Author: Dao Ge
During the "May Day" holiday, a project called "Unipeg" (unipeg.art) suddenly went viral online.
This is a project built on Uniswap V4. The mechanism of this project is very unique; it is both an NFT and an ERC-20 token.
It is called an NFT because, like the NFT projects we are familiar with in the past, it is also a collection of 10,000 artworks (unicorns composed of pixels).
But behind each NFT is not the familiar ERC-721 or ERC-1155 token, but a peg to one complete Unipeg token (uPEG). That is, when a user holds one complete Unipeg token, there is a corresponding unicorn image in their wallet. This Unipeg token is the familiar ERC-20 token.
All Unipeg tokens are traded on Uniswap.
When a user buys uPEG tokens on Uniswap (for example, buying 1.2 uPEG), the integer part (1 uPEG) corresponds to a unicorn, while the remaining fractional part (0.2 uPEG) becomes token fragments, representing no unicorn.
Conversely, if a user sells off their 1 whole uPEG in pieces, the unicorn represented by that uPEG permanently disappears.
Similarly, if a user buys tokens but does not purchase a whole number of uPEG tokens, they will not receive a unicorn.
(For the formation mechanism of this token and unicorn, please refer to the link at the end of the article.)
Under this mechanism, an inevitable outcome is that unicorns will become fewer and fewer, and eventually, only uPEG token fragments will remain in the Uniswap liquidity pool.
Due to this unique operating mechanism, after the project was exposed, participants rushed to buy the rare unicorns, causing the token price to increase dozens of times within a few days.
Such a price increase has not been seen for a long time, whether in the NFT track or the ERC-20 track.
An "incident" occurred after the project became popular.
A hacker exploited a mechanism in the contract, cleverly washing the market repeatedly in a short period, continuously filtering out rare unicorns. This triggered a wave of panic selling among token holders, causing the price to drop significantly, before gradually stabilizing after the incident subsided slightly.
Regarding the NFT value of this project alone, based on past experience, for its price to stabilize and rise in the long term, I think it would need to meet at least one of the following two conditions:
- The project achieves impeccable and strongly consensus-driven uniqueness and primacy within the entire ecosystem, like CryptoPunks.
- The project can gradually develop a vast ecosystem, to the extent that any future participant in this ecosystem cannot bypass this NFT.
Let's look at the first condition.
Looking back, among the many NFT projects we have experienced (whether on the Ethereum or Bitcoin ecosystems), very few have truly achieved the uniqueness and primacy of CryptoPunks.
This is extremely difficult.
Even among the once extremely popular Bitcoin NFTs, it is still hard to find an NFT that can match CryptoPunks in historical value and possess strong consensus.
Therefore, it is quite difficult for this unicorn to meet this condition.
Now look at the second condition.
Apart from CryptoPunks, for most NFTs to maintain their price long-term and continue to appreciate, they require an ecosystem that can continuously grow and expand.
I once had high hopes for Bored Ape Yacht Club. But judging from the practice over the years, at least so far, it has not succeeded.
I also once had high hopes for the Bitcoin ecosystem, believing that if Bitcoin could develop its own ecosystem, the NFTs within it would have great potential. But practice over these years has also proven that, at least so far, it has not succeeded.
The only one that continues to make efforts and occasionally stirs up small waves in the NFT ecosystem is Pudgy Penguins.
It has been working hard and persisting, and has made several pushes so far. But the influence of each push is not long-lasting, and after the effect fades, its NFT prices fall back again.
I can only say that this project is still persisting, but it cannot be said to have succeeded.
So from this perspective, it is still too early to judge what the future value of this unicorn will be.
But if we look beyond the investment value of the project, from the perspective of ecosystem innovation, this project is remarkable.
"What makes DeFi great is that the platform carrying it, Ethereum, is an open, permissionless platform. As long as this platform exists, seeds of innovation will be planted continuously, and there will inevitably be a handful of geniuses and genius teams who streak across the sky of history, creating exceptionally powerful projects that will be remembered forever" (April 22, "My Attitude Towards DeFi: Cautious Now, Bright Future").
The innovation of this project is an innovation never seen before in the DeFi ecosystem, and also something never seen in the real world.
Although we cannot yet prove with examples and evidence whether this innovation has practical applications or where it can be used, it proves once again that this is a platform that carries innovation and can burst forth with innovation at any time.
As long as such a platform exists, we will surely see astonishing masterpieces again, and we will surely see world-changing works again.
Reference link:
https://x.com/798_eth/status/2050019560125063290
