After two days on the market, a collection of 10,000 pixelated-bird non-fungible tokens has become the top NFT collection with over $281 million in sales volume, according to data aggregator CryptoSlam.
The collection, called Moonbirds, already ranks among hugely successful collections like Azuki, Bored Ape Yacht Club, and CryptoPunks.
Though massive sales of NFTs aren’t uncommon, the quick success of Moonbirds—digital art of cartoon owls— stunned many people in the NFT community.
Wait, what are Moonbirds?
The Moonbird NFT collection launched on Saturday, and quickly sold out in a fixed-price drop, the industry’s term for a debut.
Interest in the collection of 10,000 birds was high partly because of the people behind it: the Proof Collective, a group of 1,000 NFT collectors. Members include well-known NFT figures, including artist Mike Winkelmann, known as Beeple, and investor Gary Vaynerchuk.
Proof Collective’s cofounders, Kevin Rose and Justin Mezzell, are also highly visible in the NFT world. Rose, for example, is a venture capitalist at True Ventures who focuses on blockchain startups and hosts popular podcasts focused on crypto.
Membership in Proof Collective wasn’t cheap. In early December 2021, the average price for a Proof NFT, which represents membership to the group, was 1.99 Ether, or around $7,900 at that time, according to NFT marketplace OpenSea. Currently, the minimum price is now 98 Ether, or $285,670.
But Proof offers members access to events, its private Discord group chat, and collaborations, its website says. One of those collaborations is Moonbirds.
Any member of the public was able to enter a raffle to be guaranteed access to mint, or create, Moonbird NFTs upon their launch. One mint was allowed per raffle winner for 2.5 Ether, or about $7,500, according to the Moonbirds website.
Proof members were able to enter the raffle as well, but were also guaranteed two Moonbirds for every Proof membership NFT they owned.
Of the 10,000 Moonbirds total, 7,875 were allotted for those who won the raffle; 2,000 for Proof Collective members; and 125 for distribution by the Moonbirds team.
The Moonbirds drop was clouded with controversy, with accusations by some that bots had manipulated the raffle to their benefit and concerns that the project’s leaders used inside knowledge to buy Moonbirds that featured rare traits, which could lead to their price being higher in the future, as CoinDesk reported.
Those who hold Moonbirds can also “nest,” or stake, their NFTs to “accrue additional benefits as total nested time accumulates,” its website says. This means that NFT holders can get upgrades like “enhanced drops and rewards” over time.
To Proof’s founders, the success surrounding Moonbirds is the beginning of a company. On Saturday, Rose posted a YouTube video in which he said Proof would use the proceeds to “build a new media company.”
Moonbirds supporters see the NFT drop and planned ecosystem as valuable and something like what Yuga Labs built with its successful Bored Ape Yacht Club, a top NFT collection that grew to become the center of its own metaverse and ecosystem. But others said the surge in value was suspicious.
A Twitter account, NFT Ethics, that acts as a watchdog over the NFT industry, tweeted on Friday and accused the Proof Collective of “wash trading” its membership NFTs, or manipulating their price. That’s when a seller is on both sides of a transaction, so as to create an artificially high value for an asset. NFT Ethics also accused the Collective of “nepotism” by trading or giving free membership NFTs to family and friends.
Rose responded to the criticism on Twitter by saying “Wow, just wow, this is so riddled with falsities it’s ridiculous – invite me to any podcast, any time… you’re just making things up at this point.”
Rose, Mezzell, and Proof Collective chief operating officer Ryan Carson did not immediately respond to Fortune’s requests for comment.
NFTs as a ‘fundraising mechanism’
As the price of Moonbirds continues to soar in the secondary market, with nearly 70,000 ETH, or $205 million, in volume traded on NFT auction site OpenSea, some see this as a “turning point” for the NFT market as a means of startup fundraising.
“Moonbirds is one of the first majorly successful (so far) projects that is unashamed about what it is. Kevin [Rose] and Ryan [Carson] have been very clear that they’re raising money, that they’re not ‘selling art’, that they’ll treat the money as funds to build a product, etc,” Daniel Tenner, founder of startup funding service Grant Tree, wrote on Twitter.
Correction, April 18, 2022: A previous version of this article included a misspelling of the last name of Proof co-founder Justin Mezzell.
Never miss a story: Follow your favorite topics and authors to get a personalized email with the journalism that matters most to you.
