Loot, Bloot, AGLD and how to make $300m in a week

  • Loot flipped the NFT playbook on its head by giving almost everything away for free.
  • Bags of eight randomised items sketch a fantasy world with the bare minimum of guidance.
  • The project enamoured developers and investors and prolific building commenced.
  • Loot, copycat Bloot and a governance token, AGLD, have created $300m+ in value.

Just enough nothing

What’s more valuable than something?

The space that allows that something to exist.

At least, that is how it seems to be in the world of cryptocurrencies. Ethereum is just a base layer with minute building blocks, that sparked so much collective imagination and perspiration, that more than $100bn in value are now invested in these building blocks.

But these are financial assets. Invest value to gain yield. There’s a straightforward economic incentive here.

What if the aim is play, creativity, imagination? Would that work, too?

Maybe Dom Hofmann, founder of 6-second video sharing service, Vine, and NFT creator extraordinaire, was contemplating these questions in the weeks leading up to his tweet on 25 and 27 August 2021.

Anyone with enough proficiency to call a smart contract via Etherscan was invited to mint one or more NFTs. As a result, you got a JPG representing items that seemed to come from a fictional role-playing game. The actual item names are stored as text in the smart contract.

8000 unique ‘bags’, as Hofmann called them, could be minted, containing items called ‘Divine Hood’ or ‘Necklace of Enlightenment’. Sounds straight from Dungeons & Dragons. Hofmann supplied no game rules, game world or any other parameter.

The order and content of each bag was randomized, with some items more common than others. A ‘Divine Robe’, for instance, was exceptionally rare.

The NFTs cost nothing. Only the gas fee necessary to mint the bags was required. The minting didn’t take too long. Announced with just a tweet, the NFTs were gone within less than four hours and promptly appeared on OpenSea’s secondary market.

Intense minimalism

Since Hofman didn’t sell the right to mint, like many other NFT projects do, he didn’t profit directly from Loots’ quick uptake. All future profits would have to come from Loot's success. Hofmann reserved the right to mint the last 223 bags for himself.

“Bags #1 to #7777 were claimable by anyone and #7778 to #8000 are currently reserved for the contract deployer”, can be learned from the website, which was also created after the mint.

The imagination of collectors did indeed run wild. Within mere days, collectors spun up projects utilising the space Loot so artfully framed.

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NFT guru, William M. Peaster, lists the first three with good traction:

  • 0xinventory.app — a tool for color-coding Loot items by rarity
  • $AGLD — Adventure Gold, a governance token for story-building that is already being used to vote on Loot Chapter 1
  • The Grand Exchange — a front-end Loot auction house, underpinned by the Zora protocol, that paves the way to group bids on Loot items via PartyBid (as PartyBid only supports Zora- or Foundation-based auction infrastructure currently).

Loot was the top NFT project of the week, following its launch, according to sales volume tracked by CryptoSlam. The project’s sales topped 59,000 ETH, according to OpenSea. Currently, Loots’ floor price is 8 ETH, or $28,000. The highest price paid for a single bag was just shy of $1 million, according to The Block.

A like-minded participant created a smart contract governing Loot-bearing characters, and Loot bag holders could mint Realms where their fictional characters could roam. Another smart contract brought in classic D&D ability scores. An entire ecosystem developed around the project in less than a week.

Most of these second-order projects are now worthless, with floor prices of 0.01ETH or less.

Second-order tokenization

A notable exception was $AGLD. The fictional Adventure Gold governance token spun out to become a legitimate crypto currency of its own. Although there is no use for it outside voting in Loot DAOs decisions, as of today, the token commands a market capitalization of more than $200m.

Loot’s intense success and fanfare created a copy and paste frenzy. NFT investor, @beaniemaxi, announced a project by PixelVault’s team called Based Loot, or Bloot (not for weaks) on 3 September.

Instead of “the noble romance of Loot’s medieval lore, its most prized asset isn’t a magical robe or a well-honed sword—it’s a virtual cock ring,” writes Decrypt. It further explains that, “Instead of Loot’s ‘Divine Robes of Anger,’ Bloot’s heroes wear ‘ERC-20 Poor’ Maxi Skirt of Rugging’. Instead of ‘Wool Shoes’, Bloot offers ‘Moon Shoes of Death.’ And Bloot’s warriors don’t fight with ‘Short Swords’; they fight with ‘Baguettes of Shit.’ In the past day, $5.3 million of Bloot NFTs have changed hands and the floor price has risen to 1.44 ETH ($5,600). Bloot fans have traded $143 million of Based Gold, of BGLD, a fork of AGLD, Loot’s cryptocurrency.

Limited to 8,008 NFTs, Bloot wants to be ‘Loot for the plebs’. According to Beanie, Big VC firms scooped up most AGLD and Loot, which was why the price exploded.

Fighting with words, not swords

And here is where it got nasty, quickly. BGLD shot up to $1.10 a token and crashed down to $0.2 in just 48 hours. Many who snapped up the token or the NFTs, on the secondary market, felt swindled. Some even reacted with death threats when rumours about BGLD’s affiliation with AGLD surfaced, which turned out to be a false accusation.

Seems like the first fight Loot adventurers picked was with Bloot fans, not fantasy characters.

At the same time, Hofmann made Loot more inclusive for adventurers who couldn’t afford a five-digit entry price and created more Loot, or mLoot. This allowed everyone with an Ethereum wallet access to mLoot, for the gas price of interacting with the smart contract.

But the framework for an actual RPG was also being developed. And by none other than Yearn.finance founder, Andre Cronje.

In an interview with The Block, Cronje said he “*created the core of a game called Rarity. But he has taken it one step further than naming a bunch of items. Instead, he’s created the fundamentals of the game on the Fantom blockchain — where fees are relatively cheap. To create a warrior, you interact with the contract address and receive a token. That token represents the warrior you picked, whether that’s a Druid, Monk or Sorcerer.

Cronje said that he doesn't have a vision for the game, he just ‘codified the rule set, spells, feats, crafting, adventuring, etc.’ ‘What people do with that is up to them,’ he added. ‘I'll create the world for them, but they should adventure*”.

Before and after Loot

How did Loot inspire such a frenzy of activity and outpouring of creative juices?

Hofmann nailed the sweet spot of providing just enough cultural references and cues to sketch a frame around a space. The Dungeons & Dragons vocabulary hit a soft spot with crypto enthusiasts, many of which fondly remember long nights of playing this OG role-playing game with friends in their teens.

That so much was left to the activity of collectors, represented a radical departure from the way NFTs were traditionally marketed. Twitter user @tandavas illustrated it perfectly:

Even Ethereum co-founder, Vitalik Buterin, praised Loot:

And Bankless commented: “While this corner of the metaverse is completely unstable, this model for establishing how the metaverse grows has gained precedent. This new model has pushed expression to the surface, while value and utility are embedded deeper into the Ethereum protocol.

John Palmer sums it up:

To boldly go…

The future of Loot is far from certain. “Loot is the unfiltered, uncensorable building block for stories, experiences, games, and more, in the hands of the community, at no cost,” its website describes. But what if the community drops the ball and moves on… What if the building blocks gather dust until they are discarded, like so many childhood toys?

Loot boldly went where no one has gone before. It’s up to the community to create the pot of gold at the end of this particular rainbow.

Conclusion
Loot sparked the imagination of prolific developers and the parting of hefty sums from deep wallets. With mLoot, anyone can participate. This is the strongest pillar of Loot’s future. It is inclusive, and people do build on top of it. What’s uncertain is for how long?

Nothing in this article constitutes professional and/or financial advice. The content is provided exclusively for informational and/or educational purposes. Nothing is to be construed as an offer or a recommendation to buy or sell any type of asset. Seek independent professional advice in regards to financial, tax, legal and other matters.

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