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Pulling that rug

Promises of Chia NFTs abound, but are they real?

Posted on January 30, 2022January 30, 2022 by Chris Dupres

Not all the projects popping up promising Chia NFTs in exchange for a CAT when the standard is released will actually deliver the goods. That is a hard reality, and possibly a bit anticompetitive considering my association with one of them, but it is sadly true. After Space Marmots launched its pre-sale so successfully there were a number of copycat projects spring up right away. Marvelous Marmots is not counted in there, we consider them to be a contemporary, but immediately after our first pre-sale the new hotness was a CAT that would be eventually redeemable for an NFT of various flavours. But I think there are going to be some rugs pulled during this process.

The CAT Cambrian Explosion was set off because it became easy to mint a CAT and offer files launched making it very easy to trade them around for real XCH, or each other. Freddie is documenting the insanity happening at street level with these things at 1mojo.trade, and I am deeply worried a number of people without a ton of money and who are less sophisticated about scams are going to pour critical resources into a meme token that is quickly worth nothing. Because of the low trade price and volume on those things, its probably not going to be endemic to the ecosystem but it is a side effect to such low-friction transactions.

The thing that has me most worried, probably somewhat because my team kind of started it, is the fact that NFT projects are springing up like candy offering to sell a CAT that will be redeemable for an NFT once the standard launches in a few months. I don’t think each one of these projects is going to deliver. I think a lot of them will, but most of them are launching anonymously and we don’t even know if they are coming from inside the community or outside grifters looking to cash in.

Digital Spaceport recently put out a video on the subject, and I am going to embed that at the bottom of this post ad you should really go check it out (and subscribe if you haven’t already), but he really does go into a number of issues that I have with the entire ecosystem. There isn’t enough information being shared. And yes, Space Marmots isn’t immune to that with some terms and conditions we are still working on required for customers to make an informed decision. But some of the other projects we don’t even know who is behind them or if they can even deliver what they are promising.

Some, if not most, of the NFT projects popping up in the Chia space – and there are more every day – will certainly deliver something. But at least one I know of may run into IP rights issues and a few seem to be run by teams going to great lengths to stay anonymous with brand new discord accounts and Twitter handles that don’t seem to even follow or be associated with an original identity in the Chia Community.

The reason the Space Marmots and Marvelous Marmot presales went so well was because the community knows who both teams are. Both projects have team members that have been active in Chia for a year and both projects have a seriousness about them (while being appropriately silly) that I am confident, and would be as an outsider, that they will complete. That doesn’t mean the others won’t, but it would be a lot easier to evaluate that probability if we knew who was behind them. Until then my recommendation has to be to avoid pre-sales from teams you don’t know, even if in making that recommendation I am falling on the “bad” side of a conflict of interest. I just don’t want to see people getting screwed.

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3 thoughts on “Promises of Chia NFTs abound, but are they real?”

  1. Anonymous says:
    January 30, 2022 at 1:30 pm

    Test comment?

    Reply
  2. Anonymous says:
    January 30, 2022 at 1:58 pm

    There is one major issue in the Chia CAT space: people overestimate the value of low-effort CATs. It’s now a little over 2 weeks since offers were launched on the Chia network, and the ease of using them has caused a huge explosion of new CATs. I am completely blown away by the value that people put in these things.

    Granted – I have never been a fan of the NFT craze and I still can’t grasp why people would put so much actual money in that. What is the value of these art NFTs besides bragging rights?

    So about two weeks ago I started a little experiment: similar to 1mojo.trade I started a little project of my own. I hopped on every single airdrop I could find, getting a little bit of everything. In my mind, none of these CATs (except for USDS) has any actual value, so my prime directive was: do not invest any USDS or XCH. Just trade zero-value CATs for other zero-value CATs.

    We are currently still in the hype period of CATs and people overestimate what they might be worth. I agree with the article, that there may be some actors actually planning to pull the rug. But even the honest CATs (and I think SM1 belongs to those) are overvalued by a lot.

    What is the value proposition of these CATs? With the original Marmotcoin, there was a good cause behind it: donations for marmot foundations and other non-profits. A good thing. It started to go bad when MRMT was traded for far too much. I am glad that the Marmotcoin creators ended their program, because they probably see where all this would end: with a lot of tears.

    So what’s the value generated by newer CATs? Sure SM1 started with the same idea as MRMT. But as soon as the initial SM1 is purchased, the token generates no further value. It’s just there for people to speculate. The same goes for all other “valuable” assets, such as MMT, SPTN, TTT – and most of these don’t even have a good cause behind them. The only cause is to generate real value for their creators. It’s so easy to mint a new CAT and make it sparse so people perceive value. Then you start a Discord community which hypes the new CAT and people will pay enormously for your zero-value token.

    There are so many NFTs coming up in the Chia world – how can anyone expect these individual NFTs to have any value at all?

    I firmly believe that the whole explosion of NFTs and CATs is just a short-lived period which builds up a huge bubble. In a couple of weeks, people will realise that the sheer mass of these projects is causing the bubble to explode. Malicious CAT creators will dump the “high-value” CATs at low prices when they see the prices drop. This will also affect the prices for “honest CATs” such as SM1.

    So what about my personal journey? I decided to sell all CATs. I am keeping my CH21 and I quadrupled my SBX balance (because SBX is simply cool and it WILL become the intergalactic monetary standard). But in the process I also managed to double my XCH balance. Selling zero-value coins.

    Why would anyone pay that much XCH for that? Just don’t do it! Don’t spend anything of real value! In the next couple of weeks, reality will hit you and all your assets will be worthless. You’ll regret the XCH you spent.

    This is not financial advice. This is merely a plea for everyone involved to make conscious decisions. If you come to a different conclusion, that’s fine. Just don’t get invested into CAT trading without thinking about all this. You may regret it when the bubble bursts.

    Reply
    1. Anonymous says:
      January 30, 2022 at 2:00 pm

      Oh, by the way – I decided to donate all of my XCH earnings from CAT trades to a non-profit organization. It just doesn’t feel good profiting from the madness going on at the moment.

      Please: think before you trade!

      Reply

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