While we all debate what Azuki should do amongst our ever shrinking ecochamber, we should at least recognize some ground truths: Back when many of us first got involved in the promise of NFTs, we saw a very different era: 1) Endless ponzinomics through tokens, secondary collections etc. Just hold, and the project will make you’ll be rich in perpetuity! 2) Owning “first edition” collectibles that would only get more desirable (read: expensive) with time. We were early! 3) Incredible exclusive collabs and experiences that would become the envy worldover 4) A seat at the table at the next major media/IP franchise, and our owned IPs would obviously get licensed and I’ll get PAID! 5) Some nebulous concept of co-creation (although few really know what that means, and fewer actually execute on it) Back then, projects and holders had an implicit (or sometimes explicit) mutual understanding that a holder simply needed to buy, believe, and bagwork, and all the above would come true. Projects made gobs of money off of mints and royalties and tokens and treasury. They had ZERO incentive to build real businesses and had no experience building them What could go wrong! As we all know, the NFT market completely collapsed over the ensuing years, and here we are: Financially, the projects aren’t sustainable: - None of the NFT projects have unlocked a reliable, growing income stream. - There are no royalties, and even if there were, there’s not enough volume to make it worth it. - The old model of spending lavishly on holders (parties, events, free giveaways etc) actually burned quite a bit of these treasuries. - Similarly, many projects spent stupid money on stupid “bets” knowing they would never work, but it was what web3 wanted to see. Eg multi-million dollar games or IP development or throw away products etc. - Oh, common mistake, but RAISING money <> REVENUE. One you pay taxes on, the other you don’t. Treasuries are diff as a result. - There are so few people interested in NFTs and our space generally, that, even if a project “succeeds” in web3, its largely completely meaningless - Floor price going up does nothing for a project treasury or lifespan - A greater percentage of web3 liking or even buying NFTs is meaningless (see point above). Even if they’re buying your merch, its still trivial $$s cause overall count of NFT enjoyors is so low. Given the above, projects are literally just burning treasury down. Some had HUGE treasuries (Yuga due to raises, PP also due to raises maybe some token sales, Azuki due to mints/volume), but make no doubt, they do NOT have infinite runway (maybe Yuga does though 🤔). I don’t think they’ve hit critical levels yet, but I have to imagine lifespan is a very active consideration at this point. As for the Holders truth: - The loudest holders left are largely OG nft holders (2021-23), who were here for a fundamentally different era than we are in now (described above). Expectations FOR THE MOST PART (yes, there are some reasonable ones out there), are often carried from this era, which simple doesn’t exist anymore. We can’t pray its way back into existence. (I am one of these, just a lowly lowkey idiot.) - Holders are loud (both in support or against), but generally only heard within this ecochamber. Honestly, this is one of the bigger issues. We THINK that “being loud and supportive” is really doing a ton of work for the project, but we’re literally just reaching around the same circle jerk we always have, and are not reaching outside our bubble. Being loud on the CT timeline does jack shit with respect to helping a project succeed. - We keep wanting “more web3 focus” but we actually have no clue what that means. We want co-creation but 99.9% don’t create; we want a platform but not sure for what. - The only things we CAN articulate is that we want special treatment and free/discounted stuff. - We have no equity, no rights, no promises of ROI. We sent money into the abyss believing in something that might come true, but its just a hope and a dream to see if it will. So, combining the financial situation, and the holder reality above, we have to face our cold hard truth: project teams simply have no incentive to do anything for holders anymore. It sucks, it really does, as there’s no incentive alignment left. Some people just make it up and say there will be, but again, the numbers are so small relative to expectations and needs that it just doesn’t line up unless something changes. So at this point, will they ever line up? This is basically the primary “hopium” magical unicorn and rainbows outcome not reliant on web3 turnaround: 1) Projects need to find sustainable income and adoption outside of the NFT / crypto twitter bubble. They MUST become self sufficient and profitable (this point is obvious) AND THEN 2) Projects need to recognize where they came from and how they won, and find a way to connect the dots back together again. Maybe its rev share, royalties, buybacks (cleanest model tbh), ponzinomics, exclusive benefits etc). Ideally all the above. TO BE EXTREMELY CLEAR, #2 IS COMPLETELY IRRELEVANT IF THEY CAN’T FIGURE OUT #1. Sadly though for the bagholder, #2 is NOT a prerequisite for #1. Furthermore, the problem is that that there is absolutely no promise they can pull off #1, and even if they do, there’s absolutely no promise that they’ll follow through on #2. Basically, that lack of connection just leaves us truly hoping and praying. Alternatively (but maybe more improbable), a web3 turnaround could also revive things. Importantly, it can’t just be a 10% or 50% or even 500% pump in floor prices. For projects to survive on web3 turnaround, we need to see MASSIVE jumps in new participants, not to buy the floor up, but to bring so much liquidity in to either 1) make ponzinomics viable again (with royalties), or 2) provide a meaningful count of people to sell things to. Outside of these, I just dont’ see how “winning web3” makes a project viable anymore. My personal stance is this: I think “finding sustainability” needs to be like 90% of the budget/effort for a project. It is so critical, and only becomes more critical over time as treasuries dwindle (except for Yuga cause man they raised so much 😂). 10% of time/resources should be spent on bringing along holders for the journey. No, we don’t sit on a company’s board, but until further notice, we’re the only ones buying any of the shit so it makes sense to keep us happy. My early time at azuki was during a very different era. Crypto was still alive, and a majority was pre TGE, so we could afford to have that be closer to 60/40 web3 community vs. “outside the bubble”. We don't live in that time anymore, and I recognize that. For azuki right now, I do feel like its 98% “outside the bubble”, 2% web3/hodler focused. Does it make sense for the long term? Maybe, esp if they ever do plan on living up to the implicit promise stated in #2. But does it make anyone left holding want to come along for the ride? Man, it makes it hard. I think its a little too imbalanced. At this ratio, we either all need to clearly believe in the magical future world where hodlers FINALLY get recognized (which clearly we all don’t, or even worse…), OR we need a little more love/community management. But right now, the ratio is so imbalanced that its basically strangling what’s left of the web3 base. In the long run, that may end up not mattering much, but there’s no way it wouldn’t be painful for those trying to wait it through.

The next Garden Gathering is here. Wednesday, June 17 2:30 PM PT / 5:30 PM ET / 11:30 PM CET Join @dgtlemissions and @cornd0w0g, Head of Production for Azuki TCG, for the latest on the AZK-01 Gates Awakened U.S. launch on June 26, plus an AMA on TCG production, market trends, and bringing a card game to market.

An electric performance deserving of a legendary award... A commissioned group art from the one and only @TAKE_NFT