First off, thanks to @alexhughsam for the substack recommendation, seems like a decent option for this report. My name is Ryan/InSight, I’m 22 and specialize in Fixed Income analysis, specifically focused around high yield and bank loans, where default analysis and the feasibility of business plans take center stage. I joined NFTs through @AuroryProject, and have been participating within this space for around a year now. Over this time, I started as a normal minter/community member, and as I wanted to start having an actual impact transitioned towards being a moderator. Although that stage of my life is over, as I would prefer any future NFT/Web 3 related roles to be core team responsibilities, the one thing that has remained constant has been that I write about personal topics of interest. Whether that be the economy, SOL/ETH NFT projects, or broad space outlooks, if its interesting I’ll be writing about it.
InSight @InSightRHHow the fuck I make well over 50x my investment in less that 24 hours. NFTs stupid easy bro why do I trade stocks
Today, I’ll be writing something that requires a bit more space than a regular Twitter thread, I want to dive into Azuki’s first 8+ months of operation. This will help me internalize what I liked, what I didn’t like, and what I want to see going forward. I hope that anyone who reads this all the way through is able to get something out of it. Brief disclaimer, I worked as a moderator for Azuki for around 4 months at the start of this year, and would consider myself close with many members of the team. With this in mind, there is always room for bias, but I hope the quality of this report alleviates any potential concerns.
As we get into the actual analysis of this report, here is the outline:
Shilling of a certain Japanese made television production
Timeline Up to Now:
11/15/2021: Azuki Discord Officially opens, paired with this tweet
12/10/2021: The Azuki Manifesto is released
12/22/2021: Azuki.com is first shared to the public
1/03/2022: The Mindmap is revealed, including the unique “Connect Your Mind”
1/06/2022: ERC721A, Azuki’s crowning achievement in smart contract innovation, is released
1/09/2022: Shao, JD, Zero, and Raizan are established as the 4 Main Characters of Azuki. Also my little brother’s birthday, happy birthday Jack!
1/12/2022: Azuki successfully mints out, at a Dutch Auction price of 1 ETH
1/20/2022: The collection reveals, including the surprise Golden Mode
3/06/2022: Bobu successfully fractionalizes, representing the first expansion of the Azuki Collection
3/30/2022: The Garden Party, home to the memorable, “Check Your Wallets”
4/02/2022: Announcement of BEANZ
4/15/2022: Epik High, in collaboration with Azuki, performs during Coachella
4/27/2022: Bobu goes to space in collaboration with STELLAR
5/09/2022: Zagabond publishes “A Builder’s Journey,” highlighting previously unsuccessful projects that he, and other members of the team, worked on
5/20/2022: Azuki holders are airdropped a Twin Tigers Jacket NFT, to be redeemed in the future for a free physical piece
6/23/2022 - 6/24/2022: Enter the Alley event, Z officially doxes, and gives me a hug
7/19/2022: The Twin Tigers Jacket NFT claim begins
8/23/2022: The Alley launches
When one refers to performance, the first thing that usually comes to mind is “what happened to the floor price?”
To get this out of the way as quick as possible, as nothing bores me more than what the floor is doing, Azuki has been one of, if not the most volatile Blue Chip NFT project throughout 2022.
The collection saw initial hype-driven price success due to incredibly high quality art, the charismatic Chiru Labs team, Daph creating what was widely accepted as the premier discord community within NFTs, and the collapse of 0n1 Force, leaving a market gap for a high quality anime stylized PFP collection. Personally, I believe a key reason towards Azuki’s early success was the existence of a competitor, that was actually much bigger than Azuki during the run up to launch, HAPE. While Azuki’s community radiated a relaxed environment, where people mainly just hung out and talked about their love for blue beans, HAPE was one of the largest and most active discords in the history of NFTs, with a near 10 ETH post-mint floor proving just how desired the next ape in the jungle was. As a result of this, discord grinders, which have become the bane of many projects over 2022, gravitated towards HAPE (The current largest grinder group was actually started in the HAPE discord), whereas Azuki was allowed to naturally cultivate a community.
Moving onto the violence of price moves that Azuki experienced, two key moments come to mind. The Garden Party, as well as the release of “A Builder’s Journey”. Leading up to the Garden Party, not-so-subtle supreme imagery, and a conspicuous “Zagabond Announcement” spawned mass excitement within the Azuki community. Not only was this the first official in person event for the project, but the enigmatic leader was going to share something crazy. A mid-low 10’s project ballooned to over 20 ETH, and following the famous “Check Your Wallets”, Azuki NFTs reached around 35 ETH in floor price. With 2 “Somethings” per Azuki NFT, and these trading around 7 ETH as well, the total value of holding 1 Azuki into the event peaked at around 50 ETH, something never before seen outside of the apes. Euphoria hit the Azuki community, boxes revealing dirt were seen as brilliant marketing, and Twitter was full of people exclaiming that they had bought/sold a picture of literal dirt for greater than $20,000. This couple week period was the greatest peak in Azuki’s year so far.
Moving onto the bad, I want to specifically add some more context. Terra was failing, the USDT peg had officially failed, and millions of dollars were lost throughout the community. NFT prices across the board were falling, and Azuki specifically had just fallen under 20ETH for the first time in months. Then, Zagabond tweeted something that still to this day has people asking for him to be removed from the team, “A Builder’s Journey”.
To be clear, I think Zagabond should remain on the team, and believe his now infamous “learnings” that he took from Phunks, Zunks, and Tendies are, in a vacuum, beneficial to the operational ability of Azuki moving forward, and have already been seen in certain releases. However, on a day where Azuki holders were already hurting, this tweet brought the Azuki floor down to below 6 ETH. Holders were stunned, and those jealous of the success of Azuki were given that much more ammunition to attack the project. Many NFTs changed hands, with the >1000 trades on May 10th marking the largest day of trade volume in Azuki’s short history. However, many holders remained steadfast in their support, citing that even though they may not agree with Z’s actions, Azuki was now bigger than him, and was home to one of the strongest communities within web3. The floor quickly rebounded to around 15 ETH, before continuing the steady path lower that all large projects have seen over the past few months, with macro economic issues taking precedence.
Now, taking a price agnostic approach, let’s dive into my analysis surrounding Chiru Labs’ performance so far this year.
The Azuki website release solidified the project as a player to watch. The smooth design, incredible art, and high quality soundtrack changed the entire way the NFT space ships websites for their respective projects, in the exact same way the release of ERC721A changed the way projects minted NFTs. Following Azuki.com going live, almost all high profile projects have in some way, shape, or form copied from the site’s design. Hoshiboy deserves all the credit in the world for this achievement. When it comes to the website, I won’t really be providing any critiques, as its not my place and I don’t really understand the technical side. I will say; however, that the “Owned By All” section of the website is incredibly stale, and the “Created By Many” section doesn’t make sense, with Rose/Feb.tea being added recently, but still no mention of whizwang, who I would imagine outranks both given she is the Head of Growth.
I want to highlight the first tangible tweet regarding what’s coming soon that I have never seen addressed, apologies if they have and I just missed them.
Out of this list, only 1 thing has actually happened. You can kinda say that the Twin Tigers Jacket knocks off “Drop No. 1”, however we all know this wasn’t the plan. The first drop was 100% supposed to feature the signature Azuki track jacket as well as an off-white hoodie, shown here. It was also announced that the custom discord experience was much harder than expected, and they were experiencing some delays. However, at this point I doubt this is ever happening. Although Bobu has been a glowing success, with my dude hanging out drinking space sake, positive price action allowed some of these other mishaps to be heavily overlooked.
Keeping discord experience in mind, the Azuki discord has gone through multiple iterations, some very successful and some very unsuccessful, and luckily I had a front row seat to these changes. Prior to mint, Azuki’s discord was by far the best place to hang out in NFTs. There were no obligations, people went into any channel they wanted to just hang, whether that be the kissaten, anime chat, learn japanese, or just ol’ reliable general chat.
However, after some time things started going downhill within the discord. This firmly lines up with when mods became contracted. I can understand the intentions behind some of the changes made; NFT projects were getting hit one after another, scams were rampant, and legacy communities were trying to throw off Azuki’s breakneck pace. However, interactions became incredibly robotic, leashes were very short, and the average community member was not having fun. It became so bad that tweets criticizing the discord regularly reached upwards of 1,000 likes, and combat between the Azuki faithful and less active members became a daily occurrence. Personally, it felt like shit, and this was something I voiced multiple times. The role of a mod, which should always be something that is energizing and fun, turned into a corporate role. Mods were expected to leave behind their established online presence, and only join other servers on an alt account with no relation to their mod ID, and inside the server type multiple copy/paste messages into every channel at least once an hour. I originally thought it wasn’t really that big of a deal, until I was called out for only sending the automated messages 3 times during my 4 hour shift. In response to this, the community team made much needed changes, and I have seen the Discord move in a much more positive direction.
The Azuki discord will never be the same as it was in the beginning. We completely killed the blue bean movement within the main discord, as many were completely put off by the discord changes and migrated to Blue Bean Fam, probably the most active private discord containing Azuki OGs. I will always miss the days of creative beans using their insane abilities to wage war with us blue beans, and us making Les do all the work for us because he is the only artistically talented amongst us. Most of the valuable conversations and content has already moved to Twitter (Azuki Love Island, Art Contests, Twitter Spaces), but the ability for the team to own the fact that they were wrong, and work towards improving is a much needed skill that will be beneficial moving forward.
For a team with no designated marketing experience, Chiru Labs is amazing at selling things and building mystique. To the point where a large portion of the community thought that something labeled BEANZ, with images shared of small cartoon bean companions, had no chance of actually being BEANZ. We had Supreme, Shonen Jump, and everything in-between attributed to being the second Azuki collection. This took away heavily from the magic of the BEANZ release. Azuki’s mint and ensuing reveal was perfection, Bobu was another incredible experience, and yet BEANZ was marred by people being shocked that what actually revealed in a collection called BEANZ…. were beans. I hope the team can learn from this experience, and understand the gravity of their actions. The Supreme stylized LA flyover was a incredible marketing piece, and just an overall cool thing to see, but this homage would obviously draw supreme collaboration rumors. From speaking to numerous people, including Z in OB chat, they were not aware that people would make this connection that drastically from that video, and I hope we can see the team be a little bit more deliberate in this approach moving forward.
In some positive news, I can clearly see this deliberate approach reflected in the launch of the World section of the Azuki website. While there are a multitude of fun easter eggs, and as always the music is incredible, there is a distinct lack of misdirection, especially towards non-Azuki affiliated brands. I think this is incredibly smart moving forward. Everyone loves superme, but right before a key release, and in tandem with an homage to supreme video release might not be the best for consistent expectation management.
In terms of pure execution, there is not one project on the planet that has executed events as well as Azuki has so far. The project prides themselves on providing an immersive experience, and although I can’t comment on LA as I didn’t attend, NYC was absolutely incredible. The mix of a great venue, good music, and supporting local business was stunning. By the way, I’m in the below video if you can find me :)
The only comment I have here is regarding the LA event, given that many who RSVP’d to the event, even some that traveled the world to attend, were not able to actually go inside due to overbooking. I wouldn’t slate Azuki for this issue though, as the actual max capacity for the venue was lower than advertised to the team by management. I could spend days and I wouldn’t find anything wrong with the NYC event, outside of it probably costing an absolute fortune and not coinciding with any key development of the Azuki brand. However, given a short analysis of the companies financial situation, I’d estimate the party was likely around 5 million, and shouldn't be massively detrimental to funding as long as they aren’t a regular occurrence.
Empowering the Community
Moving from strength to strength, no one deserves more credit for Azuki’s continued relevance over the past 6 months than the Britney Spears maxi himself Demna. The point-person on Bobu, and key bridge between core team and community, Demna has endeared himself to the community, and always finds himself at the forefront of community initiatives like Azuki Love Island, Yo, and any community driven IP development. He also hosts a very regular check in call with the Original Beans, where it genuinely comes across that he wants to learn what we have to say, and our thoughts on how we see brands working towards decentralization. Who would have thought that someone who hates NFTs would spend some much time talking to NFT degens on twitter and discord. In the off chance that someone here is interested in developing either their own IP in relation to Azuki/BEANZ, or is even a bobu holder that just wants to chat, there is no better person to try and schedule time with than Demna, please check out the below.
Although there are a number of other things that can be touched on, albeit smaller scale, in regards to past performance, I’m going to leave this section here, and touch on some of those points in the Outlook section.
Future Considerations and Community Activation
Moving on to my future outlook, as is on brand for Azuki the future isn’t really clear. The mantras of “Dope Shit Only” and “Trust the Process” have been evident as the team starts working on activations with longer term time horizons, and they fervently avoid the use of external deadlines until the product is absolutely ready to be shipped. Recently, the team tweeted the below, playing into a community shift towards IP leverage.
I see community anime/manga content being a driving force of community interaction over the next 6 months. Given the team’s focus on high quality end products, I sincerely doubt anything official in this camp until at least the end of 2023, more likely 2024. This desire for animanga content will engulf Azuki whether the team likes it or not, as the premier community for animanga fans, everyone wants to see an actual anime that they had some part in the creation of. This also presents the most significant long term risk for Azuki in my opinion. Although incredibly challenged out of the gates, Isekai Meta producing a high quality anime production would bleed into Azuki’s market share, and result in the project losing its allure as an “anime NFT project” if they have no actual anime product.
Events and Key Announcements
Some more tangible news to consider, the reveal of the world site leads me to 2 specific dates: September 23rd and October 14th. With the Adrian Cheng announcement following suit, I fully expect an activation involving K11 in Hong Kong to be one of these dates. Given both official events have been in the US, and the team has shown concerted interest in an Asian expansion given the onboarding of Feb.tea, Jay Chou being a celebrated Azuki holder, and Azuki main twitter tweets in Chinese. Now, in determining which date equates to K11, I think its fairly straight forward. There is absolutely no chance we see the Azuki team announce a global event with less than a month for the community to prepare travel arrangements, so the only logical choice is the 14th. As for the 23rd, I expect something on the digital end, potentially an expansion of the Alley into the Garden on the website. Another potential for the 23rd revolves around the sign hidden behind shao on the desktop version of the site. A mysterious “Yuki was here” sign, coupled with her email address might play into a more interactive storyline. I’ll let the Twitter detectives look further into these speculations.
Expansion has been top of mind for the Azuki team, as recently during the Demna interview with Location TBA, it was mentioned that the current focus is on a hiring a full time recruiter to assist with ramping up team growth. As the team cements itself further within Web3, and the platform as a whole continues working to solidify itself as a vital part of future technological innovation, I expect the team to grow around 50% towards 20 full time members by the end of 2023. We are now plenty far past the days of “active community member earns a spot through love for the project”, I expect top class talent joining the team, with experience in business development, art direction, and software engineering. It’s not everyday that you can find someone that can accomplish all 3, so I’ll give them a pass for now. I mean, there are only so many Feb.teas out there who can do everything on the planet at a high level.
The Azuki community is hitting terminal velocity. At this point, only minimal interaction is really needed from the core team in order to keep the community interacting with each other and producing high quality content. From a pure financial perspective, the amount spent by Azuki holders on derivatives by talented artists like Yuka Kamogawa, Haruko, Peeps, Samuel Gildas, Your Yeh, and many others dwarves many other projects total volume alone. As the quality of content continues to improve, I see the team gradually stepping back, and this explosive community growth to allow them to fully focus on longer term initiatives. Want to end this short section highlighting some of the best single members in the Azuki community, people that are incredibly responsible for the creation of one of the strongest and most resilient communities in NFTs. Of course this is not an exhaustive list, but these are the people I think about when I hear the words “Azuki Community”.
I’ll be ending this section as a more personal hope for the future. I hope to see the brand move towards something that is perpetually visible, not just on Twitter but in general throughout the public. I absolutely hate the comparison, but Supreme didn’t find success from just creating dope shit, fans of the brand blasted supreme logos all over New York, and skaters wore the absolutely shit out of the early clothing. I want to see Azuki refocus, and work on both physical and digital activations that have a high chance of market penetration. We are too young to start moving towards incredibly niche market demographics, and I think as a space, misunderstanding demographics has, and will continue to plague NFT projects’ growth.
In regards to the mindmap, I would love to see an update before the end of the year. It has been quite clear that the team’s core vision has been extremely fluid over the past 8+ months, and that is reflected in how vague the mindmap is. As the team starts to hone in on what they actually want to be, I’d love be able to see that in the mindmap getting more concrete. Regardless of all of that, its been too long since we had a concrete update there. The site hasn’t been updated since before the Bobu fractionalization, still shows Open Sea verification as “blocked” and IRL events as “In Progress”. As mentioned before, sometimes the timing of website changes makes absolutely no sense. I see no value in a website update adding Rose/Feb.tea, while whiz is still nowhere to be found, the map is stale, and mindmap is collecting dust. One thing to note about the current iteration of the mindmap is the “Redacted” section within “Bridge Between”. For it to be redacted at such an early stage, it has to be something incredible. I am really looking forward to what 6 months of development has in store for this line item, all while trying to temper expectations. The last time we saw “Redacted” in the mindmap was a Azuki x “Redacted” clothing collaboration that was removed in the latest update. This would be incredibly disappointing to see it happen a second time, but I’m currently leaning positive here.
One extreme positive, in my opinion, is the speed of community creation. I was very nervous that the mantra of “Dope Shit Only” was going to die when I saw the initial picture released for the Twin Tigers Jacket. It was very clear that the team didn’t do the checks necessary to see that the image looked horrible, and I think this was as a result of trying to rush out a product for the first time. We have already seen growth from launch to launch by the team, and I think the security that this community has fully bought into “Dope Shit Takes Time” will result in a slip up like this never taking place again. Luckily, the team responded incredibly quickly to this mistake, and updated the imagery to reflect the true quality of the clothing.
With all of this in mind, I am incredibly excited for the future of Azuki, and whatever that entails moving forward.
This section, albeit short, is incredibly important in my opinion. I will be writing down some questions for the team, and then slightly expanding on why they are important/necessary underneath. A number of them are incredibly personal, so you might disagree many some of my takes, but I still want to share them because they are important to me.
Who is Takeda?
Rehito’s announcement was huge, and provided credibility to the long term vision for BEANZ, seeing as Sanrio’s Hello Kitty attained worldwide success. In that case, why aren’t we announcing who Takeda is? This is slightly concerning to me, and makes me think that this person might not have the pedigree expected of someone joining Azuki to lead a certain business line. When thinking about NFTs, brands are becoming more and more important. Brands in fashion as well are insanely important; however, the designer is arguably as, if not more important. As the team attempts to scale, you will need to sell outside of our tiny little bubble that is web3. We need someone that will draw in regular people that like fashion, and I would love to be reassured by knowing who Takeda is.
I want to add, that I fully understand that a big name is not all that matters, and there are pros and cons to both approaches. This person was specifically brought into to build out the fashion arm of Azuki, something the rest of the core team has no experience in. For a brand that has mentioned clothing as a core driver of success, I would prefer in this case to have someone that already has somewhat of a pedigree. Adding an unestablished name just creates that much more operational risk, especially when its a risk that wouldn’t be necessary to take. At the end of the day, I hope the name is somewhat established, and Takeda is just being used as a moniker to play into the world building, rather than an unestablished designer that is getting a free development runway through the guise of lore.
Why, as a Japanese Anime Project, has the Asian focus so far not involved Japan?
I think this is pretty straight forward. I know the team is Chinese American, but the move immediately towards China/HK rather than trying to push into the home of the art style we are emulating was interesting. I know full well the power of HK whales in this space, and that can be seen given recent announcements surrounding Adrian Cheng owning over 100 Azuki, but I would love a push towards the roots of where the art came from. There are a number of elements core to the culture of Japan, specifically the Torii Gate that is has become a defining characteristic of Azuki. I would hate to see the culture behind these symbols not further developed or appreciated by the core team development.
When it comes to clothing, how do you plan to effectively bridge the gap between streetwear and high fashion? As it seems you are moving in both directions at this time.
I’m not going to sugarcoat that I was extremely disappointed when I saw the Emily Ghoul promo. A track jacket and a hoodie, both of which I had seen in mod chat, were now prototypes and wouldn’t be released. I was so excited to wear some genuinely good and high quality streetwear. Instead, in the year that Azuki has been around, the clothing we will received is the Twin Tiger Jacket. Don’t get me wrong, this jacket is incredibly high quality, but it’s also incredibly unwearable for the majority of your holder base. The vast majority of those I have spoken with redeemed a jacket, myself included, but included in that was a large group of people saying that they wouldn’t actually wear a bomber type jacket that flashy because they couldn’t pull it off. The whole situation made me think about an Off-White collection show, where I would think both “holy shit I need this” and “who the fk wears this stuff” at the same time. Unfortunately this drop ended with the latter, and I’m concerned it might be years before something Azuki related drops that I can actually feel comfortable wearing around.
In 10 years, when people think about Azuki, what should be the thing that comes to mind?
I feel like the answer to this question has changed multiple times over the last year. Will we be a clothing brand? multimedia franchise? entertainment brand? Right now, Azuki is poised to remain a legacy brand within NFTs and Web3 as a whole, how does the team plan on maintaining this image, and what do they think is required from a centralized team standpoint to achieve this? Would love to hear the current perspectives on this, and what caused the changes to materialize.
It’s already been established that you have a multiple year operational runway, what is the current plan for creating a revenue generating arm of Azuki?
I know “wen revenue” turned into some weird evolution of “wen utility”, in part spawned by influencers decided they somehow knew business development and how much things cost, but I do think no one not named Yuga Labs can exist by continuously selling NFTs to people.
The official art collaboration with MV3 mismatches with the formerly displayed vision for how Azuki handles partnerships. How did this link up happen? and how does this affect partnership methodology moving forward?
Azuki’s main blemish in my eyes is the inability to source and execute high quality collaborations within the NFT space. Pre-mint we had whiffs like Sneaky Vampire Syndicate, Pixelmon x2 (This was specifically asked to OB chat, and I vividly remember saying I didn’t like it, but hey what can you do), 0n1 Force, and the absolute worst being Yassuo, who advertised Azuki on his stream as free money. It seemed like things got incredibly strict in regards to collabs post-mint, but this move caught me completely off guard. Would love some more info outside of the stuff that everyone says about each other on every Twitter Space.
What is happening with the Alpha Beans?
I understand that the market is incredibly stale at the moment, but there hasn’t been a report in around 2 months, and yet we have seen a number of projects that deserve at least a report (Isekai Meta, Potatoz, Esion). Would love an update on what is the plan for Alpha Beans moving forward.
What happened to OB Benefits?
It was specifically mentioned by Location TBA that OB’s would be receiving benefits, and that if we were unhappy with the rate of progress he would happily remove us from OB. This was in March, and there has been no incremental benefit to being an OB in the time since that message. I understand that this is in no way TBA’s responsibility, and this could come of as grandstanding, but I feel the importance of OBs has been significantly underappreciated by the team at this time. Instead, I see the implementation of Garden Caretaker which, although it was mentioned it isn’t replacing OB, ranks above them on the sidebar. This may sound whiny, but myself as well as others have put thousands of hours into Azuki, and to hear from friends that it seems like certain people don’t want me to receive Garden Caretaker is incredibly disappointing. I feel like a piece of OB died that day back in March, as it became either we just be OBs and don’t raise any complaints, or we get kicked out. I’m all for the frequent OB hangs where I can raise topics to speak about, but I feel completely out of place in an environment perpetuated by other OBs that we should somehow feel grateful to just be OBs. Sometimes people need to internalize that they actually deserved something, and stop minimizing their presence and value
With all of what Azuki has publicly accomplished laid out before me, I feel incredibly grateful to be a part of such a community. However, as someone that continues to strive for perfection, I think the oft-mentioned execution ability of the team is holding Azuki back. Regularly seeing tweets referring Chiru Labs’ execution as “flawless” and “perfect” shows a lack of a critical eye. We should be holding our teams to the absolute highest standard, and make clear that there is always room for improvement. Not holding teams accountable for mistakes, and forgetting what went wrong eliminates the ability to learn from said mistakes, and continue to grow. That sort of stagnation is something I want to avoid at all costs, and I hope that this report was able to portray how much I love the project, while thinking about areas of growth that can be focused on further.
Thanks everyone for reading, I really appreciate it if you made it all the way through. I know this was a lot, but a lot happened since the Discord opened up in November. I think summarizing everything that happened, and getting my thoughts into words about what occurred, and what I want to see in the future was incredibly valuable for me. I hope you all were able to pick up some of that value too.
Watch 86 :)
In the Spirit of 86, I’ll be copying Asato Asato’s closing style, sharing what she listened to while writing.