The Secret History of NFTs
The screen flicked to night mode and broke my trance long enough to refocus. From a slouched position at the end of the table, I extended my right arm to the side of the laptop and my tiny white companion and I continued to roam the cold wooden surface clicking aimlessly through old Hic-et-nunc pieces.
I first noticed it only casually. But the identifier was unmistakable. It was a quick series of letters and numbers on a ledger consisting of mainly random letters and numbers.
It wasn’t until a few nights later while browsing Daniel W’s collection that something clicked.
There it was again, like a fresh graffiti tag on an overpass. I began clicking frantically through collection after collection, scanning that spot for the symbol.
I found 43 pieces by the time the first rays of light crept across my keyboard. They were all bought on the same day two weeks ago by the same address. Most were held by someone new by now, with a few still held by the address.
The blockchain gives you a glimpse into the past. The ledger is an anthropological map of value and ownership as determined by the social and cultural zeitgeist. Price, ownership, secondary market activity all tell a story waiting to be heard and I was convinced the address belonging to A07 had something to share.
---
The proposals started out honestly enough, anonymously proposed and voted on. We built a dashboard, or at least someone had, and approved a set of governing rules. We set up a chat, each of us using our A07’s as our profile pictures and usernames.
100 pieces for a total of $2.4m USD were acquired and relisted by the A07 wallet in a single day. A month later all the pieces had been picked up for a total of $4.8m USD. The air drop came a few days later. A07 dropped 120,000 A07 tokens to my address that collected the A07 piece for $120,000. In the block explorer I found the following message:
4.8m cap. 1-1 A07 value. 100 holders. Governance token. A07 DAO.
A few hours later I received a fractional amount of A07 from an unknown address. The block explorer read:
Proposal 1: Host chat. Cost 5 A07 per. Send for yes vote.
A chat? With who? All the people who collected a piece from A07? What for?
I sent the 5 A07. A few days later, another fractional air drop from the same address:
Proposal 1 – Approved: 100% voting participation, 495 A07 collected. Chat – https://wickr.com/a07
It checked out. 99 addresses sent 5 A07.
Everything seemed fine. It was exciting to be involved in something new, something interesting, something to break the monotony. But then Proposal 23 came, and everything changed.
---
It was the second proposal from A07 themselves. The first, Proposal 11, had been something simple, a suggestion really, to create a treasury funded by a 10% tax on all proposals. The treasury would be held by the group and any member could propose to use the treasury versus requiring a proposal to be funded by members directly. Proposal 14 added a second funding source – permitting the purchase of new pieces using treasury funds with proceeds returning to the treasury.
Proposal 23: Let’s play a game.
A proposal will be injected to reveal the identity of one of you.
You can stay anonymous and in the game by paying the original price of your A07 to the treasury which will distribute the funds equally to all remaining members. However, none of you hold enough $A07 to cover your original A07.
The target of the proposal can choose to remain part of the game by asking fellow A07 members or the treasury to cover the difference. If these options fail, you can send all of your remaining A07 to the treasury and leave A07 DAO anonymously.
The last 3 A07’s will receive equal shares of the treasury and A07 will be destroyed.
Only one proposal can be considered at a time. All members can submit identity proposals.
Tezzardz #1996, you are up. Good luck.
The wickr chat was silent for a few days. Did A07 really know who we were? What difference would it make? I have nothing to hide, outing me to a group of strangers from anon to known wouldn’t materially change my life. Anyways, some of us were already doxed by our own addresses and verified accounts. What would any of this mean, really? At the same time, there was a slice of a nearly $5m pie at stake. Enough to make anyone consider playing, the game.
---
Proposal 48: NEONZ #4738 – you have been nominated.
Twenty identity proposals had been injected before Proposal 48. There were a few administrative proposals in between and one new purchase by the DAO. The chat had returned to normal, but the tension created by A07’s game could be found in every message. A tribal council mentality had taken over the group. Everyone was a friend until everyone was a target.
Of the twenty proposals, eight members left the DAO, sending their A07 tokens to the treasury. The remaining twelve had managed to win enough votes to have the treasury cover their costs.
No one’s identity had been revealed, we had all resolved to follow the rules. If we played along, it was a simple social experiment with an anonymous group. If we didn’t, we were not overly fearful of repercussions. Since Proposal 23, A07 had participated cordially in the chat and had sent only a handful of the identity proposals.
But we all knew something might change with Proposal 48. NEONZ #4738, a 10,000 piece PFP collection by the artist Sutu, had one of the lowest A07 price points and NEONZ #4738 was only missing 5 A07 to stay. Members were reluctant to use the treasury to cover because the payout to each of them would be a fraction of an A07. Furthermore, members were not interested in covering the cost because they would be paying more in fees per person to the treasury than to cover NEONZ #4738. Both resolutions were rejected.
NEONZ #4738 went off. Whoever they were, they were pissed. They called out the remaining members for not covering just 5 A07 when last week we had covered a 75,000 A07 gap. But why keep someone in the game if the reward for doing so wouldn’t improve our own chances of winning?
The proposal had thirteen hours left on it. NEONZ #4738 declared earlier in the day that he would refuse to send his meager A07 to the treasury and leave peacefully. The address associated with NEONZ #4738 was anonymous. We all waited. The chat was silent. What would happen if they didn’t respect the game?
---
Tuesday morning arrived like any other in the six months since A07 entered my life. Instinctive checking of twitter, slack, email in the moments after turning off my alarm had been replaced with checking the chat and the proposal interface. Proposal 48 expired at 4:00am.
A07: Proposal 48 has expired. NEONZ #4738 = Josh Tuckerman. Tuckerman is no longer a member of A07.
I opened google, copy – paste – search. Josh Tuckerman, VP Product Development at JupiterNine Labs. It checks out. JupiterNine had two NFT platforms, one of which was a leading music NFT marketplace that had been dropping huge names. It had to check out. It would make sense that this guy would have been buying random NFTs. But there was no way to verify, no way to confirm, without revealing my own identity.
Wednesday morning.
Alarm rang, I flipped from alarm, now silenced, to the chat. There was a link – Coindesk: JupiterNine Executive Under Scrutiny for Front Running Drops.
No fucking way.
---
The game moved on. More players left the DAO, no one tested A07. There were now seven of us left. From the payouts, I now had well above my original 120,000 tokens and was feeling confident I could sneak by for a little longer, maybe even get to the final three.
A single player, undoubtedly with his own node to avoid any chance their NFT would be called, won the race to send the next two reveal proposals.
We understood that any of the five of us remaining could be the next target and while we only needed two of us to leave, the odds were not in our favor.
Proposal 172: New reveal proposals must be approved by a simple majority before injection to the DAO protocol.
The vote on Proposal 172 was 4-2 with only the targeter and A07 against it. Proposal 172 led to a new dynamic – do we target the strong or the weak, do we form a cartel against the targeter and A07?
---
From the start, I had continually checked the wallet addresses of the other players. I was initially able to identify 24 of the players who were verified on one platform or another and a few other players that were sloppy with burner addresses and one or two address swaps later I was able to find something linking them to a known identity.
In the end, it was this sleuthing that changed everything. A07 slipped up.
My life was falling apart around me. The roaches had taken over the apartment and the trash piled up in the corners. Friends and family were abandoned as the compulsive habit of strong spliffs and block watching took over my life.
A07 kept the wallet with the total funds from the initial sales clean. A few months before Proposal 172, A07 sent a proposal asking permission to move one-third of the funds into a low-risk strategy in a popular defi protocol because, as they put it, “It’s not doing us any good sitting there for this long not making us money.” The proposal was approved, and the funds were moved.
It was after a particularly dreadful night of cigarette after cigarette on my fire escape looking out over the city, fantasizing about how winning this game would change my life -- where would I move, what life would I live, that Tony, the cook in the corner bagel shop and the only person I remained in regular human-human contact with, unlocked a connection I had overlooked when he apologized that they were out of hot sauce that morning.
Hot sauce, sauce, SaucyFi. My brain reeled. The targeter had deployed a nearly identical defi strategy on SaucyFi a year ago that A07 did with the treasury funds. We had all suspected that A07 could not be a sound actor, that the game must be rigged for them in some way. Is it possible that A07 had more than one horse in the race?
I raced home and packaged a short message to A07 and the targeter with the same ominous language A07 had used on us in Proposal 23:
Let’s play a game.
There are five of us left. You and I can win, or I share what I know with the other two and we kick both of your addresses out.
---
The IRS came knocking today. They want to know where the millions came from. It was a gift I told them.
Will they believe me?
###
Acknowledgments:
Cover Image by Matthew Plummer-Fernández - Cave Etchings #28 - https://www.fxhash.xyz/gentk/1015196
Daniel W. - https://objkt.com/profile/danielw/created
NEONZ by Sutu - https://objkt.com/collection/neonz
Tezzardz by OMGiDRAWEDit - https://objkt.com/collection/tezzardz