Azuki Takes a Hit Following Founders’ Revelations

When it comes to success within the blockchain sector, a major contributing factor to a project is the faces behind it. After all, many people know of Binance and Ethereum through their founders who are quite active on social media. A project can do well if the public takes a liking to one of its founders and this can be very good for business. 

At the same time, the actions of a founder or public face can bring harm to a business, as can be seen with the recent revelations from Azuki founder Zagabond revealed his past within the NFT sector.

A Controversial History

This saga began on May 9, 2022, when Zagabond published a blog post titled ‘A Builder’s Journey’ which chronicled his journey thus far as a blockchain entrepreneur. This isn’t unusual for entrepreneurs to do these days but the controversy started when the blog post revealed some of his past projects. 

It came to light that Zagabond was involved in three previous NFT projects before Azuki- CryptoPhunks, Tendies, and CryptoZunks. This, on its own, would not be controversial if these projects were not known to have been abandoned by their founders in the past.

Shortly after the post was published, fans quickly accused Zagabond of being part of rug pull scams. This type of scam is when a project promises to deliver a particular product and ‘pulls the rug’ from under investors by not delivering or delivering a poor product and then disappearing.

This led to q square-off on Twitter with some being convinced that Zgabond had scammed investors and others defending him. Zagabond did come forward to defend himself by participating in a Twitter space with Andrew Yang.

In the Twitter space, he explained that his leaving those projects was not a rug pull but rather him realizing that the product that had been created was not the right fit for its intended market. As for the left, he conceded that handover could have been done more professionally but that it was down to the disconnect between creators and the buyers. 

Despite his explanation, the price of Azuki, which is one of the most valuable NFT collections in the world, took a hit on marketplaces like OpenSea, though fans are confident that it will recover over time. 

The incident, however, did spark discussion about rug pulls and the expectations that buyers have for NFT creators. 

A Duty of Care

Because of the scams that have been run within the NFT space over the years, buyers are quite sceptical and always on the lookout for any signs of foul play. In the case of Zagabond, there isn’t a clear cut opinion online on whether the previous projects were indeed scams or just failed endeavours. 

Either way, there does seem to be greater awareness within the community about what founders owe their customers in the event of a project folding up. Hopefully, this will lead to more communication in these situations moving forward.