The Azuki ‘Elementals’ Mint Mishap exposes the NFT market’s fragility.

On Tuesday, the non-fungible token (NFT) brand Azuki began selling its new “Elementals” NFT collection, which is a derivative of its popular original Azuki collection. This release was highly anticipated by passionate holders of Azuki, as it expands the anime-inspired Azuki ecosystem.

Collectors have been waiting for signs of growth from Azuki, which has teased plans for a metaverse platform, interactive experiences, physical goods, and a native token. Despite facing challenges such as a hack on its Twitter account and the founder admitting to abandoning past projects, Azuki has remained at the top of the NFT leaderboard.

To maintain momentum, the team needed a major win.

Enter Azuki “Elementals,” which NFT holders hoped would strengthen the project’s foundations and propel the brand forward. However, the minting process was plagued with technical issues, questionable mechanics, and allegedly duplicated artwork, causing the prices of Azuki and BEANZ to drop. As a result, holders were selling at a loss.

This mint mishap has broader implications for the NFT market, showing how even established NFT projects struggle to grow during a challenging bear market.

15 minutes to mint

In typical Azuki fashion, the Elementals mint generated hype before it even started.

Last Friday, Azuki held a token-gated event in Las Vegas called “Follow the Rabbit,” where they distributed a portion of the unrevealed Elemental NFTs to attendees. On Monday, the team announced the minting details, stating that the remaining Elemental NFTs would be sold in 10-minute rounds – first to Azuki NFT holders, then to BEANZ holders, and finally to the general public. The sale was a Dutch auction style, where the price of the NFTs started at 2 ETH and decreased by 0.1 ETH every five minutes until all NFTs were sold.

On Tuesday, eager Azuki community members rushed to the minting site to purchase NFTs at 2 ETH each. Within 15 minutes, all NFTs were sold out, generating 20,000 ETH in primary sales, equivalent to over $38 million at the time. One holder even spent over $1.5 million on several hundred NFTs.

Despite the initial appearance of success, many disgruntled holders took to Twitter to express their frustrations with the process. Technical difficulties prevented some Azuki holders from participating in the sale, leading to complaints.

In response, Azuki co-founder Location TBA apologized for the disruptions and attributed some of the issues to higher-than-expected traffic to the site.

“The team and I feel devastated by what happened. We wanted to create an amazing experience for all of you,” said Location TBA. “I take personal responsibility for what happened and should have extended the presale windows.”

‘Basically identical’ artwork

Frustration continued to mount after the mint when the Azuki team finally revealed the NFT art to anxious holders. Soon after, several collectors alleged that the Elementals collection featured strikingly similar artwork to the original Azuki collection – even down to the metadata of some NFTs.

While some collectors were excited about their NFTs, others were disappointed in what appeared to be a perfunctory artistic endeavor.

Twitter user PlantedSlightly wrote in a since-deleted tweet that the move felt “back-handed” as a dedicated collector.

“Collecting Azukis always felt special, doesn’t feel like that today for me. I’m more sad than angry or disappointed,” tweeted PlantedSlightly. “99% of the mistakes were too obvious to miss.”

User Cirrus NFT pointed out an even more egregious dupe, with what appeared to be two identical NFTs in the same collection. Another user pointed out a similar issue across multiple pairs of identical NFTs .

Azuki co-founder 2PM Flow was quick to attribute the error to a “technical glitch where the metadata for a few tokens were processed incorrectly.” It appears that the metadata for these NFTs has since been corrected.

In the wake of the artwork’s reveal, some users speculated that Azuki purposefully diluted the value of its collection through a massive increase in the supply – an accusation that Azuki later apologized for .

The challenges of a vicious bear market

In the hours following the Elementals mint, the floor price of Azuki plummeted as collectors responded to the controversy. While Azuki said that the mint was meant to “welcome new members into the community,” over 94% of the Elementals NFTs remained in the wallets of existing Azuki members, Nansen tweeted on Wednesday .

Pseudonymous Twitter influencer NFT God suggested that the mint reflected a broader dilemma that profile-picture ( PFP ) NFT collections – popularized on social media during the bull run – face during market downturn.

“They had 2 options: Do nothing, people sell, and the price goes down, or dilute their collection with even more NFTs, people sell, and the price goes down,” said NFT God.

NFT collector and creative Charlotte Fang told blockchain that in recent months, PFP projects have been forced to find new ways to extract value from their holders in order to stay afloat.

“The classic generative PFP NFT mint model is a lottery that normally provides the opportunity to profit immediately by flipping unrevealed mints due to oversubscription as people speculate on the chance of pulling a rare [trait],” said Fang. “When collections over increase the supply or use auction models, they eliminate this speculative opportunity in exchange for maximum extraction, harming their own audience’s ability to profit.”

Azuki later admitted that it “missed the mark.”

“Our goal for Elementals is to grow the Garden, welcome new members into the community, and most importantly to expand the Azuki universe and set a foundation for a decentralized IP with deep lore,” the Azuki team said. “However, our ambitious goals led to a new collection which confused the community on the tangible differences with the original Azuki collection.”

The brand has since airdropped new NFTs called “Green Beans” to select collectors.

As PFP collections fight for dominance in a changing NFT landscape, it is important for creators to find solutions that deliver value back to their communities. Still, it appears that even shaky mints have the ability to pump much-needed movement into the NFT market.

According to data from Dune Analytics researcher SeaLaunch , Tuesday’s aggregated NFT marketplace trading volume surpassed 35,000 ETH, or just over $64 million at the time of writing – the biggest volume day since early March.

Edited by Rosie Perper.