The frenzy for digital artwork is breaking new ground as one of the Internet’s best-known memes gets turned into a near $550 million asset overnight.
The DOG coin — a fraction of the non-fungible token depicting the famous Doge meme — has doubled in value in less than 24 hours of trading, according to CoinGecko data. That makes it one of the most valuable NFTs yet.
PleasrDAO, the art collective that bought the NFT for about $4 million in June, started offering fractionalized ownership in the form of $DOG on Wednesday.
The image of the Shiba Inu breed from Japan gave birth to Dogecoin — the joke cryptocurrency that boomed to as much as $95 billion earlier this year in a rally that captivated Wall Street.
With 17 billion in existence, each DOG coin is worth about 3 cents and about one-fifth is in circulation, while 55% is owned by the original buyer.
These are all signs of a market going bananas, after total NFT volume surged more than 10-fold last month to $3 billion on OpenSea. It’s also fodder for critics who see pump-and-dump risks rampant across the industry, where success is primarily driven by social-media hype and ownership can sometimes be concentrated in the hands of a few holders.
While the assets are by definition unique, traders can now speculate on fractionalized tokens, or shares of NFTs, that are traded on popular decentralized exchanges like Uniswap and Sushiswap. Put another way, owning a $DOG coin is a bit like buying a chunk of an artwork that you can trade on the Nasdaq.
In another case of NFT mania, the latest Internet favorite is Loot (for Adventurers), a collection of images of texts naming a random assortment of items in video games — anything from gloves to a dragon’s crown. (Really.)
Now the fourth-most actively traded collection on the OpenSea exchange, the Loot series has seen its average price soar from about 0.07 ETH a week ago to 22.1 ETH, or about $87,715.
On Thursday, an affiliated project had a surprise for fans: Every owner of Loot was given free tokens known as Adventure Gold, like a swag bag for party goers that is almost akin to a dividend from nowhere. As of Friday, those tokens — assets distinct from the NFTs themselves — were worth $500 million.
These rallies can be immensely profitable to early fans, akin to allocations to hot initial public offerings. Better yet for the early birds, the NFTs — which were created by Dom Hofmann, the co-founder of the now-defunct video-sharing site Vine — were initially minted for free other than the Ethereum network’s transaction fee.
That the Adventure Gold tokens and Loot NFTs confer no apparent privileges at the get-go hasn’t undercut demand. The community now gets to decide what to do with the assets, the pitch goes.
The biggest owner of Loot owned 303 pieces, at least some of which were acquired in the initial minting process, wallet and Dune Analytics data show. They also hold about 1.3 million Adventure Gold — now worth a cool $7.3 million.
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