Meebits’ $1.4M Sale Has Crypto Artists Calling Bubble

meebits
Sillytuna’s Meebits Skeleton

Meebits has everything an NFT investor could ask for ––random computer-generated traits to assign uniqueness and scarcity, the pedigree of the CryptoPunks maker and their community, and extremely cool-looking creatures many crypto enthusiasts would want to have as an avatar.

But is that all worth $1.4M for a single token? Artists in the NFT community say the staggering sums and frenzied trading are the latest sign the market is overheating.

This week, CryptoPunks and Autoglyphs creator Larva Labs released Meebits, its latest NFT collectible collection, and it is already a great success. 

Larva Labs launched Meebits on May 3 with 20,000 characters. Free characters were reserved for current CryptoPunks and Autoglyphs owners. 9,000 were released in the public sale. Larva Labs used a Dutch auction format starting at 2.5 ETH for all available Meebits. Though a Dutch auction leads to decreasing prices over a specific time period, all Meebits were quickly sold out in less than 6 hours.

The take for Larva Labs was nearly $80 million and secondary sellers quickly locked in enormous gains. For example, the next day OpenSea reported that a single Meebits character that would have initially sold for less than 3 ETH broke its highest single item sales record at 420 ETH, or over $1.43 million at the time of writing.

OpenSea’s Highest Single Sales Record Broken by a Meebit

In less than a week, Meebits is the 8th most successful NFT project of all time based on secondary sales volume, according to DappRadar.

In some respects, the outsized success of Meebits is not surprising. Larva Labs is particularly known for its early NFT collectible phenomenon CryptoPunks which has steadily grown in value since its launch in June 2017. In the booming first quarter of 2021, CryptoPunks was second only to NBA Top Shot in market volume.

Next week a select group of CryptoPunks will be auctioned by Christie’s giving the collectibles collection a unique seal of approval among NFTs previously attained only by the crypto artists Beeple and Murat Pak.

Larva Labs also took a well thought-out approach to the creation of the collectibles as described on its website. The 3d design draws on popular attributes with a broad range of unique details creating rarity. Such details include limited numbers of generative tattoo patterns and skull heads. 

3D Avatars

Beyond basic character design, Larva Labs noted the widespread use of CryptoPunks as 2d social media avatars. Meebits is intended to be the leading “3D avatar for virtual worlds, games, and VR.” To achieve this goal, the company will soon release an asset pack that will support character animation in virtual worlds. In enthusiasts’ terms, Meebits are designed to be the preferred identity in the Metaverse.

Larva Labs drew in its community by releasing free Meebits characters to current owners of CryptoPunks and Autoglyphs. This move engaged fans of Larva Labs previous NFT collectibles by requiring them to prove their ownership of a CryptoPunks or Autoglyphs character and then to mint a Meebits character. At that point the collecting process was initiated thus encouraging further purchases.

Sillytuna’s Initial Meebits Purchases

The highly engaged and supportive community that has grown around Larva Labs collectibles was further engaged by NFT influencers. Prolific NFT journalist William M. Peaster wrote about the project in glowing terms prior to the release of significant details. Megacollector Pranksy announced his intention to spend $1 million on Meebits the day of the sale. And, as attention turned to secondary market sales, collectors shared their purchases on social media.

Yet even with this array of reasons for Meebits’ success, the most recent resale prices as of this writing may seem excessive. For example, the current top three on OpenSea include Meebit #8598 which last sold at 420 ETH, Meebit #2948 which last sold at 400 ETH and Meebit #776 which last sold at 390 ETH.

One Collector’s Take

A game producer, who goes by the online name of Sillytuna, shared his perspective on the perceived value of Meebits in an interview. Sillytuna is currently funding and producing Claymatics‘ Clodhoppers and has a 26 year history in the games industry. His collection currently includes 15 Meebits with the most expensive a skeleton purchased for 100 ETH.

Sillytuna said he expects the most rare Meebits to gain in value while long-term gains will depend on how well the digital characters adapt to the virtual reality space. The “vast majority of collectibles are rubbish” but “good design combined with good release combined with good community will win out,” he stated, adding that collecting Meebits is a “no brainer in one sense.”

Ultimately, Sillytuna maintains game studios and metaverse creators will need to evaluate the technical issues before it becomes clear how well the characters can be integrated into third party platforms. Sillytuna’s initial purchases indicate that he does feel Meebits have short-term value at the very least. Yet he also points out that their long-term role as 3d avatars in virtual worlds remains contingent on not fully evaluated technical concerns.

Degen Tactics

Many crypto artists took a dimmer view of the Meebits sale coming on the heels of a series of overheated sales of NFT collectibles. One artist balked at the starting price of 2.5 ETH characterizing it as “some crazy rich people stuff.” Gisel X Flores urged caution tweeting that,

“These hot or not collecting situations are training each other not to think & just buy. It will backfire on the community… especially the ones who are not in the ‘know’ but follow.”

ROBNESS, a highly outspoken crypto artist, made even stronger claims regarding Meebits and related sales of NFT collectibles:

ROBNESS Warns Collectors of a Bubble

His colorful characterisation of collectibles as “Degen trading instruments” focuses on the rapid fire shifts by collectors from one release to the next. ROBNESS stated in an interview that he first “started noticing it after CryptoPunks valuations got absurd.” He maintained that the “hype of that spurred a ton of generative collectible attempts” as well as searches for “long forgotten ones like MoonCats.”

Recent releases of NFT collectibles that caught fire include the rediscovered MoonCats, with a trading volume of over $9 million in the first seven days, the Bored Ape Yacht Club, which did $7.3 million in volume in its first week, and Hashmasks, which sold around $10 million in four days. Each release was characterized by a great deal of anticipation indicated by social media chatter, a fast initial sale and heated secondary sales.

A more technical analysis might reveal further examples of Degen-style trading tactics, but the key takeaway is that many are concerned about the possibility of an NFT collectibles bubble in the making. Whether the current phase of trading will reach full bubble status remains to be seen.

While there’s no clear valuation model for NFTs, collectors like Sillytuna are taking into account design, release and community, to try to predict which pieces will retain their value in the long-term. For some, Meebits may qualify but sorting out the winners and losers beyond immediate pump and dump tactics will require collectors to, as always, do their own research.

[CORRECTED 5/6 @ 9:40AM TO REFLECT CRYPTOPUNKS TO BE AUCTIONED AT CHRISTIE’S AND SILLYTUNA’S YEARS IN THE INDUSTRY]

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