Azuki and The Rise

Azuki is a collection of 10,000 avatars released by a Los Angeles-based group of artists on January 12, 2022. Azuki, which features anime-inspired artwork, has been called a mix between the 3D action role-playing game The World Ends with You and the stylistic sensibilities of the iconic skateboarding magazine Thrasher. Azuki then quickly became a brand that resonates with many – from avid NFT collectors to regular folks.

All Azukis have different traits for their hair, background, clothes, and wearables. Owning an Azuki grants the user access to exclusive streetwear, NFT drops, live events and many more as a member of The Garden, a “corner of the internet where artists, builders, and web3 enthusiasts meet to create a decentralized future”. Each Azuki NFT can also serve as an identity in its metaverse, which the community plans to collectively build.

The initial Azuki NFTs were sold via Dutch auctions, starting at 1 ETH, and these auctions sold out in just three minutes. One month later, Azuki’s sales volume reached $300 million, and one of the rarest Azukis was sold for $1.4 million. At one point, within 30 days of launch, Azuki total sales surpassed that of CryptoPunks and Bored Ape Yacht Club (BAYC). However, it wasn’t until late March 2022 when Azuki truly exploded in popularity, with their floor price inching towards 40 ETH. In other words, Azuki mooned. At the time of writing, the collection’s overall sales volume sits at slightly more than 266,000 ETH, currently worth some $348 million. Now, it’s already the 5th most traded NFT collection to ever exist.

Six of the most expensive Azuki NFTs

Information from The Block also suggests that Chiru Labs is closing an upcoming $30 million Series A round, which would give Chiru Labs a total value between $300 million and $400 million after completion.

In under a year, Azukis have become the next blue chip NFT. As one of the fast-growing projects in the NFT space, Azuki’s path to prominence has been characterized by unrivaled hype and in-depth lore.

The world of Azuki

The Azuki Collection

The Azuki collection consists of 10,000 diverse anime-themed characters built on the Ethereum blockchain. The aesthetic of the artworks could be described as a combination of Cowboy Bebop and Samurai Champloo-style. The project has also hinted at deep lore behind the collection, and that these characters come with their own backstory. Azuki NFTs can be purchased on OpenSea or LooksRare. There are currently 5K owners of Azuki NFTs which now sell at an average price of 11.5 ETH.

Azuki Collection on OpenSea

Each Azuki is a randomly generated combination of traits and accessories, including hair, clothing, face, headgear, mouth, offhand, etc. Some hold swords, a cup of coffee, a skateboard, a Boombox, a few are smoking, while there are some appearing to have special powers that allow them to conjure a fireball or manipulate water.

The Azuki collection has a total of 12 traits and over 450 unique attributes. Each NFT falls into one of four distinct types: Human, Blue, Red and Spirit. At 0.97% rarity, spirits are the rarest types and command the highest prices. Blue and red types, with a rarity of 4.44% and 4.41%, respectively. Human types, at 90.18%, are the most common.

Four distinct types of Azuki

After the type, an Azuki NFT’s unique set of attributes is the most significant determinant of its price.

• Special Trait: Fireflies, Butterfly, Fox Fire, Smoke, Sakura, Fire, Earth, Water and Lightning.
• Rare Clothing: Golden cat, Golden sloth, Golden red panda, Golden frog, Yellow jumpsuit, Red panda kigurumi, Black oversized kimono and Black perfecto jacket.
• Rare Hair: Spirit long, Spirit bob, Black blonde half bob, Spirit ponytail, Spirit fluffy, Spirit goddess, Water, Brown dreadlocks, Spirit spiky and Fire.
• Rare Offhand Features: Golden zanbato, Golden sheathed katana, Golden monkey king staff, Golden Katana, Golden umbrella, Golden ticket, Golden fishing rod, Golden bat and Golden skateboard.
• Other Rare Features: Red bean earring, Blue bean earring, Lightning eyes, Fire eyes, Glowing eyes, Golden headphones, Red panda beanie, Heart eye patch and Lipstick kiss.
• Combinations: Red panda, Blue cat, Brown sloth and Green frog.
• Elements: Fire, Lightning, Water and Earth.

The BEANZ

BEANZ squad - Ash, Tao, Penny, Johnny G., Gus, Toshi, Link, Frida, Pip and Ed

The BEANZ, launched in April 2022, is a collection of 19,944 NFTs that literally look like Azuki Beans. Currently the floor price of the set is 0.909 ETH, with 69K ETH volume traded.

The BEANZ serves as a brand icon of Azuki and gives holders exclusive access to a Discord channel, merchandise, collectible drops, and many other perks. BEANZ is described as a small species that sprouts from the dirt in the garden. While they're earnestly driven by the desire to help their Azuki friends, some BEANZ simply can't resist the allure of the alley. Some like to be a sidekick, but others enjoy kicking it alone. Being helpful is in their DNA, but some have a slightly different definition of “helpful”. To communicate with one another, the little BEANZ creates noises. They also express themselves through gestures and graffiti.

BEANZ collection on azuki.com

Users can either pair BEANZ with their Azuki as the story progresses without altering the original Azuki NFT, or keep it alone as a BEANZ maverick. Like the Azuki characters themselves, each BEANZ has its own story, contribution, personality, and vibe.

BEANZ and Azuki pairings

The Bobu

Bobu, described by the company as a “core character in the Azuki universe” who enjoys sake and lives on his farm growing beans, is an experimental project of the Azuki community that seeks to revolutionize the way traditional intellectual property (IP) is built by creating a governance utility from the beginning. Bobu will be the first of many experiments to build The Garden together.

Bobu - Azuki #40

Bobu (Azuki #40) will be fractionalized through fractional.art into ERC-1155 tokens called Bobu tokens. Ownership of the tokens will be used for the governance of the Bobu NFT. This is in line with Azuki’s experimentation with decentralized IP governance in a way that hasn’t been done before.

Besides voting on matters relating to Bobu, Bobu tokens can be used to access exclusive channels on the Azuki Discord or linked to Twitter accounts (via Twitter Blue)  for a verified NFT profile picture. The total volume of Bobu is 4.3K ETH, the floor price is 0.057 ETH and there are currently 11.6K owners of Bobu.

Bobu’s actions

The Garden

The Garden is Azuki's version of the metaverse; “a corner of the Internet where art, community, and culture fuse to create magic. The lines between the physical and digital worlds are blurring and the rules are being rewritten”.

An Azuki NFT is a user's identity in this metaverse. The Garden serves as the town hall for the Azuki community and plans to incorporate a DAO which the $BEAN stablecoin will govern. The Garden will host exclusive streetwear collabs, NFT drops, live events, and more upcoming activities yet to be revealed.

Azuki’s Value

There are plenty of reasons why Azuki became a blue chip in such a quick fashion.

Anime Culture

Azuki avatars “resonate” with the audience, especially in Asia, where anime is very popular

Anime and manga are well-known cultural exports from Japan. It is derived from a shortening of the English word animation that describes all Japanese animated works. Interest in anime-related content has spread worldwide, as it has become popular with children and adults alike.

Data from Parrot Analytics shows that global demand for anime content grew 118% over the past two years, making it one of the fastest-growing content genres by that metric during the pandemic. The overall global demand that anime shared across all content genres was 7.11% in December 2021, up from 4.2% in January 2020.

Anime art is instantly recognizable due to its distinctive style. By embracing this ascendent medium, Azuki quickly won the hearts of anime fans, sending its prices and popularity soaring. In addition, the Azuki characters’ skater / street art style screams anti-establishment, which is also a growing trend that especially appeals to crypto & NFT lovers. Furthermore, the exquisite quality of the art including the unique traits and corresponding rarity tiers make Azuki an outstanding and highly-desirable collection in the NFT space.

As for BEANZ, the project is targeting the cute cartoon characters market which is very popular in Japan or Asia in general. The BEANZ reminds us of other infamous mascots like Hello Kitty, Kakao or Line - brands that have generated billions of dollars a year in the merchandising. The creation of BEANZ is not really for web3 veterans but for the Asian market instead. And this is definitely a wise approach; Onboarding Asian people into web3 helps Azuki to bring NFTs to mass adoption and realize its vision to create the largest decentralized brand for the metaverse.

Technological Innovation

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Azukis are minted on their own contracts: ERC721A. This allows collectors to mint multiple tokens at once for essentially the same cost of minting a single NFT. Azuki’s vision is to build a brand for The Metaverse together with their community, so the focus has been to optimize the contract and enable the community to spend as little as possible in gas fees when minting.

Other well known NFT projects like Antonym and TastyBones have used Azuki’s implementation of ERC-721A token showing its functionality and influence of Azuki within the NFT space.

Gas costs comparison between OpenZeppelin’s ERC721Enumerable vs ERC721A

Community Engagement

“A brand for the metaverse, built by the community.” Azuki recognizes the importance of a vibrant community, and makes this the top priority by emphasizing community ownership of the project. Since launch, the Azuki community has grown fast and currently boasts over 314.2K Twitter followers and 92.3K Discord members. These online social channels are well-moderated and provide a safe space for members to chill out and get to know each other.

The project also plans to organize various activities to mobilize their community in a scalable and meaningful way like hiring global ambassadors to run meetups for the community all over the world, help empower artists, educate the community on Web3, etc. Additionally, members of The Garden will get access to exclusive drops of streetwear, IRL events, collectibles and much more. The promise of more community rewards in the future undoubtedly makes this project - which is still technically in its infancy - extremely attractive to investors and collectors alike.

NFT Utility

NFTs represent volatile assets and are difficult to evaluate because they typically have no intrinsic value. Hype plays a significant role in determining the value of NFT collections, which makes them a risky investment. However, Azuki NFTs offer something more than hype because of their utility.

Holders of Azuki NFT will have access to The Garden, with plans for a line of streetwear collabs, Azuki merch, NFT drops, live events, private Discord channels, and more. Each Azuki NFT can serve as an identity in the metaverse, which the community plans to collectively build. There have been several events in 2022 including the Azuki Garden Party and NFT.NYC. Azuki holders also received different Azuki merchandise such as the Twin Tigers Jacket.

Azuki Twin Tigers Jacket

Additionally, the user-owned IP that each Azuki owner is entitled to opens up a world of possibilities, including manga, video games, and even music labels. These, along with the fashion component, are important parts of the metaverse story.

Azuki NFTs have captured the hearts of many art lovers because of their high quality and distinctive style. Some own Azukis purely for art's sake, rather than as a financial investment, but of course they hope these digital collectibles will appreciate with time.

Azuki’s Physical Backed Tokens PBT

In October, Chiru Labs announced its innovative open-sourced token standard Physical Backed Tokens (PBT) which proves that Azuki is diving deep into the web3 space and this was just the first step to shaping its future. The project has also provided a decentralized way to authenticate and track the full ownership lineage of physical items, all completely on-chain and without a centralized server.

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By implementing a cryptographic chip called BEAN Chip, Azuki allows users to experience ‘scan-to-own’ (by phone) with physical items.

At present, PBT can be used for:

• Decentralized authentication of goods: Authenticate a physical item by scanning it with a phone.
• Tracking ownership lineage of physical goods: Verifiably prove the past and current owners of the item, enabling brands to build product experiences for their audiences.
• Using physical products to create digital experiences: Owning a digital token can unlock physical drops, and now owning a physical product can unlock digital experiences.

PBT introduces a new dimension for new experiences and storytelling. Holders now can build a collection that captures both the digital & physical, trade authenticated items, or participate in real life quests. And this is only the tip of the iceberg for the Azuki community & beyond.

Azuki’s Golden Skateboard

Azuki just completed an auction for eight Golden Skateboards which will also be redeemable for physical Golden Skateboards with the lowest and highest winning bids coming in at an even 200 ETH and 309 ETH respectively. These skateboards are all among the most expensive skateboards ever sold. According to the project, the Golden Skateboard is a marvel of art & technology showcasing their first implementation of PBT, which paves the way for a new era of storytelling.

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Talented Team

A project is only as good as the team behind it. And the team behind Azuki is Chiru Labs, a group of Los Angeles-based artists and developers with backgrounds in crypto, technology, and gaming. The team started with 4 members having expanded to a team of 8, with plans to onboard more members to the team. Most of the team are anonymous, but one of the key players in Chiru is relatively well known in the gaming sector, Arnold Tsang (steamboy). He was the Character Art Director at Overwatch, the team-based first-shooter game from Activision Blizzard that has 60 million total registered players. As the lead artist for the high-profile video game, he adds credibility to the project.

Other core team members include:

• Zagabond: DeFi programmer and former big-tech alumnus
• HoshiBoy: Y Combinator alumnus
• 2pm.flow: Former Google, Y Combinator alumnus
• location tba: Ex-Facebook software engineer

Despite being anonymous, which is a negative for building trust, the team's level of commitment and professionalism seem to stand in for them.

Azuki te

The Fall

Azuki is not only notorious for its meteoric rise to popularity and success, but also for a shocking controversy that completely reversed its momentum and put the project in very real danger.

In May 2022, around the same time the crypto and NFT markets as a whole were trending downward, Zagabond, Azuki’s creator, published a blog post discussing how he and the original founding team had previously launched and later abandoned three other NFT projects, including CryptoZunks, Tendies, and CryptoPhunks, framing those as a learning experience.

The announcement was immediately met with backlash in the NFT community, especially the people who invested in the failed projects, alleging that with his three previous projects — he was guilty of committing the biggest faux pas in the community: the rug pull. Even though Zagabond later apologized on Twitter, the Azuki collection’s floor price declined roughly from 19 ETH ($41,800) to about 10.9 ETH ($24,000) or nearly 50% at that time.

Within hours after the announcement, Azuki price dropped nearly 50%

However, seemingly against all odds, Azuki has managed to move past this scandal and continues to prosper and progress their vision. It’s still one of the biggest NFT projects around and still has a loyal community, even if prices haven’t returned to previous all time highs.

What’s next for Azuki?

The definition of metaverse in Azuki’s site is controversial, to say the least. Azuki calls its gameplan the “Mindmap”, stating that the project’s vision is to “create the largest decentralized brand for the metaverse that is built and owned by the community”. The Mindmap is broken down into six steps. The first two, “Vision & Value” and “Community” have already been completed. Step 3 — “Metaverse” — is currently in progress. According to the company, they’re exploring the possibility of developing a video game.

“Many will try to create one, but few teams have the experience and background to build a genuinely great game with mass market appeal and scalability. Though the core team has the experience, it's a huge endeavor nonetheless. If we do it, we'll do it right”.

After addressing the metaverse aspect in their Mindmap, Azuki will release physical merchandise such as streetwear and collectibles, along with multiple IRL events to expand their reach beyond a purely digital experience. Besides, aiming to expand its limitation, Azuki is attempting to develop its own metaverse and bridge between the physical and digital world by creating a new type of media like meta-games, interactive experiences, community incentives, and unique ways to grow an IP.

In order to realize its vision of creating the largest decentralized metaverse brand that built and owned by the community, the project is also exploring the prospect of taking their 2D avatars and converting them into 3D models that will allow holders to enjoy an immersive metaverse experience like no other.

Finally, Azuki will announce partnerships with companies that will work with the project to create a DAO and eventually $BEAN, a token that will be used in the Azuki-verse.

The sixth step in Azuki Mindmap: Seedlings

With an exciting roadmap and engaged community, we can hope that Azuki will only continue its rise to the top as one of the most successful NFT projects to date.

The Bottom Line

The Azuki anime-art collection made a grand entrance into the $44 billion NFT market with the objective of becoming the largest decentralized brand for the metaverse that is built and owned by the community. Right now, Azuki is in a good position to be a leader in this space; still, it’s impossible to determine with any certainty that Azuki NFTs will stand the test of time. If it lives up to its potential and delivers on their ambitious promises, then Azuki has a home in the pantheon of the most successful NFT collections ever. If it doesn’t and the hype eventually fades, then it will be remembered as just another case of “what if?”