Azuki is also going to issue tokens, will it continue to harvest retail investors or revive NFTs?

Author: Pzai, Foresight News

As one of the important targets in the NFT bull market, Azuki has also launched its own ANIME token following Pudgy's token issuance wave and announced detailed tokenomics. The total supply is 10 billion tokens, with an initial circulation of 7.69 billion tokens, of which 37.5% will be airdropped to Azuki NFT holders, while the remaining portion will be used for community funds, ecological development, and team incentives.

Boosted by the news of the ANIME token release, NFT prices within the Azuki ecosystem reacted swiftly, and market sentiment showed a clear recovery. As of the time of writing, the floor price of Azuki series NFTs has reached 14 ETH, setting a recent high with a daily increase of up to 17.42%. Meanwhile, other related NFTs in the Azuki ecosystem, such as the Beanz and Elementals series, also rose simultaneously, reflecting the market's optimistic expectations for Azuki's future development.

From Ascent to Fall from Grace

In Azuki's development history, the past experiences of founder ZAGABOND and the release of the Elementals series undoubtedly cast a shadow over the project's continuity. As the soul of Azuki, ZAGABOND revealed in May 2022 that he had participated in and abandoned three NFT projects—Crypto Phunk, Tendies, and CryptoZunks—which were widely questioned by the community as "rug pull" actions. Although ZAGABOND argued that these projects were part of his "learning experience" and emphasized that he did not maliciously abscond with funds, the community did not buy his explanation. This incident directly led to the floor price of Azuki NFTs plummeting from about 20 ETH to 7.39 ETH, severely undermining market confidence.

On June 28, 2023, the launch of Azuki's new series "Elementals" pushed community dissatisfaction to its peak. The release of the Elementals series was initially highly anticipated, with the community hoping it would inject new vitality into Azuki. However, the NFTs delivered were highly similar to the existing Azuki series, with numerous duplicate images and low-quality designs, severely damaging the rarity system of Azuki NFTs. Community members generally felt deceived, especially those loyal users who had invested heavily to support the project. The floor price of the Elementals series quickly dropped from 2 ETH to 1.32 ETH, and the floor price of the Azuki series was also affected, further declining to 9.87 ETH.

This series of events not only severely impacted the community consensus of Azuki but also triggered panic selling among large holders. Several well-known Azuki holders sold off their Azuki collectibles, leading to further depletion of market liquidity. Worse still, the Azuki team's response after the incident was perceived as lacking sincerity and failed to effectively soothe community emotions. Although the team promised to improve the minting process and fix technical issues, these measures did not restore community trust. Subsequently, AzukiDAO even filed a lawsuit against founder Zagabond to recover 20,000 ETH in refunds. This matter eventually fizzled out, and in November 2023, AzukiDAO announced its rebranding to "Bean" and transformed into a memecoin project on the Blast chain.

Perhaps influenced by the recent market enthusiasm for the PUDGY token or the experience gained from previous meme operations, they ultimately chose to pursue an alternative revival through the ANIME token.

The Paradigm Shift from NFT to "Culture"

In fact, as early as January 6, Azuki's account followed and retweeted a tweet from the Weeb3 Foundation, whose account description reads "Building an open metaverse powered by ANIME." This led the community to speculate that Azuki might be brewing some issuance plans. As Azuki transitioned from NFT to ANIME operations, many people seemed to be changing their perceptions.

Azuki defines ANIME as a "cultural coin": a movement that transforms 1 billion anime fans into a community-owned creative network. From the very beginning, Azuki's anime style laid a solid foundation for its future operational direction. Its unique artistic design blends the essence of Japanese animation style with modern trend elements, successfully attracting crypto art collectors from around the world. This style not only allows Azuki to stand out in the NFT market but also endows it with distinct cultural attributes. The launch of the ANIME token will further strengthen Azuki's cultural narrative. Through tokenomics, Azuki can not only incentivize community member participation but also convey the value of culture to a broader audience.

After experiencing market changes, the mindset and needs of NFT holders have significantly shifted, gradually viewing digital assets as a form of identity rather than merely a liquid asset for trading. Especially within specific communities or cultural circles, the value of NFTs has transcended their financial attributes, becoming an important tool for users to express themselves and showcase their identities.

This shift reflects the NFT market's gradual transition from early speculative-driven dynamics to culture-driven and community-driven dynamics. As memes become increasingly popular, more projects are using this as a breakthrough point to provide corresponding incentives to NFT holders while expanding their ecological organic circles and even increasing their influence for mutual benefit, just as Azuki did with airdrops to the Hyperliquid community (HYPE stakers), Kaito Yappers, Arbitrum, and others.

A Different Path to Growth

The issuance of tokens has evidently brought growth to NFT projects. For example, Azuki's trading volume significantly increased within a week before and after the token launch, and the floor price also rose considerably, attracting more new users and capital influx. The Pudgy Penguins team has also practiced this growth path. Since the token issuance, its floor price has remained above 23 ETH, and the anticipated Abstract Chain airdrop initiated by its team has effectively endorsed Pudgy's value. The issuance of tokens not only enhances user participation and sense of belonging but also creates more revenue sources and sustainable development paths for the project. Thus, the growth generated by tokens will not only be reflected in short-term market enthusiasm but also inject long-term development momentum into the project through the token economic model. Compared to NFTs, the liquidity and composability of homogeneous tokens are also stronger.

We can see that the trend of NFT "revival" is very evident for both NFT projects themselves and the benefits to the crypto ecosystem, including:

• Enhancing Cultural Appeal and Brand Value: The ecosystem attracts users with shared interests through specific cultural characteristics, strengthening community belonging. It endows NFTs with distinct cultural attributes while quantifying brand value through tokens, and even forming unique brand narratives through collaboration between ecological projects, enhancing market recognition and long-term value of the project.
• Expanding User Base and Promoting Cross-Circle Cooperation: Attracting a broader range of cultural enthusiasts, breaking through the limitations of the crypto circle, and expanding the mainstream influence of NFTs. Projects interact with other communities or projects through token airdrops, collaborations, etc., forming a broader ecological network effect. For example, the paradigm shift from NFTs to homogeneous tokens directly allows users to access from a larger liquidity perspective (such as centralized exchanges), thereby providing maximum ecological access.
• Creating Sustainable Value and Iterating Incentive Mechanisms: Transforming NFTs from short-term speculative assets into long-term cultural value carriers, enhancing the sustainability and risk resistance of projects. Through token economic models, projects can incentivize users to participate in community building and content creation, thereby unlocking more culture-based application scenarios (such as virtual events, IP licensing, etc.). For Azuki, the vast anime market is precisely what it hopes to enter and delve into, and tokens become the key catalyst and lubricant within the ecosystem, providing users with excess income and experiences.

In summary, the launch of tokens provides NFT holders with more rights and incentives, such as governance rights, airdrop rewards, and consumption scenarios within the ecosystem, thereby enhancing community stickiness and participation. Additionally, the circulation of tokens opens up new revenue sources for NFT projects, such as transaction fees and potential staking rewards, further promoting the sustainable development of the ecosystem. However, this growth also comes with challenges, such as token price fluctuations potentially impacting NFT values and how to balance the token economy with NFT scarcity. In the future, NFT projects need to find a balance between token issuance and community culture to truly achieve long-term value growth.