Here’s the fable of Blue Kirby, the anonymous, video-game based character, who rode the explosive rise of the most popular DeFi token to the top and crashed back to earth along with it.
Blue Kirby’s Twitter account emerged in the space at the end of July, right as Yearn Finance was gaining traction from its ground-breaking 100% community-owned, supposedly “valueless,” governance token. YFI turned out to be anything but valueless and quickly soared to as high as ~$42k. Blue Kirby positioned itself at the center of the YFI boom, producing educational material, churning out bullish tweets, and meme-ing itself to crypto Twitter fame.
But the DeFi hype man got too, big too fast.
Off Blue Emerges
The once-beloved character’s downfall sucked up the industry’s attention this weekend as his latest endeavor Off Blue, a decentralized auction house with its own governance token called BLUE, which raised nearly 2,500 ETH by selling NFTs. Sales earned it the top slot on Rarible’s sellers’ list by many times over.
Spurring those sales, was that the project’s manifesto said NFT holders were eligible for BLUE airdrops or to stake tokens and receive governance weight plus future issuance.
The rate at which NFTs were being sold quickly raised red flags, leaving many to wonder what was being done with the funds that were loosely allocated to different buckets, and question whether Blue Kirby was simply keeping it all.
Amid rising concern about the use of funds from NFT sales, Rarible suspended the Off Blue account and the team behind the project created a refund portal to honor anyone who was not comfortable with the sale. That portal can be found here.
We have suspended the OFF BLUE team account until further examination due to potential violations of our terms of service. Rarible is not intended to facilitate capital-raising transactions. Please see https://t.co/aMIyqs8dPs or contact email@example.com for details.— Rarible (@rariblecom) October 10, 2020
Had the crypto market not been on a downturn, the DeFi community might have not looked twice at the hundreds of thousands in digital assets being thrown at a days old project, but YFI was in free-fall and Blue Kirby’s reputation had already been tarnished.
The anonymous account had shilled Eminence, a project that was being developed by Yearn founder Andre Cronje, before it was live. Eminence got attacked causing those who had followed Kirby into the project’s smart contracts to lose their funds. In a further perceived betrayal to the community, Blue Kirby apparently sold YFI for ETH as it started to plunge from its peak —the anon character said it was to move their cash to a private account, but the damage was done.
When Off Blue started to unravel, Blue Kirby deleted his 20k follower Twitter account and said he was removing himself from the Off Blue project via a post-mortem closure post. He was able to leave as quickly as he came, except with earnings from his Yearn and NFT work.
While there were many reasons behind the account’s termination, perhaps the worst was the public doxxing and threats angry members threw at the main person behind Blue Kirby.
The fable of Blue Kirby shows that when sentiment and prices turn on anonymous founders holding a big enough stash, the lure of pressing delete without suffering reputational damage is proving to be too hard to resist.
And the market is taking note as coins backed by anonymous founders like SUSHI and SWRV are underperforming ETH and other DeFi tokens, though the bigger driver is likely that the projects were forks that didn’t add enough value relative to the original protocols, not that the founders were anonymous.
Tokens of Ethereum platforms which didn’t add massive yield farming incentives like MKR and UNI are outperforming.
Onwards Without Blue Kirby
So what happens with Off Blue now? As illustrated in the now-removed manifesto, the goal of the project is to create a decentralized Sotheby’s, leveraging Web3 primitives like token-permissioned gates to restrict auction access to those holding a predefined amount of tokens. Off Blue will continue on without Kirby.
It remains to be seen whether Off Blue can survive the fall of Blue Kirby, and whether the community is as quick as it once was to “ape” into anonymously founded projects.
Let this also serve as a reminder that the exponential growth of public profiles comes with positive and negative side effects. In this case the community saw those play out firsthand over the course of a week through the rise and fall of DeFi’s most memorable meme account to date.