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Yuga Labs Under SEC Investigation

Currency By Damien Hirst + Solsteads Update

Author

Gannon Breslin
October 12, 2022

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gm, we hope everyone is having a good week so far 😊

  • Kooks NFT by world-renowned artist Terry Urban has just announced its mint day on October 27th. Streetlab.io and The Drop are partners with the project!

  • The vocalist of Avenged Sevenfold, Matt Shadows is known for being into NFTs and holds a Cryptopunk. The band is hosting a token-gated Halloween event. (@DeathbatsClub)

  • Solana NFT collection DeGods drop their royalty to zero. (DT)

  • CNN is shutting down its NFT marketplace and offering a refund to users. (CT)

  • Artist Damien Hirst conducts real-life burn of art that was sold digitally rather than physically. More on that is below.

  •  BAYC is being checked out by SEC for reasons unclear. (coindesk)

  • One of America's oldest banks has jumped aboard the cryptocurrency train, allowing investment options and secure Digital Asset Custody. (@BNYMellon)

  • Egghead Jones, a new PFP project spawned from Loveless City dropped yesterday. (@loveless_city)

  • The Metaplex Foundation approves a collector airdrop of 40 million $MPLX to Solana NFT creators. (@MetaplexFndn)

  • Parrot launches the first-ever NFT copy trading platform. A place where you can find good NFT traders, subscribe to them and get notified of their plays. (@ParrotTools)

SEC Yuga Labs Investigation 🔎

Last week, The Drop covered Senator Bill Hagerty’s effort to push legislation that would provide a safe haven for any digital asset under the scrutiny of the SEC. The SEC’s most recent decision to investigate Yuga Labs demonstrates precisely the antics the legislation was attempting to defend digital asset entities from. This will be one among countless scores of similar offenses wherein the SEC accuses a digital asset of behaving more like a security than a digital asset. This will likely be a lengthy and costly legal dispute, much like what XRP has endured in recent years.

At the center of the SEC’s probe is the more general question of whether NFTs are securities. They are also allegedly looking into Yuga’s ApeCoins, which have dropped nearly 10% since reports about the SEC investigation have surfaced on the web. This news is generally annoying to almost anyone in the crypto community and especially those that aren’t happy with how the SEC continues to demonstrate disciplining moves over the decentralized space. But on a brighter note, Yuga Labs is a well-resourced and well-administrated entity so it is good that they are under the SEC's probe rather than anyone else - with A16z and other huge firms backing Yuga they will be able to put up a good fight.

The Currency Burning Has Begun 🔥

In the modern world, art is subjective. While art can come in the form of a painting or a sculpture, sometimes, the art is in the performance of creating, said, art. Back in 2021, a prolific artist by the name of Damien Hirst released a 10,000-piece collection called The Currency. At a price of $2000 per NFT, the project netted over $20 million just from the initial sale. People would think that we would be finished, and Hirst would work on another venture. But with artists like Damien Hirst, there is always a twist, and with Currency, it was the option for the owner to either receive a physical artwork of their NFT or burn the physical copy to only have an NFT. Yes, burn. Like, actually burn.

This week, Hirst live-streamed the first 1,000 physical paintings being burned at London's Newport Street Gallery. To ensure authenticity and record of actually burning every single painting, he would log its unique code by showing it to the camera, thus destroying a physical token to completely digitalize it. And of the 10,000-piece collection, 4,851 are designated to only be NFTs, thus taking the collection up to around 50% “only-NFTs”. Damien said while burning, “I’m an artist, not a money-ist… I’m not burning my art. I’m turning them into NFTs”. To think that potential millions are just being turned to dust and ash, begs the question: is this what art should look like? WAGMI.

Solsteads Update

As part of the restructuring process, the Soldteads & Citizens team has offered an active ear to the feedback from the Solsteads community concerning the dwindling excitement around the project for the past several months. The project’s acquisition by SolportTom in late February of this year has been more focused on building its own metaverse and game, which indicates the beginning of a new direction for the holders. The team last month announced that they will be putting less of their full-time focus on gaming, and more focus on short-term deliverables. With the hope that these short-term deliverables will help the community see the work behind the scenes, the Solsteads team dropped the box claim earlier this week.

The team further indicated their plan to have pivoted their internal team to focus more on this cause, and their preparation in case the 0% creator royalties meta sets in sooner than expected. More so, there are plans made by the team which is already in motion to pivot into more revenue-based products under SolSteads, and "borrow" the legal framework for Taiyo Robotics the sister project for legal holder distributions. A strategy that will give Solsteads a good-standing revenue which holders can also benefit from.

Sponsored Content: The Drop is an advisor for Kooks NFT by Terry Urban.

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Disclaimer: The Drop DOES NOT provide financial advice. All content is for informational purposes only. The Drop is not a registered investment, legal, or tax advisor or a broker/dealer. Trading any crypto-related asset is extremely risky and could result in significant capital losses.

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