Adidas’ debut “Into the Metaverse” NFT launch yesterday netted the company $23.4 million in a single afternoon.
According to CryptoSlam, the collection’s incredible sales volume over the last 24 hours has moved it to the top of the leaderboard as the hottest NFT project in the world right now.
The release cooperates between the Bored Ape Yacht Club (BAYC), PUNKS Comic NFT developer Pixel Vault, and private NFT collector gmoney. BAYC is presently the sixth largest collection by sales volume. In early December, Adidas initially revealed its ambitions when it purchased a Bored Ape and dressed it in Adidas clothing.
It was similar to a hot sneaker release
30,000 Adidas Originals NFTs were available, minted on the Ethereum blockchain, with 20,000 of them going to holders of Pixel Vault NFTs, Bored Ape or Mutant Ape NFTs, and gmoney or Adidas Originals POAPs, Ethereum-based proof of attendance badges.
Last month, the sportswear business tweeted about their strange POAP token, which didn’t appear to mark any specific event. Nonetheless, because this is crypto, individuals minted them anyhow, anticipating everything to become evident later.
When Adidas announced its early access offer, things became apparent. All 20,000 early access tokens were sold out in less than an afternoon.
This is when things start to get interesting. “Adidas and partners” kept 380 of the remaining 10,000 tokens for “future events” and released the remaining 9,620 to the general public with a limit of two per buyer. Those were sold out in a fraction of a second.
One customer got around the cap by installing a bespoke smart contract that generated 165 sub-smart contracts, each with its address, to mint two NFTs from Adidas’s smart contract in one transaction, then sent the 330 tokens to the creator’s main ETH account.
Montana Wong, a blockchain developer, provided a clear explanation of the process on Twitter.
According to Wong, the contract’s originator paid roughly $104,000 in gas expenses as well as around $252,000 for the NFTs to process it. Furthermore, because each NFT was sold for 0.2 ETH, the inventor wanted the value of the tokens to climb to 0.28 ETH to break even. Given that prices have risen to about 0.8 ETH, their efforts have now compensated for themselves three times over.
The contract’s creator publicly supported Wong’s reasoning in a tweet just hours after writing the thread.
The drop is fantastic news for Adidas, which has worked hard to establish a strong presence in the metaverse. As part of its metaverse goal, it announced a Coinbase alliance last month. Around the same time, The Sandbox, a Metaverse game, claimed that Adidas had purchased a plot of land for its use.
Those who were fortunate enough to obtain an Adidas NFT will have first access to Adidas wearables, both real and virtual when they launch in 2022; no doubt some exclusives will appear in The Sandbox.
In the Largest-ever NFT Drop, WAX will Distribute Ten Million Free NFTs
WAX will give out free NFTs to commemorate its success with a variety of companies on board and rising play-to-earn games.
Despite the recent NFT market surge, WAX has received little attention. Solana and Flow have both had considerable accomplishments in the field, but Ethereum has high-dollar, headline-grabbing sales and most of the overall trading volume.
Despite the lack of publicity, WAX has quietly racked up impressive numbers. It now has the greatest smart contract transaction volume of any network, with DappRadar having recently reported about 18 million daily transactions. In addition, major brands such as Funko, Mattel, AMC, and Sony Pictures have used it for NFT drops.
WAX—short for Worldwide Asset eXchange—has also recently passed the 10-million-to-11-million-total-wallet-accounts-on-the-platform-mark and will celebrate by airdropping a total of 10 million free NFT collectibles to those wallets. It’s the most significant single NFT drop to date, and the first 10 million WAX wallet holders will get it for free.
The free NFTs are distributed across ten different digital pins, commemorating a different period in WAX’s history. The 10 million NFTs jointly mark the platform’s success up to this moment, from its mainnet launch in 2019 to its carbon-neutral accreditation, and even its recent cooperation with AMC and Sony Pictures for “Spider-Man: No Way Home.”
WAX CEO and co-founder William Quigley told Decrypt that the company planned to commemorate the wallet’s one-year anniversary with a large-scale drop that would be unfeasible on other major platforms. While the airdrop represents WAX’s history, he also wants it to demonstrate to companies that they can use its platform to execute initiatives involving millions of NFTs.
“Most individuals familiar with NFTs recognize that minting Ethereum NFTs is slow and expensive,” he explained. “So we reasoned: Well, no one has ever attempted to make 10 million NFTs. We’ve only done about 2.5 million Topps MLB baseball cards, but even that much outnumber anything done by other chains.”
According to Quigley, WAX had roughly 500,000 registered members at the end of 2020, so the current 10 million record implies a 20-fold growth in users in just over a year. Furthermore, according to data from DappRadar, the larger NFT market surged considerably in 2021, going from over $100 million in trade volume in 2020 to $23 billion last year.
He said that minting 10 million NFTs on Ethereum’s mainnet would be too expensive and that the “chain would have collapsed” due to the network’s low transaction throughput. He also chastised competitor chains: Solana experienced extended downtime in September. In addition, Ethereum sidechain scaling solution Polygon recently suffered rising costs due to a now-defunct play-to-earn game called Sunflower Farmers.
On DappRadar’s list of the most popular decentralized applications (dapps) by user count, WAX offers several play-to-earn games and other applications. While increased demand can put WAX to the test, Quigley says the blockchain platform has stayed online and functional.
“We’ve made it through, although it’s been quite difficult at times. WAX is still standing, “he stated. “You’ve got chains like Solana and Polygon whose entire raison d’être is their ability to scale. And [Polygon] couldn’t even handle one of the most popular learn-to-play games. There isn’t one. And there are many of them.”
WAX plans ahead
According to Quigley, WAX’s growing reputation as a destination for brands—which includes Reebok, Mattel, Capcom, and Atari—is partly due to the platform’s scalability and inexpensive pricing. But it’s also because of his team’s experience working with brands, including his previous role as Chief Financial Officer of Disney’s licensing division.
“When we communicate to brands about intellectual property management, we speak their language,” Quigley said. “We can safeguard their brands, and a lot of it boils down to trust.”
He expects interest in WAX’s “vIRL” NFT format, which stands for “Virtual in Real Life,” to rise in the future. It’s essentially an NFT digital twin that can be redeemed for a physical version of the product, and companies like Funko and Mattel have already used it in projects.
It’s excellent for high-demand products like shoes and streetwear, according to Quigley, because it eliminates some of the expenses and environmental effects of shipping things through many parties before they reach the end-user.
He also anticipates increased crypto gaming activity on WAX, especially as the nascent play-to-earn genre matures and expands into more affluent, more appealing game experiences. He understands why AAA game companies have been chastised for launching in-game NFT products and believes that such items have yet to add value to games.
“A lot of gamers dislike NFTs because they see them as money grabs,” he stated. “When it comes to AAA titles, I’d say that’s not far off.”
In the end, he believes that conventional, big video game publishers will lose out in the play-to-earn market. Instead, indie developers will create games with NFTs at their core, considering how the technology benefits users and experiences.
He anticipates rapid and significant evolution, much as he did with mobile and browser-based games.
“Indie game creators who embrace this technology will start building games that progress from primitive–almost like DeFi mechanics rather than games—to full-fledged video games,” Quigley added. “It’s very much a work-to-earn situation right now—there isn’t a lot of playing. Finally, however, we will be able to play-to-earn.”
Mercedes-Benz Collaborates with NFT Artists to Commemorate the G-Class Series
Mercedes-Benz has enlisted the help of five NFT artists to create their unique interpretations of the G-Class.
According to a tweet from Mercedes, the luxury automaker has teamed up with Art2People to produce a unique Mercedes-Benz NFT collection based on its G-Class car line.
Five NFT artists were commissioned to create G-Class-inspired works in various media, each unique design.
Music, fashion, graphic design, architecture, creative marketing, luxury design, and real estate are participating artists. Charlotte Taylor, Anthony Authie, Roger Kilimanjaro, Baugasm, and Antoni Tudisco from Germany are among the artists. The NFTs will be launched on Sunday by Nifty Gateway and Mercedes.
Mercedes isn’t the first major manufacturer to experiment with NFTs. McLaren announced its aim to use NFTs to produce virtual copies of its renowned F1 cars in June 2021. In addition, Coca-Cola created a one-of-a-kind NFT campaign to collect money for Special Olympics International in July 2021.
Mercedes-Benz isn’t the first company to experiment with blockchain technology. The automaker has launched a trial with blockchain company Circulor to ensure that cobalt emissions are traced throughout the supply chain.
Participants in the NFT Market in the United States may Face Harsh Tax Penalties
As the NFT market grew in 2021, so did the tax questions for the next tax season.
The Internal Revenue Service (IRS) wants a piece of the NFT loot. There is uncertainty over how NFT holders should be taxed, although tax experts estimate that taxes could be as high as 37%. According to James Creech, a tax attorney in San Francisco, “you don’t get to report earnings or losses because the IRS has failed to provide guidance that satisfies your expectations.”
According to Chainalysis, the NFT business would see $44 billion in transactions in 2021. Some artists made large profits, with one American artist selling an NFT for $69 million-plus royalties. This raises some concerns about how they ought to be taxed. Although the taxation of NFTs is not apparent at the moment, that does not mean they should not be declared on your tax return.
Those who failed to declare quarterly earnings from NFTs may be in for a rude awakening when penalties are imposed the next tax season. NFT owners can sell their NFTs on NFT marketplaces like Opensea or Rarible, and they may be liable to income tax of up to 37 percent when they do so. In addition, if NFTs use another cryptocurrency to purchase the NFT, they will owe capital gains taxes to the IRS.
Experts on taxation weigh in
NFT taxes are estimated to be worth billions of dollars, according to Arthur Teller, CEO of TokenTax. However, aside from the 37 percent income tax, the tax requirements are murky. For example, should they be taxed at the same rate as capital gains on art collectibles, currently 28 percent? Moreover, in light of Joe Biden’s proposed tax infrastructure package, the Treasury Department provides no detailed guidance on how NFTs will be taxed. According to Jarod Koopman, a director of the criminal investigation at the IRS, as a result, tax evasion may become a distinct possibility.
The IRS has issued general crypto tax guidelines
Notice 2014-21, 2014-16IRB938, Rev. Rul 2019-24, 2019-44 IRB1004, and ILM 20214020; the IRS explains how bitcoins are taxed. It should be noted that none of these include any mention of NFT. Section 61 of the Internal Revenue Code (IRC) may necessitate the inclusion of creator income on the revenues of NFT sales and royalties. In contrast, Section 197 may allow amortization to buyers who use the NFT for business purposes. Buyers from other countries will be subject to local taxes. At the same time, if the copyright owners are citizens of the United States, they may be required to pay state and federal taxes on any royalties received.
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