This weekend’s episode of "Saturday Night Live" began with a skit poking fun at former President Donald Trump’s recently released, meme-worthy non-fungible token (NFT) collection.
“Seems like a scam and, in many ways, it is,” said James Austin Johnson, who played the 45th president in the show’s cold open.
According to data from OpenSea, the collection’s trading volume is 6,658 ether (ETH), or about $7.8 million at the time of publishing. Its floor price, which started at $99, has been hovering around 0.3 ETH, or $350.
The collection features 45,000 tokens in the style of baseball cards. In each collectible, Trump wears a different costume linked to rarity elements that allow users to enter a sweepstakes to win prizes like a zoom call with the former president or a cocktail hour at Mar-a-Lago.
In the wake of the project’s apparent success, internet sleuths have dug deep into the project and the parties behind the wallet addresses associated with Trump’s collectibles. Among the nuances and inconsistencies alleged on Twitter: the company that created the collectibles is hoarding a large amount of them; that the project poorly relies on stock imagery; and that most of the buyers opened new wallets without holding any cryptocurrency, sticking them with an NFT and no way to derive any future value from them.
The strange case of 1,000 NFTs
Over the weekend, Twitter user @NFTherder noticed something strange about a large number of the rarest NFTs in the collection. The user posted a thread explaining the nature of the transaction data of the contracts involved in the mint.
While the Collect Trump Cards site said that 44,000 of the 45,000 tokens created in the initial series would be available for users to mint, it did not specify what would happen to the remaining 1,000 tokens. Where another project might save those assets for a later date to revive demand, data suggests that the administrative wallet holds the remaining minted 1,000 tokens.
After the collapse of Three Arrows Capital, the crypto-hedge fund backed NFT collection “Starry Night” moved its tokens into a Gnosis Safe wallet, along with other valuable assets. It was likely done out of caution to hold the assets in one place to prevent any singular actor from moving these out of the wallet.
The Trump Trading Card site specified that there was a “strict limit of 100 Trump Digital Trading Cards per purchaser/household,” meaning that an individual or a group who did not have to abide by the rules for the general public was able to pick up a large swath of the NFT pool.
In addition, the mystery wallet isn’t full of second-rate NFTs. It minted 26% of the rarest 1-of-1 tokens and 28% of the autographed trading cards, according to NFTherder. These are the most valuable and expensive assets in the collection, respectively comprising 0.4% and 0.16% of the total tokens in the collection.
NFTherder told CoinDesk that not only do the wallet owners have the ability to inflate the price floor of the collection, but they also could have the ability to rig the sweepstakes and alter the competition.
“If this was a 10,000 unit collection about monkeys, the whole discord would be blowing up about how this is a rug and a scam and that the team is holding one fourth of the most rare supply,” said NFTHerder.
The curious marks and maker of the art
While people have been digging into the wallet addresses and collection sweepstakes, other Twitter users were delving into pop culture digital artist Clark Mitchell and the artwork he created for the collection.
On-Chain TV founder Morgan Sarkissian tweeted an image of one of the collectibles featuring the 45th president in a space suit that seemed to still have a visible watermark from Shutterstock.
She also uncovered an Adobe watermark in another token listed in the collection.
Other Twitter users have found inconsistencies in the artwork, with some of the creative assets used to build the collection apparently taken from stock images or Amazon costumes.
While Mitchell has worked on other projects such as artwork for Disney, Hasbro and Marvel, this isn’t his first NFT project.
Web3 researcher and Twitter user @Valuemancer uncovered that Mitchell also did the artwork for Sylvester Stallone’s SlyGuy NFT collection that never launched, according to the digital collectibles website.
The collection included similar creative assets, such as drawings of the actor paired with exclusive access to events such as the Ultimate Stallone Experience, a dinner hosted by Stallone for token holders.
Mitchell, Sarkissian, @Valuemancer and the SlyGuy NFT collection did not respond to CoinDesk by press time.
The shiny new wallets with no crypto
While NFT collections often attract a wide range of buyers with various stake in the game, Trump’s NFT collection had a large number of buyers that appear to be new to digital collectibles.
According to data from Dune Analytics, of the nearly 12,900 users that minted Trump NFTs, about 9,300 did not hold any cryptocurrency in their wallet for gas fees – the fee all users pay for a transaction on the blockchain. If a holder has no balance of either MATIC or wETH, he is "No Gas" holder. That means he can't list his NFT for sale until he get some balance into his wallet, the Dune dashboard shows.
This means that 72% of buyers were likely purchasing NFTs for the first time.
The total number of tokens held by holders with no gas is 21,420, according to Dune Analytics, which one Twitter user pointed out may be stuck due to the more advanced nature of trading on Polygon.
“It's more like a 20,000 set than 45,000,” said Tyler Warner, staff writer at Lucky Trader on Twitter, citing the data as one of the reasons why the tokens skyrocketed in trading volume.
Warner did not respond to CoinDesk by press time.
In a harsh crypto winter where NFTs are already subject to market vulnerabilities, celebrities releasing successful NFT projects or funding Web3 ventures seems like a promising sign.
However, when the project is executed before fully working its kinks out, it does not serve as a vehicle for mass adoption. Instead, it can onboard a new user base that is not familiar with cryptocurrency or the steps needed to make a sound purchase, analyze blockchain data for irregularities and fund wallet transactions.
As projects like these continue to rise in popularity, it’s important to educate holders, dig into the details and look beyond the hype.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.