With NFT prices out of control and wealthy whales squeezing out would-be buyers, collectors are banding together in a newly launched project that lets them pool their capital to bid on works.
It’s called PartyBid, and during its public launch on Aug. 4 the action got intense as a coveted CryptoPunk hit the auction block. Discord was popping as buyers urged friends to join the bid for Punks, which have been selling north of $125K.
Party of the Living Dead, a group of 478 members, formed to buy the Punk. The party placed six bids in 24 hours, jumping from 500 ETH to 945 ETH. Then in the final hour of the auction, a rival wallet swept in with a bid of 1,090 ETH.
“We need a hero, we need the dude at the party who shows up with another keg,” quipped John Palmer, project lead for PartyBid.
Party of the Living Dead hit the tap with a whopping 1,144.5 ETH bid, worth $3.2M, and won CryptoPunk 2066.
The auction was a splashy start for PartyBid. Led by project lead John Palmer and managed by an Ethereum blockchain-based organization called PartyDAO, the venture is landing in a frothy NFT scene. Demand for avatars such as Bored Ape Yacht Club, Wicked Craniums, and CryptoPunks, the OG in the space, is exploding. So, too, is NFT artwork, with savvy collectors scooping up groundbreaking pieces from Art Blocks in recent weeks.
PartyBid is set up to give would-be buyers hope they, too, can own a Punk or another NFT. Or at least a piece of one. Buyers band together in DAOs, called parties, and purchase fractional ownership, which is prorated according to how many ETH they contribute at auction. There are already 29 DAOs set up to participate.
Trevor Frederick, whose cultural membership project, Friends with Benefits, produced one of the first NFTs bought with PartyBid during its pre-launch phase, believes fractionalized NFTs provide a novel way to organize people. “Allowing communities to come together and outbid whales to support artists and artworks they love is an incredible origin story,” he told The Defiant. “It creates a connective tissue that acts as a design space for all kinds of interesting applications.”
PartyBid limits contributions to ETH. Anyone who sends ETH to a party which wins a bid will receive ERC-20 tokens representing the NFT and proportional to their contribution. If users’ ETH isn’t spent on the winning bid, or the party doesn’t win the auction, users can reclaim their contribution, minus gas fees.
PartyBid germinated with a tweet from Dave White, research partner at Paradigm, a crypto investment firm. “It’s Friday night, let’s build a mechanism together!” tweeted White, asking people for DeFi and NFT ideas to jam on. He got a response from someone who goes by the handle d.mirror.xyz on Twitter. This person sketched out PartyBid’s basic mechanics. From there, Paradigm researcher Anish Agnihotri did an initial implementation, and shortly afterwards, PartyDAO raised funds to build the PartyBid platform.
Now, with Party of the Living Dead picking up CryptoPunk 2066 with ownership fractionalized across more than 400 members, the party is just getting started.