Ethernity Report by Jesse

Welcome to this edition of coin review. Bitcoin sure shook out some weak hands this week. Who would’ve thought that Dogecoin would rally the entire market with an almost 500% run this week? Crazy, crazy crypto… A fantastic social experiment that keeps on giving. Reaching 75% gains we have Amp and VeChain gaining a bit of traction this week. All this money has to go somewhere right?!? Even with a few Billion Dollars in Bitcoin changing hands this week, we remain well above our recent two Trillion Market Cap victory. This week we found a low cap gem every Moonboy, and his Shiba Inu is talking about. With their second NFT Drop last week it’s time to discuss Ethernity Chain.

Introduction

Ethernity is a premier authenticated NFT project which auctions verified artwork featuring the top artists and stars from sports, music, film, gaming, tech, and entertainment. Ethernity Chain combines the utility of DeFi and merges it with NFTs to create an exclusive pipeline to rare, collectible content from notable figures and well-established digital artists. These digital artworks include augmented reality unlockables, virtual world integration, and real-world collectibles represented as non-fungible tokens. The pieces feature well-known public figures and IPs with a part of all funds raised to be donated to charitable causes. Sellers have the option to opt into distributing portions of NFT sales to charities of their choice. Through working with leading figures from the blockchain, music, and entertainment worlds, Ethernity aims to mainstream NFT-based digital art while supporting charitable causes that will help those in need. It’s a win-win situation in which everyone benefits, from NFT collectors to charities that work with some of the most vulnerable members of society. Ethereum pioneered the way for decentralized applications that made NFTs fun, and now in 2021 Ethernity wants to make them collectible as well.

Ethernity will onboard a new generation of art aficionados, crypto collectors, and digital natives who are intrigued by the possibilities that NFTs have to offer. Whether you’re interested in the tech, the trading, the celebrity stardust, the philanthropy, or a little bit of everything. Ethernity wants to include it in their platform. Operated so far in a series of DROPS, starting with Community Drop #01 by BossLogic INC. A renowned NFT artist having done work for Disney, Marvel Studios, and other major motion picture studios. His work is considered to be collectible and sought after in the space selling over 3.5 Million USD in NFTs. Released the first week of March as 2501 NFTs that are exclusive to Ethernity Chain. With 2500 Editions at 0.299 ETH and 1 Legendary Graded NFT starting at 3.45 ETH. The first 2500 members to respond to the google doc were whitelisted and eligible to take part. First come, first served. Unfortunately, the volume and demand of the Bosslogic collection caused OpenSeas Ethernity Chain marketplace to crash, preventing the small group of 2500 their 5-minute head start to attempt to buy the NFT. Deciding to re-release the NFT in Redux format Ethernity followed up with the community the second week of March. Deciding that sending an email to all 2500 participants 30 minutes before the NFT launch would suffice. From the sale 1644 were sold, 356 of the set to be burned, and 500 supplied to a farming pool. Users who experienced failed transactions during the Bosslogic drop could submit their proof of failed transaction for the day via a google form. With a new internal currency called STONES to be airdropped into those users’ Ethernity Chain account by June 1st, 2021. The second, and more recent DROP happened on April 12th and included famed meme Artist and internet legend Jason Heuser. Working in the video game industry for over 7 years with a focus on creative illustration, marketing, and packaging design. Creating “Welcome to the Internet” exclusive NFTs that showcase the past and present of the internet and all its glorious memes. This time through a Series of five different NFTs, one Legendary Auction, 69 Limited, 420 Original, 50 Original (Stone Holders), and one Easter Egg. This time around ERN, the native token was required to take part.

Shortly after the first DROP Ethernity opened Beta Farming for a new currency called STONES. This beta phase allows ERN holders to stake tokens and farm STONES. Users who farm STONES during this period will be the first farmers to redeem STONES for an Ethernity NFT, with the 500 Bosslogic NFTs mentioned reserved for Ethernity farmers during the beta phase. Each Ethernity NFT drop will reserve a certain amount of NFTs for Ethernity STONES farmers, and the ratio of STONES required to redeem specific NFTs will be based on the market rate a particular NFT has been auctioned for. Beginning March 24th, this Farming Beta will end sometime around the end of April, with redemption at the end of May. Currently 1 ERN will earn a user 1000 STONES every twenty-four hours. Since not everyone will be able to get one of these 500 NFTs currently up for grabs. Each Bosslogic NFT will need 556,000 STONES for redemption. Unused STONES from the Beta can be rolled into the next NFT redemption period. If you want to take part in anything offered by Ethernity Chain, you need to sign up for an Ethernity account on their website. This will be your Ethernity account not only for farming but also for future features like buying, bidding, and voting in the Ethernity marketplace. Keep in mind that you cannot withdraw STONES to another wallet, STONES are non-transferable, have no monetary value and you cannot redeem STONES for ETH or ERN. STONES are redeemable for curated and specific NFTs on the Ethernity Chain platform only.

Aside from selective currencies only available during NFT event conditions. Ethernity offers LP staking and rewards for long-term holders of ERN tokens. In the Liquidity Rewards Program, a total of 50,000 ERN will be delegated for distribution to ERN/ETH liquidity providers on Uniswap V2 per month. When this 30-day period of LP staking is over, they will restart the pool. Tokens distributed via the Liquidity Rewards Program originate from the ERN Rewards token bucket. Currently, the APY fluctuates between 100% and 300% paid out monthly. Additionally, Ethernity is releasing Booster Packs priced between $50 and $300 USD based on rarity and purchasable in ERN. With no KYC this enabled any retail investor to participate in the Ethernity Chains community NFT lottery model. Within these packs, users will find aNFTs (Authenticated Non-Fungible Tokens) collectibles curated by the Ethernity Chain creative team. Some of these packs will have randomly inserted valuable & rare NFTs. Each pack bringing a chance for someone to get scarce & exclusive NFTs from authenticated, licensed notable figures, or exclusive Ethernity Genesis NFTs. These collections will come in different price points and waves to the Ethernity Community. With selected packs available to be purchasable with STONES. The cycle works like this. Users buy aNFTS, Ethernity keeps 10-20% and locks 75% up in a 2-year smart contract. After this 2-year period, these funds are unlocked and used to refuel the Reward Pool for LPs. Ethernity hopes that this cycle creates organic scarcity as the more NFTs sold, the fewer tokens are in circulation. These include future aNFT collaborations with the Winklevoss Brothers, Michael Rubin, Dimitri Vegas, Like Mike, Alesso, Bruce Buffer, Tony Hawk, Pelé, and Christian Vieri. They are also said to have exclusive Muhamad Ali rights for the first-ever NFT of historical significance.

The Token

Ethernity launched their native ERC-20 token ERN on March 8th via Polkastarter. After completing its private fundraising round with strategic investors Morningstar Ventures, Black Edge Capital, Spark, Woodstock, and GBV. They opened up investment to the public through an IDO partnership with Polkastarter. But, tokenomics for the project weren’t released until 7 days later. With a Max Supply of 30 Million ERN, 15% is for Reserves, 12% Farming Rewards, 6% Ecosystem, 8% Partnerships, 5% Floating Liquidity, 3.33% Public Sale, 20% Team & Advisors, and 30.67% for Private Sale. Vesting for Private Sale comes with only a 60-day vesting period, while the Team has a 12-month schedule that doesn’t specify the terms. According to the Team at Ethernity, the Private Sale and Public Sale both carried a price of $0.275 USD per ERN. As someone who can vouch for how these Private Sales are conducted, I don’t believe this for a second.

The Founders

Ethernity Chain was founded by cryptocurrency investor Nick Rose Ntertsas. Joining him is Community Developer Logan King, Media Director Adrian Baschuk, and that’s about it for the “Team” behind Ethernity. No surprise at all it found a home to launch on Polkastarter. No official company is behind the project and the name Ethernity Networks has been in use by another company since 2003.

Market Impacts

The ERN token came to market at $3 USD on March 8th, 2021. Giving a nice 10x for IDO participants and who knows what for Private holders. The NFT community ensued in a frenzy and drove the price up to $74 USD in the first 2 weeks to market. With many $50 Million USD volume days, those first few weeks, in a little over a month now since TGE daily volume averages around $15 Million. With another vesting unlock for early backers a few weeks ago, ERN has been hit with enormous selling pressure that’s unable to keep up with new eyes and new demand for the project. With 9 Million ERN circulating the price now sits around $20 USD with a Total Market Cap of $182 Million USD. The second week of May should see the final unlock for these early backers. As it stands the project is made up of community hype and unrealistic price discussions. In both the Telegram group and their Twitter Ethernity has 65k followers made up almost entirely of bots, Discord shows a much more realistic evaluation of interest in the project with almost 5k members currently. There is no Github, audit of the project or any sign of its codebase.

Concerns

Ethernity has some janky tokenomics going on. With half of the entire supply distributed to a Team of only a few individuals and Private Investors. It’s no surprise the token has such wild swings in value. Granting 100% of early participants all their tokens within the first two months is almost suicidal. Well, that is unless you really don’t care about the future of your project. As I can’t imagine all these early backers care more about minting NFTs than they do getting a 100x return on their investment and moving onto the next thing. The entire point of reasonable vesting periods is to avoid early backers dumping on early adopters.

Ethernity has no whitepaper or documentation, and only recently this week announced a Roadmap to go with the project. So far, they’ve done a great deal of name-dropping all these famous and influential individuals participating in their ecosystem. But not a single AAA NFT has been made or released yet. Sure, a few moderately well-known artists, but nothing like what’s being promised. With the team already complaining in their own chat that keeping up with a few thousand telegram posts a day is taxing them. I have a real hard time believing they can move the project forward at an effective rate.

Already an unrealistic amount of hype is growing around Ethernity. An almost dangerous amount given the project’s clear direction in utilizing Game Theory Mechanics when it comes to operating the Booster Pack System. Whether this will be something the project will keep in check by limiting runs of NFTs is yet to be seen. But what can be seen already is some pretty serious premiums for the few Legendary NFTs released so far.

Conclusion

If you’ve been riding that NFT craze train then Ethernity is already on the radar as a potential ticket to the crypto moon. If you’re willing to overlook the NFT space technically still being in Beta Mode. Ethernity might just be right for you. Without a doubt, it’s a tempting proposition for the uninitiated to farm NFTs. I mean, with only 50 ERN and a little over 11 days you could gather enough STONES to “maybe” unlock a 1:500 NFT and sell it to “someone” eventually right?!? Do you see where I’m going with this? NFT collectibles are starting to turn into a bit of a sideshow right now. As I’ve said before when reviewing Raribles.

The key factor to this NFT collectibles market is that it’s very exclusive. These don’t gain value based on the actual NFT itself so much as the market it circulates in. Collectors don’t buy with the intention to sell. So, those who buy with the intent to flip on some open market are met with great disappointment. Just like Art in the real world, it can be very subjective. Saying that an NFT should have value solely based on a limited supply is not enough criteria alone to warrant much of this price discovery we’re seeing. That’s of course not to say that there isn’t Bitcoin to be made. Only extreme caution should be advised when participating in these types of endeavors. Where dipping in a toe on shorter time-frames to experiment is a better place to start.

Until next time, remember that the only guarantee is BTC. So keep stacking that Satoshi.

-Jesse Koz

#MrHarrilasagna

Follow Jesse on Twitter

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