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November 19, 2021

Ember Nuggets #13

What are Ember Nuggets?
Ember Nuggets are a weekly update with commentary from the investment team on what’s happening within the crypto market - news, developments, market trends, and more.

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Nugget 1: What is a Dutch Auction?
A new trend seen in NFT launches has been the Dutch auction, which is considered a fairer way to achieve price discovery on initial launch. What is it?

The price of the auction is determined by the market such that the price continues to lower until a bid is received, while remaining above the reserve price that may have been set. In NFTs, we see the Dutch auction operate in a way where the price of an NFT drops on initial mint until demand is met.

Most common method of NFT launches is FCFS (first-come, first-serve), where the project owner sets a price and the users mint and pay a fixed amount.

Nugget 2: Bored Apes and Content Creators
Bored Ape Yacht Club is a party that keeps going from NFT Summer. The project has had multiple collaborations with incumbent players in content, publishing and auction houses. They engaged with Sotheby’s and had great success. Most recently, they partnered with Rolling Stone to sell two special covers. Additionally, last week Universal Music Group acquired 4 apes to launch a virtual band. We are not sure how sustainable the price appreciation is for the NFT assets, but the community is highly engaged and the team is executing at an extraordinary clip.

The floor price of BAYC saw strong price appreciation rising from 30ETH to 50ETH, especially in a time when the market has seen NFT volumes and price decreases, along with a correction in the broader crypto market. MAYC also has seen its floor price rise from 4ETH to 7ETH. We see BAYC as the Supreme of the NFT space, and a case study for how to build an NFT community from 0-1.

Only downside – it’s hard to afford an ape at 50ETH. But if you can, you'll join the likes of Jimmy Fallon and Steve Aoki who have recently purchased and shared their apes on crypto-twitter.

How do we increase accessibility for the broader community? Stay tuned…follow my Twitter for an exclusive first look!

Nugget 3: Crypto asset manager plans to invest $100M+ into NFTs
Osprey Funds is launching a new entity, Osprey Alpha, which will allow insitiutional investors to get exposure to NFT projects. The focus will be from collectibles and art, to gaming and other metaverse assets. Institutional investors have recently warmed up to the crypto market over the past year. Most have limited liquid token exposure, but it is interesting to see a fund launch that will give this investor class exposure to NFTs – which are often decoupled from the broader market and illiquid.

Thank you for reading!


Harsharn Singh
Investment Associate | Ember Fund

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