How five Africans made the strongest NFT Ponzi on Solana - Part 2

Tokenomics, Derivatives, and Euphoria

1 January

Floor price: 20.99 SOL

Things were going much better than the team had anticipated. The community was amped, and more people were joining after seeing us featured on the front page of Magic Eden.

Our next goal was to learn how to create our token, $WOOD, and start distributing it to holders as quickly as possible. On our website, we teased "What is WOOD?" (you can read more about the origin story here). We realised we had to reserve a ticker for our token, and we were briefly devastated to find out that WOOD was already taken. Luckily, $WOOD was still available. For the total supply, we started doing basic mathematics, using the total supply of $BOKU as inspiration. We settled on 22 million $WOOD, with a base of 10 $WOOD going out per day per NFT.

Our dev, now CTO, Alfred, was a senior dev but had very little experience in web3 when Mindfolk was born. We tasked him with figuring out a staking contract to pay out the daily $WOOD drop.

After applying some first principle thinking, he quickly realised that essentially staking is the same as not listing on a marketplace. This led him to developing a tool that would withhold the $WOOD drop of any founder that had been listed on Magic Eden on that specific day, pinging their API to check for any listings. This system didn't require any form of smart contract and allowed holders to keep having custody of their Founders, a double win! The team is quite proud to know that we were one of the first projects that had pulled off non-custodial staking in the Solana space.

2 January

Floor price: 16 SOL

While still busy tweaking the tokenomics and coming up with future sub-collections, we ran into our very first hurdle - Finefolk.

In just two days, someone had put together a collection that very loosely resembled our style and minted out. The team was shocked. Despite their terrible art, the Finefolk team still had the audacity of reaching out to us to offer us 51% of their royalties in an attempt to legitimise their collection. Imitation is the highest form of flattery, but only two days and probably a few Fiverr gigs of expenses made it obvious they were here to exploit users.

We immediately contacted Magic Eden to have them remove it. They refused... Back then derivatives took up a lot of space on MEs homepage. It was a mess, but it was big business! So it made sense that they preferred to just let anything list and have the market decide. We had hundreds of users joining our discord asking us whether we're affiliated with Finefolk. We were such a small project back then that some users were even convinced that Mindfolk was a derivative of Finefolk. It was a really odd situation, especially for our artist Jurgens, and all we could do was deny our affiliation with them.

Many argue the approach of allowing derivatives is fair, but it was only a few days later when the Finefolk Twitter and Discord had disappeared, and their floor cratered. Later on in the year, we would find out that the guy behind Finefolk would end up becoming the infamous Balloonsville rugger - who would also end up becoming a Mindfolk whale and infiltrate deep into our private Discord channels before causing absolute mayhem. More on this will be divulged in a future post.

4 January

Floor price: 10 SOL

$WOOD had minted, and the first drops started going out. We contacted Raydium and started figuring out how to set up a trading pair and liquidity pool. We even set up a farm pool that would reward users for providing extra liquidity. It was quite overwhelming and a bit surreal for us. We'd only ever dabbled in some Defi protocols, and now we were creating our very own LP.

7 January

Floor price: 29 SOL

Alfred had just completed the "Workshop." On our website, users could connect their wallets and have their Mindfolk go through a 7-day training process, after which they would receive either a Lumberjack or Carpenter skill in their metadata.

Lumberjacks earned 13 $WOOD per day instead of the standard 10, but they only built other structures or vehicles at the regular speed.

Carpenters earned the standard 10 $WOOD per day, but they could build in half the standard time.

The first thing to be built would be Cabins, and eventually surfboards, skateboards and finally boats.

This game dynamic was inspired by Wolf Game which had blown up in the Ethereum space. It made for a lot of interesting discussion around strategy, but also added a lot of complexity to our system and pushed our tiny dev team to the absolute edge. No-one on the team was experienced with game design, we just winged it without any serious future projections of the supply and demand for $WOOD. In retrospect, it would've been great to have some kind of actuary type on the team, but things were moving so quickly and the market was loving every bit of it.

The Workshop had caused the amount of Mindfolk on the market to drop drastically. More than 660 of the total 777 Mindfolk were enrolled, and the floor price responded accordingly. The team was pumped, it all seemed so easy. With the 7-day period required, we had bought ourselves 7 days to come up with the next part of the puzzle.

11 January

Floor price: 36 SOL

Wood price: $2.40

The $WOOD/USDC trading pair was born, and soon after that our liquidity pool was up and stacked with liquidity from the mint. Trading started at a price of $1, but spiked all the way to a high of $2.97. Logging into the team wallet was a shock, as the price of $WOOD was registering on Phantom and inflating our wallet value with several $million.

We decided that we wanted to try to keep the price stable, so we padded the sell side of the orderbook with select limit orders. It didn't really help much, as the FOMO on $WOOD just kept increasing. All the holders were stocking up to be able to build their cabins immediately after training had completed. All the extra liquidity we provided had just accelerated the speed at which our users could play the game we had created.

With daily $WOOD drops now going out, even more pressure was added to keeping your Mindfolk off of the market. Listing counts dropped to as low as 14 on this day, which was another big factor around the major floor price pump.

14 January

Floor price: 84 SOL

Wood price: $3.52

The 7-day training period was now coming to an end for all of those that had started as soon as it went live, and we made sure that Cabin building was immediately available. Cabins cost 1200 $WOOD and took 6 to 1.5 weeks to build, depending on your configuration.

Why would you want a cabin though? Because that would double the amount of $WOOD your Mindfolk would earn daily, and each cabin could boost up to 4 Mindfolk. The FOMO got real as several of the holders bought up the outstanding amounts of $WOOD to get started with their Cabins immediately.

As $WOOD started flowing daily for several days, and with a price being established, many people had already started doing the "passive income" calculation. Cabins would double the income potential.

January 17

Floor Price: 130 SOL

Wood price: $5.54

The first elder auction was held, with elders being legendary Mindfolk that earned as much $WOOD as two Lumberjacks and built as fast as two Carpenters. The first auction was run on Magic Eden's platform, which had just launched a few days prior. The final price was around 140 SOL and won by "Casper", but the result was controversial as Magic Eden's new system did not reset the timer after Casper's bid slid in 2 seconds before the cutoff. Several bidders were upset about this.

Soon after, a deal was made between Jords from the Boogles and Casper for 420SOL. The involvement of the Boogles became more apparent to the public, which led to a sharp increase in the floor price once news spread.

The team was in a state of permanent euphoria, and mostly working on coming up with future plans to keep the holders happy and provide as much use for $WOOD as possible. Once the 100 SOL floor had been breached, life started feeling a little less real than usual.

January 24

Floor price: 233 SOL (high of 280)

Wood price: $6.49

This date marked the release of the first cabins, and the biggest pump in the floor price in Mindfolk history. The passive income potential of all Mindfolk had now doubled, sending shockwaves through Twitter as all the stats bots tweeted our insane “passive income” potential.

Interestingly, by this point $WOOD had already dropped quite a bit from its ATH of $10.59. Users were already cashing in on their wood gains, and now with cabins in the wild, $WOOD was flowing in vast amounts.

Plans for the boats had already been released, but the highly complex multiplayer staking system to make them work would take 2 months to build. After the month we just had, our developer was already showing signs of burnout, but still euphoric after seeing how quickly things can move in web3.

January 29

The month ended with the highest ever floor price of 290 SOL. We came so close to briefly flipping Boryoku Dragonz and claiming the #1 spot.

What follows from this day is what I would label as our fall from grace, but some might call it 11 months of chewing glass and staring into the abyss.

Tune in for part 3 and more 🙂