Art

How anime character drawings have become a mega-popular collection in the NFT world

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On January 12, 2022, at 10:00 am, four 30-year-old entrepreneurs from Los Angeles released a collection of 8,700 NFT tokens with anime characters, better known as Azuki. The cost of one NFT token was $ 3400. The collection was completely sold out in just three minutes. At the same time, sales revenues exceeded $ 29 million.

A few days later, additional $ 2 million NFT tokens were sold in a private transaction. In just four weeks until February 11, 2022, the total volume of Azuki token transactions on several major NFT marketplaces, such as OpenSea Azuki’s most expensive digital artwork is now valued at $ 500 million. Cheaper can be purchased for $ 36,000. Over the past month, total sales of NFT tokens with characters from the new anime collection have surpassed much better NFT projects such as Bored Ape Yacht Club and CryptoPunks. The Azuki collection is currently the eighth best-selling NFT token in history.

Startup Chiru Labs, which developed the collection, receives royalties of 5% with each resale of NFT tokens with anime characters. This means that Chiru Labs received $ 15 million in royalties in addition to the $ 31 million raised during the initial public offering of the collection.

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The identities of the four founders of Chiru Labs are unknown. This is normal practice in the world of cryptocurrencies, which is obsessed with maintaining confidentiality. It is worth noting that recently revealed personalities two entrepreneurs from South Florida, who earned millions of dollars on the famous NFT project Bored Ape Yacht Club, which outraged users of the social network Twitter. However, the new – fifth – member of the Chiru Labs team is relatively well known, at least in the gaming industry.

This is 39-year-old conceptual artist Arnold Tsang, whose main activity two weeks ago was character design for the popular shooter Overwatch from Activision Blizzard. The number of users who have registered in this video game is currently 60 million. It is known that Azuki Tsang developed the collection in his spare time. Today, he officially joined Chiru Labs full-time as part of the brand expansion. Chiru Labs plans to release clothes and other merch with anime-style characters.

“We dream of maximizing Azuki’s intellectual property, that is, creating an animated series and possibly even video games and other kinds of merch,” says Tsang. He adds that his decision to reveal his identity and renounce anonymity is a “guarantee of trust.” “I am who I am. Here are my works. Trust me, I’m not going to escape to an uninhabited island, earning money, “- says the artist.

Tsang and the four founders of Chiru Labs are not the first to make money on the new NFT fever. There has been a real boom in the industry created just five years ago in the last year. Sales of tokens on the OpenSea NFT marketplace in January 2022 alone amounted to $ 5 billion. According to analysts from Nansen, the value of the CryptoPunk collection of 10,000 NFT tokens is now estimated at $ 4 billion, which exceeds the market value of a large department store chain Nordstrom Suite or the American tax company H&R Block. In addition, the NFT market is gray, with a potentially large number of fraudulent transactions. As a result recent investigation Reuters found that last month, 27 of the largest token deals worth more than $ 1 billion worth of token deals on the platform were made using just two online wallets. At the same time, only 16 online wallets were used to conduct the 100 largest NFT transactions on this marketplace.

According to the Chainalysis platform, more than 1,000 NFT collections are launched every month. It is still a mystery why only a few are very popular and most are failing. Chicago-based collector Andrew Steinvold, who heads the $ 100 million NFT investment fund and was able to buy several digital artworks from the Azuki collection, said the quality was “relatively high.” Other collectors note an unusually high degree of attention to detail on the Azuki website, where there are gallery with many filters resembling the functionality of the OpenSea NFT marketplace. Users can narrow the search parameters of the tokens they are interested in to criteria such as the type of hat, clothing or facial expression of the character. Chiru Labs has also released software open source, which allows you to purchase multiple NFT tokens and pay much less, because otherwise the cost of the commission can reach $ 300 for each transaction.

Why has the Azuki collection become so popular? Tsang suggests that the anime-style characters from the Azuki collection are a reflection of the “rebellious culture of skateboarders” that suits users from the world of cryptocurrencies and NFT tokens.

Another factor in the growing popularity of the Azuki collection is the delayed demand for anime-style art. In recent years, the streaming service Netflix has been working to increase the amount of anime content. At the end of 2020, representatives of the company announcedthat the number of users who watched anime series and movies on Netflix that year exceeded 100 million households. In August 2021, the NFT collection 0N1 Force in the style of anime was released. Less than two weeks after its release average price on digital artwork from this collection has grown from $ 1,500 to $ 30,000. However, since then, interest in the collection has declined sharply, and some users accused project leaders in improper leadership.

Even the creators of the Azuki collection seem a little puzzled and do not know the secret of the popularity of their digital art. One of the founders of Chiru Labs, better known by the amusing Internet pseudonym Zzzagabond, suspects that some of the most expensive NFT deals with the Azuki collection are the work of Asian investors. “I guess it’s Asian users who are seeing digital art for the first time that has really found a response in their hearts,” said Zzzagabond, a native of China. “I’ve talked to Asian investors several times and they’ve told me it’s their first experience buying NFT art.”

Zzzagabond is known to lead the distribution of the Azuki collection. According to him, he previously worked in the business of Google, and then worked for four years on a decentralized financial platform. However, he does not disclose which platform it is. Another founder of Chiru Labs, better known as Location Tba, says he used to be a developer on Facebook. The third founder of Chiru Labs, better known by the pseudonym Hoshiboy, notes that his startups have twice received funding from the Y Combinator business incubator.

Why did the founders of Chiru Labs decide to remain anonymous? “There is a certain mystique, magic and appeal in the fact that this project is not really related to us as individuals and our past experiences,” says Zzzagabond. “I think that in the end we will still face de-anonymization (disclosing someone’s identity on the Internet).”

When building a business, Chiru Labs plans to rely heavily on the Azuki brand, creating new sources of income in addition to royalties. At the end of February 2022, the company will launch the Azuki clothing collection, the first item of which will be a red jacket. The company’s long-term plans include entering the Hollywood market. Zzzagabond suggests that film studios may pay them for the right to use intellectual property. According to him, the Azuki collection will probably be able to inspire the image of a singer from the popular show The Masked Singer. In addition, Chiru Labs has outlined equally vague plans for the development of Azuki in the metaverse. After all, the founders of the startup should think that absolutely everything is possible, because in just a few weeks they earned $ 40 million from the sale of air.

Translated by Polina Shenoeva

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