A long time ago in a galaxy far, far away…

The future of NFTs was held in the balance as two marketplace titans met on the digital field of battle.

We’ll give you more info later, because unlike Star Wars, we put our informational scroll at the bottom, not the top. See you down there!

Espresso Shots

☕️ Coinbase's Pleasant Surprise 😱 🎉

Despite the frigid winds of cryptowinter and the tumult across the space, Coinbase has reported that it beat revenue expectations for the fourth quarter of 2022.

Wall Street expected Coinbase to show $581 million in revenue, but Coinbase came through with a moderately more impressive $605 million.

Though Coinbase’s trading volume fell 66%, mostly because the overall crypto market capitalization dropped $1.5 trillion in the past year, Q4 represents a silver lining to an otherwise dark cloud.

While the news is ultimately a win for Coinbase, what investors are waiting to see is if more users will return to the platform, something that hasn't happened yet.

It’s mixed news. Sort of like how my parents hoped I’d have a six-figure salary and a house in my 30s, instead of just leaving a string of fatherless grandchildren across the country.

☕️ Fake AI Tokens on the Rise 🤖 🪙

In the enthusiasm surrounding the launch of Bing’s AI version of its search engine, scammers are capitalizing on the opportunity by launching fraudulent Bing AI tokens.

The AI boom has been great for several, legitimate, AI-based tokens such as Fetch (FET), Ocean Protocol (OCEAN), and SingularityNET (AGIX).

AI tokens have risen a whopping 250% in the past month.

In a mad dash to take advantage of the AI hype, 20 tokens have been created with the name, BingChatGPT. These tokens, of course, have nothing to do with Bing or AI.

If you're considering buying them... please don't. They're not real.

To combat this trend, ReCaptcha is considering adopting a new image test to prove you are a robot.

☕️ NF-Tee Off 🏌️ ⛳️

After the successes of DraftKings’ Fantasy NFL and UFC NFT leagues, they’re launching their newest venture, Reignmakers PGA Tour Experience.

In a similar system to their existing fantasy franchises, users will be able to mint and trade cards featuring real PGA tour participants with corresponding stats.

Tom Jeffs, the VP of media business development for the PGA tour, is very enthusiastic about the partnership with Draftkings and the effect this will have on fan’s involvement.

“You are living and breathing by that player’s success, and not only for that week in which you are participating in a competition,” Jeffs said.

“Now, you can’t wait to see the next time Max is going to tee it up, because you know that you have him in your roster— so you feel vested.”

Though if one of your players slices hard off the course and shatters the window of a residential home, it will be your responsibility as the NFT holder to spend the summer paying it off with chores.

A Word Foam Our Sponsor

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We know NFTs aren’t just one thing. Which is why we’ve created a home for everything they are, and everything they can be.

Come build your home at NFT.com/You.

Spilling the Beans

The NFT Wars Ramp Up 🤺

The OpenSea marketplace has long been considered the gold standard for NFT trading, but a new challenger has emerged, hoping to claim the throne.

Blur.

Blur is the latest NFT marketplace on the scene, one which has now officially overtaken OpenSea for the number one seed.

And how did they accomplish this staggering coup?

Well, they fought a war on a couple fronts.

First and foremost, they incentivized trading to a degree that OpenSea simply couldn’t compete with.

Incentivized trading is a hallmark of DeFi, and the trading volumes at Blur seem to reflect those patterns.

Just this past week, Blur had a staggering $460 million in Ethereum trades… even if some of those trades were likely users trading with themselves.

See, much of Blur’s appeal is centered around their reward systems.

Blur airdrops care packages to the top Ethereum traders on their platform. These contain proportional amounts of Blur’s BLUR governance token.

And you can still qualify for those giveaways if you’re selling NFTs to yourself.

It’s a practice known as “Wash Trading,” which is usually executed by a corrupt broker and trader working together. These falsified sales are intended to create hype around a commodity for the perpetrators to manipulate.

Except in Blur, users are acting as both the broker and the trader.

Blur is almost certainly aware of how people are using their platform. And it becomes even more readily apparent when studying the numbers.

Again, Blur generated $460 million in trades in the past week. OpenSea did a paltry $107 mil.

But the important numbers here are the unique wallets being used to conduct these trades. Despite the higher trade volume, Blur only had about 66,000 unique wallet addresses interacting with the platform.

OpenSea had 106,000.

But regardless of the sketchy nature of Blur’s superior trade volume, OpenSea let themselves get intimidated.

In the wake of the trading upset, OpenSea eliminated their 2.5% sales fee.

They’ve effectively cut off their only real form of revenue in an attempt to win back traffic, and it may work. The NFT wars are now becoming an arms race... and it's an odd one.

This arms race prioritizes low fees and fast trading, and places almost no emphasis on the artists or creators behind the NFTs being sold.

Now, we need to maintain some perspective here.

Though there are billions of dollars circulating in the NFT space and trillions in crypto at large, these two marketplaces are ultimately fighting over a couple hundred thousand active NFT users.

The NFT market is roughly 2% of the size of the entire crypto market, maybe less.

In other words, OpenSea and Blur, the big whigs of the NFT marketplaces, are fighting over scraps. But it is an entertaining fight.

And we like fights. So, we’ll stay tuned.

Is trading going to continue at this pace? A Blur so fast that human eyes can barely track it? Or is this new marketplace just a fad, destined to be washed away by OpenSea?

In the meantime: NFT.com sponsors this lovely newsletter, doesn't currently have marketplace fees for profile holders, and aggregates the other sites anyway.

Meme of the Day

You guys get it, right? It's blurry.

Crypto 101

DeFi: An umbrella term for Decentralized Finance.

DeFi refers to a specific facet of crypto which prioritizes decentralization and builds tools to support it, these tools are called DApps or decentralized applications.

These DApps are things like decentralized exchanges, decentralized wallets, decentralized lending... you get the gist.

The Last Sip

In honor of Coinbase’s pleasantly surprising fourth quarter earnings, here’s a list of our three favorite little surprises:

• When an Airpod falls out right as you’re putting laundry in the wash. Crisis averted.

• When several m&ms are stuck together, forming a super m&m.

• When as a child, your mother put a juice box in your lunch that was so old it had fermented and become mildly alcoholic. Your heady buzz lasted until about the end of Social Studies.

Stay Caffeinated,

Coffee & Crypto Team

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DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.