Welcome to the 3rd issue of the NFT Humpday Report, a weekly column covering and providing embedded analysis on the NFT economy’s biggest topics du jour. Brought to you by WIP meetup collaborators and nft42 community hub TokenSmart.
Who: bluekirby.eth is a pseudonymous Ethereum community member who first hit the scene in July 2020. They rapidly gained some 20,000 followers on Twitter for charismatically providing community management and education services around yEarn, a yield aggregator project that’s seen breakout success in decentralized finance (DeFi) this year.
What’s New: Building off recent inroads they’d made in the DeFi and NFT sectors, bluekirby.eth had been hyping up Off-Blue, an NFT auctionhouse project, in early October. On October 10th, bluekirby.eth exit-scammed, deleting their social media presence after raising almost 2,500 ETH (~$954,000 USD) ostensibly for Off-Blue.
Context: yEarn’s seen a rapid rise this year and the blossoming of a teeming, organic community. This summer bluekirby.eth quickly became a star in this community for their evangelism and general comms efforts. In fact, the pseudonymous contributor became so popular that yearn’s YFI token holders voted to pay bluekirby.eth a monthly ops wage of $7,000 in early September for their comms work. This only cemented the figure’s position as someone to watch around Ethereum.
The NFT Connection: As a “DeFi made easy” project, yEarn rolled out a novel DeFi insurance product called Yinsurance in September. Yinsurance policies are minted as NFTs, so some trailblazing users quickly started listing these policies on NFT marketplace Rarible, largely to tap into $RARI farming. This dynamic quickly caught the attention and interest of bluekirby.eth and the others in the yEarn community. A surge of unprecedented contact and euphoria between the DeFi and NFT sectors ensued accordingly.
Rarible Drops: Upon discovering Rarible, bluekirby.eth quickly started coordinating yEarn and Kirby-themed NFT art drops on the marketplace. These multi-editioned NFTs, often priced at 10 ETH each and higher, would sell out immediately as buzz around yEarn, NFTs, and Rarible was reaching a fever pitch. bluekirby.eth was able to make around 500 ETH (~$190,000) selling these themed NFTs over the last month, per Rarible’s stats. Note: these tokens were created with stolen intellectual property from Nintendo, another important wrinkle to consider.
The Eminence Finance Angle: yEarn’s superstar dev Andre Cronje famously “tests in prod[uction],” a reference to the fact that he routinely tests out experimental systems on Ethereum rather than a testnet to better understand how these systems would act in the wild. So it was no surprise in late September when bluekirby.eth started drawing attention to Eminence Finance, an unannounced NFT gaming project that Cronje was tinkering with on mainnet. But what was surprising was how much FOMO bluekirby.eth triggered with their early Eminence Finance tweets, all without having discussed or coordinated on the project with Cronje. Within minutes, investors “aped” millions of dollars into the experimental game with no real understanding of it.
The Attack: A hacker or hackers quickly identified an exploit in Eminence Finance’s system and leveraged it to steal $15 million from the project’s investors. Bluekirby.eth, who had brought the most attention to the game, now took a major and unprecedented reputational hit in the Ethereum community. They were forced out as yEarn’s official comms lead at this time. In the wake of the hack, bluekirby.eth also inflamed community sentiments by selling off all their YFI, ostensibly for privacy but in reality probably because they saw the writing on the wall, so to speak. Things went downhill from here.
Enter Off-Blue: After the Eminence Finance dust settled a bit, bluekirby.eth introduced and started hyping Off-Blue, their new NFT auctionhouse. The project planned to reward past bluekirby.eth NFT buyers and future Off-Blue buyers with BLUE, a community token. The pitch worked, as bluekirby.eth promptly sold around 2,000 ETH worth of NFTs as BLUE mania kicked in.
Big Fat Scam: bluekirby.eth exit-scammed with their ETH proceeds on October 10th, and Rarible suspended the Off-Blue page for improperly fundraising through its marketplace. The betrayal stunned many in the community, as 1) the figure seemed like they’d only begun to start enterprising around DeFi and NFTs, and 2) that perhaps previous mistakes were simply the result of inexperience. At this point, a post alleging to doxx bluekirby.eth’s real identity started to gain attention on 4chan before being taken down not long later. It was also possible to watch bluekirby.eth’s Ethereum address begin to filter 100 ETH chunks through privacy solution Tornado Cash around this time.
Refund Offered: Perhaps out of guilt or fear, bluekirby.eth published on Off-Blue sign-off letter promising refunds to affected investors. “There are a lot of things I should have done better … I have permanently removed myself from the project,” bluekirby.eth wrote.
What Next? That remains to be seen. Bluekirby.eth will presumably try to sail into the sunset with as much of their illicitly gained crypto as possible. It’s always possible they’ll fire up a new pseudonym and be walking and talking among us again in the near future, unless the law catches up with them first.
Key Takeaways: This unfortunate bluekirby.eth episode gives our ecosystem a much-needed chance to double down on what we buy when we buy NFTs. When people were buying up bluekirby.eth NFTs, they were mainly just buying hype. And that’s a path to getting burned, like we’ve all just seen. Yet there are NFTs with tangible, inherent value as imbued in their entirely on-chain metadata, e.g. Avastars and InfiNFT pieces. You don’t have to take anyone’s word for them: you can check the metadata and make a value judgment on their value with your own eyes. Anything less than this guarantee is just a well-intentioned promise — or much worse, as bluekirby.eth has sadly just shown us.
Thanks for reading the 3rd NFT Humpday Report! Check back this time next week for more excellent NFT ecosystem coverage! Cheers🌠