Cityverse NFTs: One Failed Launch, 500+ Distraught Holders

The full piece is published on the Daily Dot.

The fable of Cityverse first popped on my radar (i.e., Twitter feed) when user @Zemoolol sounded the alarm to what they described as the "2nd #NFT RUG PULL of 2022."

The term "rug pull" isn't a catch-all: originating from the crypto industry, the term refers to a situation where a project's founders or developers abandon the project and run away with investors' funds.

I wasn't convinced Cityverse applied. Check out my Daily Dot piece for the full summary of events and reactions, but as a quick summary:

‘Not a scam or sh*t project’: How a hot new NFT offering collapsed immediately after kicking off

While Cityverse was hyped as an exclusive NFT drop, minters quickly found out that they’d been duped by a number of promises.

The Daily DotEleanor Pahl

Cityverse began just like many other NFT projects, with a social media outreach phase and a Discord server to hype up potential buyers. There was also a "whitelist," or an exclusive list that allows its entrants to be the first to "mint," or essentially create, the NFTs.

The key aspect, and generally understood feature, of a whitelist is exclusivity. Exclusivity drives scarcity sentiment, which then drives price. The elusive is desirable.

On Cityverse's launch day, whitelisted individuals were excited to mint their NFT for $3000. Confusion quickly took over the Discord when members noticed anyone could mint – not just those on the whitelist. The project's founders locked down all Discord channels, effectively cutting off all communications, which only exacerbated feelings of discontentment.

The value of Cityverse NFTs rapidly declined following the faulty launch, plummeting ten times below the mint price.

Cityverse NFT holders were quick to call the project a "rug pull." But was it, really? All purchasers received exactly what they paid for: a speculative digital asset, and a highly volatile one at that.

The project can, however, likely be called a scam. The founders misrepresented (or at least hugely messed up) the whitelist details, which led to the value's collapse.

Scam indicators were present prior to the failed launch, but only considered after the price had dropped. The site, rife with grammatical errors or strange phrasing; the Discord, overrun by bots; the social accounts, created just a short time before launch.

Cityverse's failure, as unfortunate as it is for those who lost money, is a lesson in the perils of FOMO.