What's up with Loot?
Wait so just NFTs of random text?...
Gm everyone. Unless you’re a zoomer, you’ve probably been pretty confused about what the recent hype about Loot is and what the 7 random words you keep seeing on everyone’s pfp (profile picture) and feeds are.
I’m here to demystify some of this dark art and hopefully give you a sense of understanding as to why you might want to pay a bit of attention here. The good news is that the concept is exactly what you think it is: 7 randomly generated words as an NFT. The less than ideal news is that there’s no more to it than 7 randomly generated words as an NFT (just yet).
The ‘just yet’ part is what makes it all so exciting and worth writing a piece on today.
What is Loot?
It all started when dom, the former creator of what was once known as Vine tweeted the following:
What happened after that was people feverishly minting these NFTs and a secondary market quickly forming around these new random words. Still probably doesn’t answer what makes these words special does it? Let me break it down further with some context that you do understand:
In DeFi there are five key verticals: DEXs, derivatives, asset management, lending/borrowing and insurance. Protocols within these verticals can leverage each other to create other “lego” money blocks that build on each other. Basically, Loot is a similar concept where it creates these base “lego” blocks for people to purchase but then the other lego blocks are games & applications which anyone can create. The characters/base properties of the game have been created however anyone in the world can create the game in which they get used!
This is a fundamentally new way of creating a metaverse game since you can allow anyone to create ways for the items to be used and delegate to the crowd which utility is the most popular of them all. Now, this doesn’t change the fact that there is no game for loot yet. The bet, in typical crypto style, is that eventually there will be a game catalysed by the community that has come together. Whether it happens or not isn’t really important in my view, the interest and magic created around the model show that it has viability in a certain timeline of the future and it’s worth paying attention to. The following thread from Avichal adds some additional context that’s worth checking out:
$AGLD Token
Okay so is that it? Not at all. It gets more wild from here. In a typical crypto story, when there is something of value, there is a token that’s around the corner. This story is no different. Eventually, someone in the community created a token called Adventure Guild ($AGLD) and this token is blessed to be the official governance token for Loot NFTs. Price skyrocketed with the market cap reaching north of $300m+ in 48 hours. Apes really are strong together.
You can read more about the airdrop and how it was distributed here:
So then what about Bloot?
Following the course of a normal crypto story, for every winner, there’s a pool of people who missed out. Hence, Bloot/Based Loot was created. Rather than the random words being medieval treasure related, they’re 4chan/Reddit inspired meme words. Oh, and of course, there was a new governance token created off the back of it called $BGLD. There’s already been a ton of activity in Bloot land with the following spun up:
So while all this madness was going on, prices of Loot started rising to the point where it was no longer accessible to regular players/creators (10ETH+ floor price). The creator, Dom, decided to create this notion of a “synthetic loot” bag where people can have a try-to-play sort of experience to make the game more accessible. Now this is kind of where the key point of contention lies with the Loot ecosystem, do you make early degens rich or dilute them to grow the pie for future generations and make it more accessible? That’s what we’ll explore in the next leg of this story.
How are we running this thing?
The next major question of the Loot ecosystem that’s shaping up is how should the Loot project be governed? By the holders of the Loot NFTs or the AGLD governance token? Now intuitively you might say the governance token since the meaning is in the name. However the issue is a bit more nuanced than that. If you let AGLD token holders decide the fate of Loot, then token holders are happy since they have something valuable to govern. Loot NFT holders ultimately want to have exclusive governance rights to ensure that a second governance token doesn’t determine the fate of their NFTs but also helps pump the value of it. You basically have the following parties in this debate:
Ultimately, it looks liked AGLD token holders will be governors of the Loot universe based on this snapshot vote:
Closing
As you can tell, Loot isn’t just a project but a continuously evolving story with many dimensions that will spin-off. The biggest risk with Loot is that the money clouds the innovation and everyone hopes someone else will create value while they hold and sit with their tokens. It’ll probably take a trough of disillusionment for the community to truly band together and create value; this story feels eerily similar to Sushiswap in my view.
Crypto speculators are extremely impatient and won’t have the patience to see Loot properly develop in the timeframe they think it will and eventually this will be reflected in the floor price. I wasn’t early to Loot but I’m confident that if you believe in the premise and what Loot represents in the Metaverse, there will be the opportunity of a lifetime coming up for it in the next few months. Watch out!
On a broader note, Loot and generative NFTs are basically on-chain improv. This is a new primitive and we’re going to learn so much about this. The future of the metaverse is being built with all these primitives coming together in unpredictable ways. As we create the characters, the experiences in which these tie into are going to be a whole new story.
Yes, starting from static NFTs, now, they would be minted as generative allowing them to take new forms or be building blocks of next series of NFTs