A primer to the ‘LOOT’ effect on Ethereum’s network you didn’t know about

People from the crypto-space have been pouring millions of dollars into pixelated images, alluring apes, and static rocks. The latest project to get significant traction of late, however, has managed to go one step further. ‘Loot’ offers images that encapsulate plain text on a black background as NFTs.

The aforementioned Ethereum-based project has already bagged the first rank on OpenSea in terms of trading volume. Curiously, other prominent NFT projects including the likes of CryptoPunks and Mutant Ape Watch Club have registered less than half of Loot’s volume over the past 24 hours.

What’s more, Loot’s floor price too was fairly high [11.6 ETH] when compared to other top projects in the market. Simply put, this means that the lowest price someone is ready to sell a Loot bag for is 11.6 ETH. The same was worth over $45.61k, at press time.

Source: OpenSea

How it all started

Loot was launched by American entrepreneur Dom Hofmann on 27 August. He created a system where NFT collectors could spend money to create ‘Loot bags’ of unique items, with only 8,000 bags ever to be made.

It comprises of eight traits that make up an adventure gear bag. Rare items, apart from the usual likes of weapons and armors, are listed one below the other on the list.

Now, even though the project doesn’t have any artwork or real game tied to it, its price began soaring, primarily due to its scarce nature. In fact, as per data from Dune Analytics, the all-time-high sale value of a particular bag stood at around 250 ETH at press time.

The project is, notably, decentralized and people are completely free to create, sell, and trade whatever they own. What’s more, when the founder shared the contract to mint a Loot bag on launch day, zealots minted all the bags within a span of three hours. No minting costs were incurred either. Only the Ethereum network’s gas fee had to be paid for the transaction.

For its part, the gas fee saw significant spikes, climbing up to 1429 gwei this week. The same can be observed from the chart attached below.

Source: ethereumprice.org

Interestingly, another item that is being built on top of the project is a currency called Adventure Gold. With a market cap of over $313 million, AGLD was trading at $4.48 at the time of writing. For now, the HODLers of the ten-thousand tokens are using it to vote on storylines and other governance features.

However, a host of Loot HODLers have already started selling their airdropped AGLD. Looking at the recent traction garnered, AAVE’s founder Stani Kulechov also touched upon the possibility of listing ALGD on the lending platform. His tweet noted

“Adventure Gold as a lending asset on Aave would be dope.”

Does it have any scope?

At this point, one might question –  What’s the actual point of a list on a plain black background? Well, Ethereum’s founder Vitalik Buterin has it already covered. According to him, pretty much anything that anyone creates can exist in a particular ecosystem. However, what matters the most is to what extent other people build upon it.

In Buterin’s words, the Loot project “has it right.”

Well, as long as the hype remains, Loot has the potential to give back to the Ethereum ecosystem. However, the market would not be able to sustain itself when the bottom falls out.