty."
• There are a total of 10,000 Gobblers NFTs, with 2,000 issued through a whitelist (300 of which are reserved for the core team), and 8,000 issued through VRGDA.
• Pages NFT starts as Blank Pages, which become Drawn Pages after artists create on them.
• Both Gobblers NFT and Blank Pages NFT adopt the VRGDA issuance method.
• VRGDA is designed to balance supply and demand during the sale, fitting actual sales to expectations.
• The $Goo token adopts the GOO issuance method.
• GOO aims to maximize the overlap between NFT and token holders; the more tokens an NFT holder has, the faster they generate tokens, passively holding NFTs and staking tokens through hyperinflation of $Goo.
Table of Contents
What is Art Gobblers?
In the official introduction, Art Gobblers is defined as an "experimental decentralized art factory," co-created by artist Justin Roiland and the crypto investment firm Paradigm.
Seeing this official definition might leave you puzzled; in summary, Art Gobblers is a large ecosystem that includes the project team, official artists, external artists, a token system, and a curation system, primarily composed of Gobblers NFT, Blank Pages NFT, and $Goo Token.
Next, we will detail these three components and their relationships.
Gobblers NFT
Animated short series "Rick and Morty"
The total number of Gobblers NFTs is 10,000, with its artistic image created by Justin Roiland, who is a co-creator and executive producer of the animated short series "Rick and Morty."
Issuance Method
These 10,000 Gobblers NFTs are issued in two ways:
• 2,000 are sold through a whitelist, all issued via Free Mint, with 300 reserved for the core team and the remainder for the community (composed of collaborators, artists, collectors, builders, competition winners, etc.).
• 8,000 are sold through a variable rate gradual Dutch auction (VRGDA). (This will be explained in detail later.)
Current Methods to Obtain Whitelist
According to Art Gobblers' official tweet, there are several ways to obtain a whitelist:
- Hold previous NFT series by Justin Roiland and participate in a lottery on the official website. The snapshot of holdings was completed on August 3, and the lottery ends on September 21.
Previous NFT series by Justin Roiland: Nifty Gateway (with 11 NFT series) and OpenSea.
Use the drawing tool officially launched by Art Gobblers to create your own artwork and share it on Twitter, with the Art Gobblers team selecting their favorite works.
Write a thread sharing your views on "What Art Gobblers means to the crypto world," analyzing from aesthetic, cultural, social, economic, and other aspects, with the Art Gobblers team selecting their favorite perspectives.
Create code that expands the Art Gobblers ecosystem, which can involve Gobblers, $Goo Token, or novel games or protocols integrating Gobbler assets.
(Note: 2-4 all require retweeting this tweet, with a deadline of September 27 at 24:00 PDT.)
Divided into Common and Rare Types
Gobblers NFTs are divided into common and rare types, with different "multipliers" for the common types. Since Gobblers NFTs can generate $Goo Tokens, the "multiplier" determines the rate at which each Gobblers NFT generates $Goo Tokens.
In addition to the common types, there are 10 rare "legendary Gobblers NFTs." According to the Art Gobblers white paper, "They will appear at specific times over the next decade, providing intermittent drama and structure for the game."
The starting price for "legendary Gobblers NFTs" is set at the price of 69 common Gobblers, and they will be auctioned using a standard Dutch auction mechanism. Each subsequent "legendary" will have a starting bid price that is double the previous "legendary" sale price. Successful auctioning here means "burning" common types; if sold for the price of 69 common Gobblers, the buyer must burn those 69 common types.
Every time 10% of the total supply of Gobblers NFTs is issued through VRGDA, a new "legendary" will appear. The rate at which "legendary" generates $Goo Tokens is twice that of the burned common Gobblers NFT combination.
Pages NFT
Pages NFTs will be divided into two types: Blank Pages and Drawn Pages.
Blank Pages NFT
Blank Pages are empty pages; initially, there are no Blank Pages when Gobblers NFTs are first issued. As subsequent Gobblers NFTs can generate $Goo tokens, they can be purchased with tokens.
At the same time, the generation of Blank Pages will also use VRGDA to adjust the supply and demand relationship, starting with a daily generation of 69 Blank Pages. Over the next approximately 8 months, the generation rate will slow along a logistic curve until it reaches a constant speed of 10 Blank Pages per day, which will then be maintained indefinitely.
The generated Blank Pages will not be allocated to the team, but one out of every ten newly created Blank Pages will enter the treasury of community artists.
(See here for parameters and issuance schedule.)
Drawn Pages NFT
Works from the official drawing tool
Drawn Pages refer to pages that have been drawn on; external artists can mint their artworks/drawings as 1/1 NFTs using the aforementioned Blank Pages NFTs, a process referred to by the official as "glamination."
These Drawn Pages NFTs will belong to the Art Gobblers Pages collection; they are ERC721 NFTs owned by the artists who minted them, and like any other NFTs, they can be freely transferred or sold by the artists.
$Goo Token
$Goo Token is an ERC20 Token generated by Gobblers NFTs. $Goo can be used to generate Gobblers NFTs or Pages NFTs, and the more $Goo a Gobblers holder has, the faster they continue to generate $Goo, with the generation speed adopting the gradual ownership optimization model (GOO). (This GOO gradual ownership optimization model will be explained in detail later.)
How the Art Gobblers Ecosystem Works
The above sections introduced the various components of Art Gobblers, which ultimately form a closed ecosystem.
For Gobblers NFT
Drawn Pages NFT can be devoured by Gobblers NFT
The term "Gobble" means "to devour." For Gobblers NFTs, they can devour the Drawn Pages NFTs created by external artists mentioned above, permanently displaying them in their "belly gallery."
Common Gobblers NFTs may be "burned" to generate "legendary" ones.
Additionally, Gobblers NFTs can generate $Goo tokens, which can be used to purchase Gobblers NFTs and Blank Pages NFTs.
For Pages NFT
Starting with Blank Pages NFTs, they can be purchased with $Goo tokens, attracting external artists to create and generate Drawn Pages NFTs, some of which may be absorbed into the "belly gallery" by Gobblers NFT holders.
Overview of the Art Gobblers Ecosystem in This Chapter
What is Variable Rate Gradual Dutch Auction (VRGDA)?
The issuance of Gobblers NFT and Pages NFT both adopts VRGDA
In the Art Gobblers ecosystem mentioned above, the issuance of Gobblers NFTs and Pages NFTs both adopts this variable rate gradual Dutch auction (Variable Rate Gradual Dutch Auction, VRGDA), which is a generalized version of the gradual Dutch auction (GDA).
From Dutch Auction to Gradual Dutch Auction
Azuki completed a Dutch auction at a price of 1 ETH
A Dutch auction, also known as a descending price auction, involves the auctioneer setting a maximum price that gradually decreases over specific time intervals, with the first bidder winning. For example, the blue-chip Azuki used a Dutch auction format during its sale.
The gradual Dutch auction (GDA) was proposed by Paradigm on April 4, 2022. The GDA works by breaking the sale into a series of Dutch auctions rather than completing the sale through a single Dutch auction.
In the GDA white paper, a non-continuous GDA is exemplified:
"Suppose Alice wants to sell 10,000 NFTs. She is unsure of the fair price for these NFTs, so she does not want to sell at a fixed price.
She might choose to conduct a Dutch auction—starting with a very high asking price and then gradually lowering it until all NFTs are sold. However, this approach may not be optimal, as there may not be enough buyers in the market to absorb all the NFTs at once.
But if Alice auctions one NFT at a time, for example, she might start a new Dutch auction every minute for a new piece. This would give the market more time to find a fair price for her NFT artworks."
The non-continuous GDA is essentially an extension of this idea.
What Problems Exist in Current NFT Issuance Methods?
• Whitelist Pre-sale + Public Sale (with various WaitList variations)
This is still the most mainstream NFT issuance method, which dumps the entire NFT series onto the market at once. There are two scenarios:
The project is extremely hot and can complete the sale smoothly. However, this often comes with a Gas War (refer to the Otherdeed sale), causing participants to incur many unnecessary expenses, and if the initial price surges beyond expectations, a slow delivery from the team may lead to price drops that harm the community and investors.
The project has moderate heat and can complete the sale smoothly. Compared to the revenue from subsequent operations, the revenue from the sale is significantly high, and many projects enter a Soft Rug state after the sale, "selling out and disappearing," with the team lacking the drive for subsequent operations.
The project lacks heat, and the "one-time dump" during the sale leads to oversupply. Whether NFT players are willing to participate in the sale largely depends on profitability; if the project cannot complete the sale smoothly at the outset, subsequent operations may be unsustainable, and the initial investments of the team and community members will be wasted.
• Standard Dutch Auction
This also has certain issues:
If the starting price is below the market fair price, it is equivalent to a public sale, and the potential problems are the same as mentioned above.
If the starting price is above the market fair price, and the minimum price is also set above the market fair price, it will lead to a failed sale, greatly affecting community and investor confidence (refer to Lonlypop's high opening and low closing).
This is essentially still a "one-time dump," and whether a project can complete the sale at a suitable price that satisfies the project team, investors, and community largely depends on the state of the NFT market; the same project may explode in a bull market but fail in a bear market.
• Linear Sale According to Schedule
Daily auction of Nouns
A typical example here is Nouns, which auctions only one item each day.
Linear sales according to a schedule effectively solve the "one-time dump" problem mentioned above, but a potential issue is that the sales model may be too simplistic and inflexible, with a fixed speed of one sale per day potentially mismatching the community's expansion speed.
How Does VRGDA Operate?
Example
In the VRGDA white paper, an example is given:
VRGDA example
"Imagine a simple schedule where we want to sell 10 NFTs per day. We set a starting price of 1 token for the first NFT.
Suppose it is now day 5, and we should have sold 50 NFTs. However, due to persistent demand, we have already sold 70. We should have sold 70 NFTs by day 7, so our sales have reached the expected quantity two days ahead of schedule.
Therefore, we want to charge a higher price in the future, needing to use an exponential curve to determine how much higher this price should be. Here is an example: since the sales situation is two days ahead of schedule, we raise the price to 2 squared, meaning the new price is 4 tokens, raising the price to suppress NFT sales.
Suppose on day 15, we should sell 150 NFTs but only sold 120; this is the sales volume that should have been completed by day 12, meaning the sales situation is three days behind. We will adjust the price to 2 to the power of -3, meaning the new price is 0.125 tokens, lowering the price to promote NFT sales."
In summary: VRGDA can dynamically adjust the price of NFTs; if demand exceeds supply, the price increases, and if supply exceeds demand, the price decreases, allowing daily sales to fit as closely as possible to the expected sales timeline.
Mathematical Reasoning
The mathematical formula provided by VRGDA:
t: sales time
p0: the price of the NFT if sold at the expected speed along the timeline (target price)
k: the percentage by which the NFT price decreases per unit time without purchases
f(t): the issuance schedule, the number of NFTs to be sold at time t
vrgda(t): adjusted price
Three examples of VRGDA provided by Paradigm
The VRGDA white paper only provides the above three examples:
A linear function, sold at a constant speed, such as selling 1 per day, similar to GDA;
A square root function, with no upper limit on total supply, but starting with high supply and then slowing down, gradually approaching a constant speed of sale;
A logistic function, with an upper limit on total supply, starting with high supply and then slowing down until the sale is completed.
For specific formula derivation, refer to the VRGDA white paper, but it can be seen that since f(t) represents the issuance schedule, the project team can decide the number of NFTs to be sold at time t when using VRGDA as the issuance method, i.e., customize the f(t) function, allowing for a myriad of issuance methods that can be derived from VRGDA.
What Are the Advantages of VRGDA?
It makes the NFT issuance method more flexible, no longer a "one-time dump" or rigid linear time sale, allowing for a customized issuance method that suits the project's actual needs and the broader market environment, enabling rapid initial expansion and gradual slowing later, aligning with the project's development cycle for more sustainable growth.
By dynamically adjusting prices to fit the sales timeline, it promotes supply-demand balance, helping NFT investors better assess NFT projects and discover prices.
It extends the project sale timeline, allowing sales to always accompany project roadmap deliveries, minimizing the macro impact of the NFT market on NFT project sales through bull and bear cycles.
What is the Gradual Ownership Optimization Model (GOO)?
In the Art Gobblers ecosystem mentioned above, the output of $Goo Token adopts this gradual ownership optimization (Gradual Ownership Optimization, GOO) model, which is used to address the low overlap between NFT holders and holders of the associated ERC20 tokens, promoting the binding of NFT and its associated ERC20 token holders.
Current Issuance Methods of ERC20 Tokens Associated with NFTs and Existing Problems
Currently, there are mainly two methods for issuing ERC20 tokens associated with NFTs:
• Airdrop. At a certain time, all NFT holders can claim/receive ERC20 tokens proportional to the number of NFTs they hold, for example, BAYC and MAYC holders can use their NFTs to claim the airdrop of $Ape Token.
• Constant Release. Through staking/tasks, NFT holders can continuously receive corresponding tokens, for example, DeGods holders can earn $DUST tokens through staking, and CoolCats holders can directly claim tokens and also earn extra tokens through tasks.
Existing Problems:
In both cases, over time, the group of NFT holders may become separated from the group of corresponding token holders.
In the case of airdrops, some users may choose to sell their NFTs while others may choose to sell only their tokens, leading to a mismatch in ownership of the project's tokens and NFTs, with no force to restore consistency.
In the case of constant release, since tokens are issued at a constant rate, the proportion of newly issued tokens in the total supply becomes smaller over time, making it impossible for the ownership represented by NFTs and tokens to restore consistency over time. Additionally, regardless of how many tokens a user holds, there is no incentive to match them with a corresponding number of NFTs, and vice versa. Once a divergence occurs between the groups of NFT and token holders, there is nothing to readjust their relationship.
How Does the GOO Mechanism Operate?
To solve the above problems and maximize the overlap between NFT and token holders, it is necessary to bind NFT ownership with token generation.
The supply of GOO will grow exponentially
The method proposed by GOO is simple: the more tokens an NFT holder has, the faster they generate tokens.
Two scenarios:
Only holding enough $Goo can ensure that shares are not continuously diluted by hyperinflation
Not holding NFTs, only holding tokens: not holding NFTs means no tokens can be generated, while other holders will continuously generate tokens, leading to a rapid decrease in the proportion of tokens held by non-holders in the total supply.
Holding multiple NFTs but only a small amount of tokens: compared to other holders, their token output will lag behind.
For Art Gobblers, Paradigm proposed a simple and understandable formula to explain token release:
mult represents the multiplier of Gobblers NFTs (not much information is disclosed, likely the attributes of each NFT, with different multipliers for each NFT), and goo in tank represents the number of tokens held by the holder.
It can be seen that token release is proportional to the multiplier of NFTs and the number of tokens held.
For specific operational mechanisms, refer to the GOO white paper, which provides results proving that if multiple Gobbler NFTs have a combined multiplier equal to that of a single Gobbler NFT, then their speed of acquiring $Goo will be the same. That is, if holding multiple Gobbler NFTs with a combined multiplier of 20 is compared to holding 1 Gobbler NFT with that multiplier, both will generate $Goo at the same speed.
Summary of Art Gobblers NFT Features
1. Uses VRGDA Issuance Method
VRGDA can dynamically adjust the prices of Gobblers NFTs and Pages NFTs; if demand exceeds supply, the price increases, and if supply exceeds demand, the price decreases, allowing daily sales to fit as closely as possible to the expected sales timeline.
2. Uses GOO to Issue Tokens Associated with NFTs
The GOO mechanism issues $Goo Tokens, aiming to maximize the overlap between Gobblers and $Goo Token holders.
3. "Decentralized Gallery" Attracts Excellent Artists to the Ecosystem
Each Gobblers NFT acts as a "decentralized gallery," where everyone is a curator. Gobblers NFTs can continuously enrich their content by "devouring" Pages NFTs, such as constructing Gobblers NFTs around a specific theme.
External artists can create on Blank Pages NFTs, and good artworks will be absorbed into this ecosystem. Paradigm envisions a positive flywheel:
• As artists create good artworks, the cultural relevance of Art Gobblers will increase.
• With the growth of cultural relevance, collectors' demand for Gobbler art will rise.
• Artists will see increasing demand from collectors and will create even better artworks.
Additionally, by painting on Art Gobblers' proprietary art platform, the entire drawing process of each artwork can be replayed, showing how each piece evolves from initial outlines to a grand masterpiece, which to some extent prevents direct theft and plagiarism, as well as reduces the phenomenon of "代肝" (outsourcing art creation).
4. Game Theory
Balancing the holdings of Gobblers NFTs and $Goo Tokens has turned into an interesting game of strategy. The competitive scenarios include:
How to adjust the ratio of Gobblers NFTs to $Goo Tokens to maximize $Goo generation speed;
When the holder's $Goo Tokens reach a certain quantity, should they spend $Goo to buy another Gobblers NFT to increase the multiplier, buy Pages NFTs to let artists create and sell, or not spend $Goo and choose to stake indefinitely? Which scenario maximizes future benefits?
Potential Issues
1. Smart Contract Security Issues
As mentioned above, unlike other NFT projects, the Art Gobblers ecosystem has a large number of interactions within it, and its operational logic requires the development of many smart contracts to support it, including the issuance of Gobblers NFTs, Pages NFTs, $Goo Token generation, $Goo Token consumption, and the conversion between Blank Pages and Drawn Pages, etc. Therefore, to ensure the ecosystem can operate smoothly and securely, the security of these smart contracts must first be guaranteed.
On September 20, Paradigm open-sourced the code, released related white papers, and began an audit competition with a prize of $100,000 to ensure system security. Prior to this, they had already undergone internal review procedures by samczsun and Riley Holterhus and hired Spearbit to audit the protocol upon completion of its development, finding no major vulnerabilities.
2. Lack of Ongoing Operations and Long Time Cycles
The roadmap in the Art Gobblers white paper states: "Justin, Paradigm, and the Art Gobblers team have no plans to build anything new after the upcoming free mint. Art Gobblers is not the first phase of the Gobblers metaverse. This is a complete alien technology that we are releasing to the unsuspecting public."
This seems to imply that the team will no longer impose external interventions on the Art Gobblers ecosystem, allowing it to develop on its own. It is estimated that the issuance cycle of Gobblers NFTs lasts for ten years; if Paradigm does not participate in operations afterward, it is hard to imagine whether it will lead to its demise.
Conclusion
Paradigm has always placed great importance on paradigm shifts, believing that the new paradigm, rather than the innovation of the old paradigm, is what can disrupt the industry. Art Gobblers brings comprehensive innovations in NFT issuance methods, token release, forms of artist participation, curation methods, and gameplay mechanisms, marking Paradigm's "Eureka moment."
The entire ecosystem vision of Art Gobblers is to achieve self-circulation through internal interactions without external intervention. Whether this "NFT version of Biosphere 2," crafted by the top crypto investment institution, can successfully launch and operate smoothly remains to be seen.
Reference
[1] Art Gobblers
[3] GOO (Gradual Ownership Optimization)
[5] Open Sourcing the Art Gobblers Smart Contracts
[6] Paradigm: Perfectly Timing the Bottom of Bitcoin with Strength, the Path to New Paradigm Investment
