How a viral NFT project survived the crypto crash

Image: lootproject.com

I told you about loot a year ago, a collection of non-fungible token that had inspired an energetic community to form around it. A series of short, text-based descriptions of fantasy genre items like swords and amulets captured the imaginations of builders and speculators who wondered if the underlying NFTs might someday serve as the basis for graphic novels, movies, video games and more.

I found loot to be compelling as a subject for journalism. Dom Hofmann was a co-founder of the short-form video pioneer vine and the quirky social network peach. The project was more than just a startup, it was an art project, and it was free to anyone who paid the transaction fees. Five days after launch, loot bags had generated sales of $46 million and a market cap of $180 million.

Lots of NFTs were selling for a lot of money back then. Creating art for the items contained in the bags, forming guilds for people who owned the same "rare" items, and writing smart contracts to allow people to trade the items held within made Loot stand out.

The dream was that everything would coalesce into something bigger than the parts. The majority of the notional value for the most richly valued collections has been wiped out. I wondered what had happened to Loot in the year since it went viral, as we near the anniversary of its launch.

The things that are being built on top of it are really interesting, or really ambitious, and in some cases both, according to Hofmann. In the early days of the project, I thought we might see things like that.

He spent the previous hour and a half on the phone with a developer who was going to launch a project related to loot. His full-time job is running Sup, a 12 person game studio working on various projects that he mostly refused to discuss on the record. When he feels like he has something to offer, he's piping up in the Loot forums.

The speculative mania around Loot has cooled, but that doesn't stop that development. The project's market cap has fallen to just under $6 million, and the cheapest loot bag on the market has fallen from $20,000 to $1,438.

Developers are building something. HyperLoot is a project that the people I talked to said was a visual building block on top of loot. A picture of whatever is in a bag on the body of a digital adventurer is generated when loot owners log in to its website with theircryptocurrencies. The basis for a novel, a character in a game, and so on could be served by that image. HyperLoot creations are released under the CC0 license and placed in the public domain.

Thanakron Tandavas, one of the co-founders of HyperLoot, told me that the company is building a kit that will make it easier to build software. The company is building a video game that is similar to a Super Smash Bros. game. Think of Bored Apes vs.CryptoKitties on a console.

Tandavas believes that the same success could happen to Loot as other successful open-sourced projects that embrace permission-less innovations.

Shahruz, who uses one name, told me that he is working on a project called 32 Swords. There is an elimination reality series in which players have to have both Loot and another NFT. Each team is given 12 hours to debate and vote on their next move in a human chess game. The other participants or spectators get their loot bags as players are eliminated.

Shahruz wanted to create art from the public domain.

He told me that he thinks there is a lot of fun to be had working with existing projects and communities.

What can we learn from loot a year out?

The early wave of hype wasn't as helpful as you might have thought. The early days of the project were free for everyone to make cheap clones and other related projects that distracted from the more serious developers. It took a long time for the hype to go away.

It is difficult for public-domain projects to coalesce. At the height of Loot's hype cycle, a lot of people wrote about how the game could be used in a video game. The entropic forces that can cause multi-year delays for even the best-funded video games are magnified for games built by volunteers.

It was obvious that it would be difficult to make a video game out of loot. Some of the steps have proved difficult.

One of the appealing aspects of NFTs is that they can be joined together like Legos. A compendium of beasts in the Loot universe, a list of dungeons, some visual elements, and so on were created by other developers in the weeks after the launch of Loot.

A kind of monster that was less than the whole was created. As soon as someone wants to add a new piece to the stack, you might have to start over.

It is hard to make a bunch of pieces that are related to one another, relate to one another, and also be open to future pieces that need to connect. It's difficult to be future-proof.

One of the main reasons that web3 projects aren't making much progress lately is how expensive Ethereum is to use. Projects are not accessible to anyone other than rich nerds due to the high transaction fees.

There are a lot of use cases that are not within reach because of that. The price is too high under normal circumstances.

Hofmann is still interested in the technology. He said that making films used to be a lot more expensive than it is now. The barrier to entry has gone away with the advent of fully capable cameras.

The basic properties of NFTs are that they represent a piece of data that isn't in an application, that the data can be transferred to another verified owner, and that the data has a verified owner.

He said that those are big changes to the way the internet works currently. It is possible to prove that you are the owner of the data by removing the value from it. It is interesting because it is a technology primitive. That isn't something that is currently available.

There is a project that Hofmann is working on. It is a role-playing game that takes place on the blockchain, with holders of the relevant NFTs being able to interact with the Discord bots. The CPC, or community-playable character, is one of the game's more outrageous features.

I am not sure if corruptions or loot will ever reach an audience of more than a few thousand people. About 200 developers are involved in some capacity.

The degree to which developers like him are working to make something out of the NFT is striking. I didn't hear anyone suggest that developers have gotten close to cracking the code, just that it all still feels interesting.

In a year's time, there will be Loot-related fiction and video games. As other CC0 projects join the public domain, they will likely continue to collide with loot.

The NFT landscape is moving so fast. It's so different.