In the crypto markets of 2023, there have already been a plethora of noteworthy updates including Shanghai Upgrade, the brc20 standard, Dookey Dash, and much more. However, as these highlights span different areas within the crypto space, the attention of crypto users is naturally divided.

But for those immersed in the NFT markets, the most exhilarating development this year has undoubtedly been the extensive implementation of the Ordinals Protocol, enabling a host of prominent NFT projects to debut on the BTC network and causing quite a stir in the market.

Among them, DeGods, a top-notch NFT project from Solana, has taken 535 NFTs that were previously destroyed and redeployed them on the BTC blockchain. This action stems from when the project was initiated in 2021, during which 535 PFP NFTs were destroyed to limit supply.

This move quickly sparked excitement among NFT enthusiasts. It’s important to realize that since entering 2023, the most significant development for the DeGods NFT project has been its migration from the Solana network to Ethereum, with the project team having shifted their focus to the new project, y00ts, in 2022.

For those who continue to hold DeGods NFTs, this might signal the commencement of a new wave of activity for the project.

What is DeGods?

（Image source:phemex.com）

DeGods is a deflationary NFT collection built on the Solana blockchain, bolstered by a collection of 10,000 DeGods designed to shrink in number and the DUST protocol ecosystem.

By owning a DeGod, users will have exclusive access to DeDAO, which includes entry to the DeGods Discord community. This community comprises some leading whales, Alpha analysts, and contributors within the Solana ecosystem.

Additionally, DeGod holders will accumulate DUST daily. DeDAO continually creates utility for DUST by developing the DeGods ecosystem and collaborating with other Solana projects. As a result, DUST has been integrated into other prominent ventures including Play-to-Earn games, casinos, and betting platforms.

The style of DeGods NFTs reflects a certain taste of the designers, combining the concept of Gods with death, and by this theme, utilizing the project’s native token, DUST, to implement the deflationary mechanism of the NFTs.

Within the DeGods ecosystem, DeGod NFT holders can choose to destroy their DeGod to obtain DUST, and the rarer the NFT, the more DUST the user will receive. It’s important to note that holders can only destroy one DeGod daily within a single wallet.

In April 2022, the project team introduced the new DeadGod NFTs, which allow users to convert their DeGod NFT into DeadGods NFTs for 1,000 DUST. This collection is exclusively derived from DeGods mutations and there is no oversupply.

（Image source:twitter.com）

Interestingly, a DeGod that is staked can directly mutate without the need to unstake, and this transformation doesn’t affect the scarcity of the NFT. The staking reward is 30 $DUST per day, and it’s worth noting that the DeGod cannot be burned again.

This is because, according to the story, a God that has died once cannot die again.

The above information provides a basic introduction to the DeGods NFT project. Launched in 2021, this PFP (Profile Picture) NFT project quickly became one of the top star projects on the Solana network.

During most of 2022, however, DeGods NFT couldn’t sustain the heat it initially generated. The project attempted to add value to the native token $DUST by creating an NFT burning mechanism. Still, the excessive dependence of $DUST’s economic design on the Solana ecosystem led to significant setbacks later on.

On another note, the Solana ecosystem lacked high-quality NFT projects compared to Ethereum’s early days. DeGods NFT, upon its inception, received strong support from Solana. However, a series of subsequent events disrupted the initial plans, and the roadmap for the DeGods NFT project remains unclear.

What is memorable, though, are the impressive results DeGods achieved when it first launched on the Solana ecosystem. A trading volume of 62,656 SOL, equivalent to about two million US dollars, within two hours was truly astonishing. The floor price also continuously hit record highs, but all of this became a thing of the past as the Solana ecosystem evolved.

DeGods and Solana

（Image source:solana.com）

In 2021, following the explosive growth of the NFT market, Solana quickly positioned itself and launched several representative NFT projects, including DeGods NFT, channeling ecosystem resources towards them. With its comparatively lower fees, Solana pursued Ethereum in the NFT space, gaining traction, especially with the success of the Degenerate Ape Academy NFT project, which instilled confidence in investors regarding Solana’s ecosystem.

DeGods NFT, taking advantage of this wave, became one of the most notable top-tier NFTs within the ecosystem. As Solana’s NFT standards were established and integration with OpenSea took place, the NFT projects in the ecosystem experienced further growth.

However, during this time, DeGods NFT, employing a deflationary mechanism, was seen by many as having strong potential for the future, especially concerning its native token $DUST. Even though the launch of DeadGods NFT and y00ts NFT indicated that the project team would initiate a series of actions around $DUST, the advent of a bear market saw DeGods NFT quickly losing steam. Nonetheless, the project continued to rank high regarding trading volume within the Solana ecosystem.

With the impact of the FTX incident, Solana’s ecosystem took a major hit, and numerous projects began to exit. DeGods NFT and y00ts NFT followed suit, migrating to Ethereum and Polygon respectively.

Looking back, the events towards the end of 2022 not only dealt a severe blow to Solana’s ecosystem but also disrupted the NFT sector’s momentum within it. Solana’s foundation in the NFT domain was inherently weaker than Ethereum’s established presence. The collapse of key financial sectors triggered a domino effect, making DeGods’ decision to migrate understandable.

This process wasn’t abrupt. As confirmed by a representative of the Solana Foundation, the DeGods project team had asked for $5 million to stay within the Solana ecosystem. However, the DeGods team never made any official statements regarding this.

Additionally, y00ts’ migration to Polygon was not without its tribulations. Polygon offset the cost through grants from its partner fund. From these episodes, it is evident that the DeGods project team’s efforts to secure resources for their venture were both valiant and steeped in sagacity.

Deflationary Dynamics of DeGods

Revisiting DeGods NFTs, we have previously touched on their basic mechanics. Launched in the Solana ecosystem in 2021, DeGods diverged from the typical PFP (Profile Picture) project category by incorporating a deflationary design. This deflationary model integrates the later introduced native token, $DUST, and DeadGods NFTs.

However, considering the widespread use of $DUST within the Solana ecosystem at the time, it’s worth noting that DeGods’ deflationary model was more dependent on external factors compared to the NFT economics of many GameFi projects.

Put simply, DeGods was too heavily dependent on the Solana ecosystem, preventing the project from establishing a comprehensive and closed deflationary model.

（Image source:asiacryptotoday.com）

For NFT holders, DeGods provided a limited range of use cases, including acquiring $DUST through staking. However, this scene has evolved with the introduction of DeadGods and y00ts, offering a wider array of applications.

Fundamentally, DeGods uses a burning mechanism to produce $DUST, while the introduction of staking adds momentum to the release of this native token. Building on this, DeadGods NFTs were introduced to support the value of the NFTs themselves. Finally, the roll-out of y00ts in the external market opened up even more possibilities for ecosystem expansion.

At the heart of it was the release and value growth of $DUST. The DeGods project team devised a relatively simple economic model, initially designed around Solana’s SPL token standards, treating it as a circulating token within the ecosystem.

To give $DUST value, the team opted to burn DeGods NFTs in the process. With zero initial supply, three release cycles were designed, each halving the output with a maximum supply set at 33,300,000 tokens.

Moreover, since burning DeGods NFTs only furnished $DUST with the initial value, the focus for long-term token generation shifted towards staking. This meant that with each halving, the $DUST rewards from staking would decrease by 50%, aligning with the halving cycles.

The three halving cycles were designed to release 16,650,000, 24,975,000, and finally, 29,137,500 $DUST tokens.

Notably, $DUST didn’t engage in further distribution designs. Essentially, it was meant to serve as a circulating token within various applications in the Solana ecosystem, but rapid market changes rendered it unable to meet these initial expectations.

Since its launch, $DUST’s price has steadily declined from an initial high of $3. Particularly during a slump in the Solana ecosystem, its price hovered below $0.5 for an extended period. It wasn’t until DeGods announced the removal of royalties and subsequent migration to Ethereum that the price gradually began to climb back to the $2-$3 range. However, with a total market capitalization of less than $2 million, the token is no longer in the limelight.

The Cancellation of Royalties and its Connection with Ethereum

Typically, for any NFT project, the royalties generated from trading are indispensable funding sources. However, DeGods NFT employs a deflationary mechanism which theoretically leads to a decreasing total quantity of DeGods NFTs as $DUST circulates and with the steadiness and substitutability of the DeadGods NFT series. Consequently, the earliest DeGods NFT series might see a decrease in their share of royalty earnings.

However, post-launch developments made the extensive circulation and application of $DUST challenging in the short term. In this scenario, it’s reasonable for the project team to take steps to stimulate public interest and draw attention.

（Image source:twitter.com）

In October 2022, Dust Labs, the team behind DeGods, announced the removal of a 9.99% royalty fee on all transactions across its NFT series. While not a total elimination, this move did create a buzz and stimulated the trading of the project’s NFTs in secondary markets. Nonetheless, it didn’t have a substantial impact on the project’s deflationary mechanism, and $DUST’s market performance remained sluggish, further declining amid a subsequent crisis in the Solana ecosystem.

It wasn’t surprising that DeGods chose to migrate to Ethereum. After all, for NFT projects, evolving within the more mainstream Ethereum ecosystem is a sensible choice.

In April 2023, DeGods NFTs debuted on Ethereum, performing well. Over two months, the series achieved a total trading volume of 32,171 ETH, with single-day trading surges reaching 224%, and the highest sale price for an individual NFT hitting 99 ETH. Floor prices were around 9 ETH. While DeGods might not compare with some of the star NFT projects on Ethereum, achieving this much within two months demonstrates that DeGods holds its own among many of Ethereum’s established NFTs.

For the project team, the future holds even more promises. Thanks to the foundation established during its time on Solana, DeGods has gained some recognition among the global crypto community, with ongoing attention from communities in different countries and regions. Early-stage derivative products based on the NFTs continue circulating, and various elements suggest that the DeGods project still has potential.

This is further supported by the attention drawn when 535 DeGods NFTs were deployed on the BTC network earlier this year. The crypto community has not forgotten this once-beleaguered NFT project and believes that the Ethereum ecosystem will offer it better development opportunities, rather than allowing this well-plotted venture to fade into obscurity.

（Image source:degods.com）

DeGods and y00ts

The DeGods project has had its share of challenges, unlike top-tier NFT projects such as BAYC or AZUKI. However, during its early stages, it experienced significant success. For Solana, which aimed to become the “Ethereum killer,” the NFT sector played an increasingly vital role in its ecosystem development.

Starting from the second half of 2022, the arrival of the crypto winter brought a series of setbacks to Solana. Scandals like DeFi data manipulation and large-scale thefts surfaced, coinciding with a sharp decline of up to 90% in the platform’s native token SOL.

The subsequent FTX incident delivered a significant blow, hindering the recovery of Solana’s ecosystem even today.

Nevertheless, for the DeGods team, that particular time marked the planned launch period for their second NFT project. Due to a hacking incident in June, the original NFT series, named Duppies, was forced to rebrand as y00ts, with the project going live in September.

（Image source:metaroids.com）

As a product from the same team, Dust Labs aimed to interconnect all its NFT series to form an integrated ecosystem, thereby establishing a certain relationship between y00ts and DeGods.

As DeGods rose to become a leading NFT project within the Solana ecosystem, the launch of y00ts naturally attracted the attention of many crypto enthusiasts.

The total supply of y00ts NFTs was set at 15,000, and each DeGods NFT holder had the opportunity to mint one y00ts NFT. At the project’s launch, 8,956 y00ts NFTs were available, while the remaining allocations were obtained through the y00tlist scholarship program, which required applicants to apply for minting eligibility. Additionally, 100 slots were reserved for a lottery, with participants purchasing lottery tickets using $DUST tokens.

Ultimately, all qualified participants needed to pay 375 $DUST to mint a y00ts NFT. However, those who received NFTs through the y00tlist scholarship program were given mystery boxes that required manual opening to reveal the y00ts NFTs.

（Image source:blocktempo.com）

The launch strategy employed by y00ts NFT was reminiscent of many prominent NFT projects that utilized airdrops while releasing their second-season NFT collections. y00ts NFT, like these projects, aimed to strengthen its user base through this distribution method.

Due to the transition from DeGods NFT to DeadGods NFT, a significant portion of the airdropped y00ts NFTs went to existing community members of the original project. While this may have been less favorable for new users, it instilled a sense of anticipation among DeGods NFT holders.

Furthermore, y00ts NFT implemented a whitelist application system, which not only ensured the authenticity of users but also provided them with modest returns. As a result, y00ts NFT enjoyed a promising start.

Importantly, Dust Labs envisioned y00ts NFT as a catalyst for its content creation economy, focusing on the production and trading of derivative products within its ecosystem. This vision encompassed the pivotal role of y00ts NFT and its association with staking and utility scenarios involving the $DUST token. At the time, many crypto enthusiasts believed Dust Labs aimed to create a Solana-based equivalent of Yuga Labs.

With its versatility and wide range of applications, y00ts NFT garnered significant interest from various user segments, particularly due to the team’s strategic blueprint that emphasized long-term growth through a content creation economy. This blueprint seamlessly integrated DeGods NFT and the $DUST token protocol, resulting in an impressive market performance for y00ts NFT.

Unfortunately, within a few months, the crisis within the Solana ecosystem disrupted Dust Labs’ plans. After achieving a historical trading volume of 3,236,861 SOL, y00ts and DeGods migrated away from the Solana ecosystem.

In March of this year, y00ts NFT debuted on the Polygon network, bidding farewell to its past. However, y00ts NFT has yet to replicate the success of DeGods, recording a modest total trading volume of 5,810 ETH to date, with individual prices stabilizing at around 2 ETH. Stripped of its original public chain ecosystem, y00ts has seemingly lost its former allure.

Conclusion

However, the story of DeGods and y00ts is far from over. The Dust Labs team showcased their impressive ability to build ecosystems during the Solana era, establishing their own brand through a narrative approach that revolves around content creation and NFTs.

Based on the current situation, Dust Labs’ NFT projects are transitioning to a new environment. It is possible that with the advent of the next bull market, they will bring forth a new narrative for their existing NFT ecosystem.