What Will Doodles Do?

GM frens,

It's been another wild week in the Web3 world.

Besides Instagram announcing its plans to integrate NFTs into its platform that has over 1 billion monthly active users, Doodles — one of the hottest Web3 brands announced the addition of Julian Holguin (former CEO of Billboard) to its team.

In today’s edition of The Ground Floor we will be breaking down the past, the present, and the potential future of Doodles with this latest hire.

What Will Doodles Do?

Breaking down the past, the present and the potential future for Doodles…

The Genesis Of Doodles

Founded in September 2021, Doodles is a collection of 10,000 generative NFTs created by Evan Keast (Tulip), Scott Martin (Burnt Toast), and Jordan Castro (Poopie).

Prior to working on Doodles, this trio worked together on CryptoKitties — a very early NFT project developed by Canadian Web3 studio Dapper Labs.

Having already experienced the trials and tribulations of building an NFT project during their time at Dapper Labs, combined with Scott Martin’s extremely unique artistic style, the team was perfectly poised to launch Doodles on October 17th 2021.

Within 2 days of launching Doodles had already exceeded 5,000 sales on OpenSea with the Floor price having close to 10x within these first 48 hours.

Quality Over Quantity

One of the primary considerations the Doodles team has focused on since day 1 is avoiding diluting their existing holders by minting additional Doodles collections.

This should come as no surprise given the founding team's experience with CryptoKitties whereby one of the game’s key components was the ability to allow in game “breeding” which gave holders a cause to continue to engage with the project.

While this approach was considered innovative at the time, the end result was a significant surplus of supply — which significantly devalued the initial holders of this once highly prized NFT collection.

Nonetheless, despite their desire to avoid diluting existing holders, the Doodles team has provided genesis holders the option to effectively upgrade their Doodles with the introduction of Space Doodles in early March 2022.

To date 5,334 of the original collection have opted into upgrading their Doodles.

Another Cash Cow

In the very first edition of The Ground Floor we broke down how the founders of BAYC had built nothing short of a cash cow — earning over $170 million.

While the founders of Doodles haven’t quite crossed this threshold, they have successfully launched one of the most prized NFT projects in recent times with over 126,200 ETH in secondary sales netting the team some 6,310 ETH = ~ $14.8 million.

Nonetheless, it’s important to remember that 30,000 ETH of the 55,000+ ETH the BAYC team has earned came from the sale of 10,000 Mutant Apes.

Increasing Supply?

When Yuga Labs, the founders of BAYC released the MAYC collection the floor price of the BAYC collection was quickly closing in on 20 ETH — the exact same position Doodles currently finds itself in.

Doodles has also announced that holders will receive “a duplicator” later today, which would suggest Doodles will increase the available supply of Doodles NFTs, however, it remains unclear if Doodles would use such an opportunity to book additional revenue by selling a percentage of this potential new collection to the public?

Should they choose to pursue this path, we see no reason as to why Doodles couldn’t copy the playbook BAYC created when they sold 10,000 MAYC’s for 3 ETH each.

This single sale would net Doodles 30,0000 ETH — 6x their total revenue to date.

The Future For Doodles

Doodles remains one of the most recognizable profile pictures of any & all collections.

Nonetheless, the team has publicly declared their ambition to be much more than a collection of 10,000 NFT profile pictures.

Whereas once, it would be hard to entertain the idea that Doodles could make such a bmove into these areas — with the addition of Julian Holguin to their leadership team, Doodles now has both the talent & the finances needed to peruse any path they deem to be a good fit for their existing intellectual property.

Nonetheless, we haven’t seen a single NFT project successfully expand into any one of these areas such that it remains to be seen what such an expansion of the Doodles brand would look like should they successfully execute on this vision.

Looking Forward

A very important question to consider before buying into projects based on their stated ambitions is whether or not they have the team to bring their vision to life.

In the case of Doodles, we would be willing to wager based on their flawless execution to date — including the amazing experience they created with Shopify at South by Southwest in March 2022 that they will continue to find interesting ways to successfully expand their brand well beyond a 10,000 NFT collection.

Will such moves increase the value of the original Doodles collection?

Well, only time itself can reveal that answer.

3 Things You Need to Know

1) Azuki Bombs After Rug Allegations

Azuki, the 6th most traded NFT project ever, has bombed from a high of near 40 ETH, to current trading prices of 9 ETH. They dropped from above 30 ETH to under 10 ETH in a 48 hour period.

The reason?

One of their founders, who goes by Zagabond, admitted to being behind 3 ‘rugged’ projects; Zunks, Phunks and the lesser known Tendies.

From a plethora of blogs, threads and spaces both with and without Zagabond, it’s clear that the way they walked away from those projects left a sour taste in the mouth of respective community members.

A dark day for what looked like a blue chip NFT project in the making.

2) Instagram Launch NFT Support

Instagram is launching support for showcasing NFTs.

Artists will now be able to verifiably post NFTs that they’ve created and collectors will be able to do the same, linking to said artists.

Dipping their toes in the market? For now. But with 1 billion users…a lot more people are going to see NFTs for years to come.

3) A Market Crash…How Did NFTs Fare?

The markets are down, and NFTs haven’t been immune to this crash.

Why are the markets crashing, and why is crypto falling even faster?

The markets are crashing due to rising interest rates & the ongoing geopolitical tensions in Europe and much more.

In the case of crypto, many of the same people who have helped push crypto prices to all times highs last November are being forced to sell their positions to protect their portfolios which has created a cascading effect resulting in more & more people being forced to sell their potions as prices continue to fall.

To make matters worse, this week Luna — a once top 6 cryptocurrency by market cap lost over 99% of its value, moving from $90 to $0.02 courtesy of a surprise attack on the network which resulted in the attacker netting over $800 million within 48 hours.

We won’t go deep into it… but here’s a great thread that does.

Tweet of the Week

Kallaway is spot on here.

The NFT projects that double down on their convictions without any gimmicks will be the ones that last long term.

Community Update

This week, the Floor team presented the new partnerships tiers to the Floor community for feedback.

The community has already provided amazing feedback following this announcement!

Floor Community Meetups

Yesterday, the Floor team organized a meetup in New York City where community Floor members came together to chat about the 3-day Bear Market.

In total, 20+ people attended this meetup — making it the biggest one to date!

Thanks for the read,

See you next time! — 0B1, Pet & Corwin.

This newsletter is for informational purposes only and does not constitute financial or business advice to any person or entity.