Why is the hot NFT project Art Gobblers so cool?

Author: Kaspar Chen, 1435Crypto

Overview

It may not be as cool as imagined, but it is still quite cool.

The VRGDA has limited impact on project value, while GOO may have a higher value gain.

Understand AG as an "art NFT Marketplace with gameplay," an ecosystem for creators with no-code tools, primarily targeting users with an interest in art.

Ordinary players have speculative opportunities, but the current project hype premium is too high, and entry is not recommended.

Art Gobblers (hereinafter referred to as AG) has stirred up a warm breeze in the cold bear market these days, quickly providing a refresher course for those who haven't been blown away:

1. Project Background

a. In the NFT issuance market filled with "learning teams," AG has an enticing background, crafted by the top crypto venture capital firm Paradigm, with "top crypto IP"------**Justin Roiland, co-creator and executive producer of **Rick and Morty, serving as the artist, combined with an ecosystem that is distinctly different from traditional NFT projects, making it the brightest star in the night sky recently.

b. Its ecosystem includes three core components:

1.

1. Gobblers: the main body being sold, those cute little monsters;
2. $Goo: Utility Token obtained by staking AG;
3. Pages: functional NFTs launched and sold simultaneously with the Token, also the core of the ecosystem gameplay, with 2 states, holders can create on the initial "Blank Page," which transforms into a "Drawn Page" upon completion.

2. Sale Structure

1.

1. Time: The project's first tweet was on June 10, the official website was announced on August 17, and it was launched at 4:20 am Beijing time on November 1, with the reveal at 4:20 am on November 2;
2. Quantity: A total of 10,000, with an initial release of 2,000, and the remaining 8,000 to be sold later using $Goo in the form of VRGDA (a variant of Dutch auction);
3. Distribution: Of the initial 2,000, 300 are allocated to the team, and the remaining 1,700 are distributed to major communities, KOLs, and winners of community events in the form of a whitelist (Mint List);
4. Whitelist Acquisition Methods:
   1. Preceding NFT Snapshot Lottery: Justin Roiland previously released a series on OS and Nifty, with the snapshot completed on 8/3 and the lottery ending on 9/21;
   2. Drawing Activity Winners: Use the official drawing tool to create and post on Twitter, with the team manually selecting people to DM;
   3. Writing Short Essays: Write a thread on Twitter sharing "What AG means to the crypto world," with the team manually selecting people to DM;
   4. Contributing Code: Creating derivative projects based on the AG ecosystem (similar to Loot series);
5. Price: The minting price for the initial 1,700 whitelist NFTs is 0E (i.e., Free Mint), and subsequent prices will be automatically adjusted based on market supply and demand;

3. Project Highlights

1. Eye-catching background, Paradigm + Rick & Morty is enough to grab attention, and many KOLs received early allocations, generating a lot of hype.
2. Innovative use of VRGDA for the sale model (which will be explained later).
3. The distribution of the $Goo token also adopts a new GOO model (which will also be explained later).
4. The project employs an innovative closed-loop ecosystem gameplay (which will be emphasized later).

4. Market Status

1.

1. The off-market whitelist price before the sale has reached 3E and is extremely hard to obtain;
2. After the sale, the price increase was quite exaggerated, with the lowest transaction price for the FreeMint project being 5E, which surged to a peak price of 16E in less than half an hour, then stabilized around 13E;
3. As of the time of writing, it is 11:40 pm Beijing time on November 1, with a floor price of 13.2E, trading volume of 16.4k ETH, and a listing rate of only 5% (data source: NFTTrack).

1. Variable Rate Gradual Dutch Auction (VRGDA)

This is actually the result of two mutations:

• #0 DA: The traditional Dutch auction (DA) is familiar to everyone; one of the current NFT landmarks, Azuki, used DA, which starts at a relatively high price and decreases at a certain rate over time. For example, if the starting price is 3E, it decreases by 0.1E every 20 minutes until it reaches 2E.
• However, there are several issues with this. Traditional DA requires setting three parameters: starting price, minimum price, and rate of decrease (including time & interval). If a project has extremely high market hype, DA becomes meaningless as it ends at the opening (like Azuki back then); if a project has average hype, and the market reaction takes longer, or if the market's expected price is lower than the set minimum price, it may not sell out, leading to a failed sale (like LonelyPop).
• Therefore, DA allows project parties to set a price range but does not effectively help the market find a fair price.
• #1 GDA: In April of this year, Paradigm proposed a Gradual Dutch Auction (GDA) model, which essentially breaks the Dutch auction into many parts, adding a price increase rate on top of the decrease rate.
• The operation becomes that 5,000 NFTs are split into 5,000 DA sessions (or 2,500, meaning 2 are auctioned each time), with prices continuously decreasing from 10E. Once a batch of NFTs in a DA is sold out, the starting price for the next auction increases slightly, becoming 10E * set increase rate (e.g., 10%) * time decay rate = 11E * decay rate 0.6 = 6.6E (there is an actual algorithm for this, which can be found in the official documentation).

Writing formulas can be a bit hard to understand; imagine a simple game like Flappy Bird or Doodle Jump, where the price drops on its own, but when you tap it, it jumps up a bit. Here, the "tap" trigger is completing the DA. This can slightly alleviate the issue of DA needing to be completed within a limited time while the market requires more reaction time. (But honestly, I haven't seen any project parties adopt this sale method lol)

#2 VRGDA: In August of this year, Paradigm iterated again, specifically creating this sale model for AG, which will also be used in a future project, 0xMonaco. Unlike the GDA's tap-to-fly bird model, it takes the previously mentioned increase rate (the height the bird flies after being tapped) and does something with it. The previous increase rate was preset, while in VRGDA, it is calculated by an algorithm based on market supply and demand.

• In simple terms, the more people buy, the higher the increase; the next starting price will be higher; the fewer people buy, the increase will turn into a decrease, and the starting price will be lower. This ratio is variable, hence the name Variable Rate GDA.
• The project party needs to define what counts as many buyers and what counts as few, so a preset sale schedule is required, which the project party can adjust. For the AG project, the current planned sale cycle is about 10 years, with a continuous decrease from approximately 200 units per month.

So if in the first month, 300 units are sold at 200$Goo each, the price for each in the next month might rise to 300$Goo; conversely, if only 100 units are sold, the price might drop to 100$Goo (purely hypothetical and not reflective of actual figures).

What does this model mean for the AG project? Personally, I have two guesses: one is that it seems Paradigm really wants to do something, as an institution that pays close attention to paradigm shifts, they want to see how the GDA model performs in the market. However, when it came out, it didn't make much noise, so they might as well create one themselves; the second is that the ecosystem gameplay of the AG project actually requires a longer market reaction time (which will be elaborated later), and previously there wasn't a good model to support this gameplay. From what I've seen, VRGDA appears to be the most fitting model.

However, whether this innovation in the model can bring value gains to the project remains to be seen, just like how Azuki innovated and developed ERC-721A, but Azuki's core value still lies in its strong community/brand culture; any structure or sale model is meant to serve the project itself.

2. Gradual Ownership Optimization Model (GOO)

This is relatively easier to understand; it is an optimized ecological token distribution model.
Traditional NFT token distribution generally falls into two categories: one is like BAYC, where holders receive a snapshot and are airdropped a corresponding proportion of tokens based on their holdings; the other is staking NFTs to produce a certain rate of tokens, like OTS, PXN, LaserCat, etc.

So what are the problems here? In the case of airdrops, people might take the airdrop and run, leaving subsequent holders without benefits. In the case of staking, there are two scenarios: one is an open ecosystem (like above), where holders can stake while selling to earn a salary, leading to more selling pressure daily, and others can buy tokens directly without needing to buy NFTs to consume ecosystem rights; the other is a closed ecosystem (not listed, only consumable), where the token distribution structure becomes very imbalanced, with old holders holding a large amount, and consumption scenarios may not keep up.

What does GOO do? Simply put, "if you want to produce tokens, you must double stake." Holding an NFT is a prerequisite of "0 and 1"; you need to have it to produce tokens, but how many tokens you produce depends on how many tokens you hold (not really staking, somewhat similar to PoS). This promotes the re-circulation and distribution of tokens, and new entrants need to buy a certain amount of tokens from old holders to keep up with the pace, while old holders don't have to worry about having a lot of tokens that can't be used.

I personally believe that this optimization model can bring additional value premiums to AG, as it indeed attempts to solve the awkward situation of ecological tokens in many past projects, but how much it can optimize remains to be seen.

This is the most interesting aspect of the AG project, and I personally think that while it is cool, it is not really a project for the general public.

First, let's review the three elements in the AG ecosystem:

Gobbler: the main body, a cute little monster that can eat Pages and display all the collectibles in its belly; it can also eat other little monsters to synthesize rare monsters (big monsters lol, token production rate x2);

$Goo: the ecological token, used to purchase Gobblers and Pages, in a state of continuous issuance;

Page: the core item, initially in a "Blank" state, which transforms into a "Drawn" state after being created using the official drawing tool, also sold using VRGDA, gradually decreasing from an initial 69 per day to 10 per day, and can be eaten by Gobblers.

The flowchart of the process is as follows:

Simplifying a bit, we can get the following flowchart:

Hold Gobblers
Hold Gobblers to produce $Goo
Consume $Goo
Purchase Gobblers -> Synthesize big monsters -> Produce more $Goo
Purchase Blank Pages
Create to transform into Drawn Pages
Held Gobblers eat Drawn Pages

So we can see that the core of the entire ecosystem revolves around Pages, which are the core consumable/circulating goods, and the ultimate consumers of Pages are artists with creative abilities. Correspondingly, those who purchase/eat Pages are collectors/institutions with artistic appreciation abilities.

Therefore, from this logic, it is better to understand the official definition of "experimental decentralized art factory" from the perspective of "art NFT Marketplace with gameplay." The entire AG is an ecosystem for creators with no-code tools, where each Gobbler symbolizes an account (or gallery), and Pages are NFTs. Creators no longer need to learn coding and can create directly, while collectors can freely allocate their collections to specific accounts to form artistic combinations based on their styles and preferences. Thus, it can be seen that the main audience here is still art collectors.

So can ordinary users like the author not participate? Not really.

Let's review the roles of participants in the entire ecosystem, which can be categorized into three elements, each further classified based on purpose:

Gobbler Holders

Collectors: Consumption role, aiming to collect their favorite artistic creations, suitable for anyone;
High-end art players: Investment role, aiming to create unique art combinations to achieve a 1+1>2 effect, selling Gobblers at high prices for profit, suitable for those with strong artistic perception;
Wholesalers: Speculative role, aiming to hold empty Gobblers and sell them to the above two roles for profit, suitable for those with market awareness. However, in the AG ecosystem, due to the long supply release cycle, this role will face greater difficulty;

$Goo Holders

Gobbler holders/entry players: Mainly aiming for higher output rates/purchasing Gobblers;
Artists: The main purchasing power, aiming to buy Pages for creation and resale;
Speculators: Basically nonexistent, as tokens will be released in large quantities over time, theoretically keeping the token price in a state of permanent inflation.

Pages Holders

Artists: Mainly hold Blank Pages, aiming to create and sell for profit;
Wholesalers: Mainly hold Blank Pages, similar to the wholesaler role in Gobblers;
Collectors: Mainly hold Drawn Pages, aiming to collect and feed them to Gobblers to form combinations. Of course, there will also be some wild collectors without Gobblers or collectors holding Blank Pages who directly commission artists to create;
Flippers: Mainly hold Drawn Pages, aiming to intercept collectors' interests or wait for future collectors to appear for profit, which may require some artistic perception.

Therefore, for ordinary players, wholesalers/flippers can also be opportunities for participation, but I personally believe that the current hype around Gobblers has brought excessive premiums, making it unsuitable for entry. Ultimately, it is an art project, but the audience for art in the market has not yet reached a stage that can support the current hype.

In the short term, some data can be referenced (data source: NFTGO):

The platform Foundation, focused on art projects, has a trading volume of 4.78k ETH in the past 3 months;
The art NFT project Art Block has a trading volume of 10.76k ETH in the past month;
The Otherside, another hot project, had a trading volume of 22.9k ETH in the first 24 hours of sale, but with a total issuance of 100,000;
In contrast, Art Gobblers only issued 1,700 units, and its trading volume reached 16.4k ETH in less than 24 hours. How much of this is from genuine audiences and how much is emotional speculation is for everyone to discern, but I personally do not believe this is the right time to enter.

In the medium term, as a highly artistic platform, it needs to prioritize attracting more quality creators and incentivizing better creations. Since the audience for art collectibles is narrower, with stronger stylistic preferences and lower turnover rates, it requires extremely high-quality works to achieve high transaction prices and diverse styles to enhance transaction rates. It first needs to gain the recognition of collectors and provide enough choices to drive traffic, which is also the core of the entire flywheel.

Currently, AG may hope to encourage creators to be cautious in their creations by limiting production capacity; and extend the initial supply release cycle to give the market enough reaction time. I personally speculate that after the first few batches of Drawn Pages are released, whether due to market behavior or official promotion, it should feed a few Gobblers with higher transaction prices, further stimulating market reactions.

Overall, in the long term, AG is still a very interesting project. This stronger interaction between collectors and creators may indeed build a vibrant creator ecosystem. From early activities, it can be seen that AG has the intention to emulate the Loot ecosystem, hoping to grow something interesting based on its own ecosystem. Although it may still be too early for that, I personally still like this kind of open, combinable idea and look forward to seeing what this experimental field of Paradigm will grow into.

References

Art Gobblers
Gradual Dutch Auctions
Variable Rate GDAs
Art Gobblers: The most avant-garde issuance, crafted by top institution Paradigm, the "NFT version of Biosphere No. 2"
Art Gobblers Twitter