What started as a joke to celebrate April Fool’s Day has become yet another sign of a frothy, overeager market. A bonding contract designed to sell baseball cap vouchers sold 468 hats in just a few hours, raising over $100,000 and bumping the price to $3,700 per voucher.
Solana-based decentralized finance, or DeFi, platform Mango Markets announced the sale on Twitter this morning with the caption “ICO ALERT!” — a twist on the initial coin offerings of yore. According to a blog post, Mango’s “initial cap offering” is all about high fashion.
1/ ICO ALERT! Initial Cap Offering: Presenting the best caps in all the market caps.https://t.co/ArBzr5T1Fo— Mango Markets (@mangomarkets) April 1, 2021
“Yes, these are dynamically priced, with a limited supply of 500, bonding curve stuff, blah blah blah, but that’s not what this is about. This is just straight-up good clothing,” the team wrote.
Despite the cavalier, tongue-in-cheek attitude though, there were buyers aplenty: Over 400 of the 500 total supply of redeemable Mango Market Cap, or MCAPS, tokens sold within the first hour. This demand led to some significant user interface/user experience problems, with some users even having difficulty getting the “buy” button to work. Ironically, buyers can’t even redeem their MCAPS vouchers yet.
“We still haven’t finished writing it yet,” admitted Maximilian Schneider, Mango team member, of the “redeem” code.
The team only started developing the contracts for the sale on Tuesday, and one team member said that due to bugs, he had to buy a cap late in the sale for $2600. He remains in good spirits, however, despite the steep price.
“This is a long-term investment,” team member Dafydd Durairaj said, jokingly. “This is for my children.”
Buying crypto culture
Jokes aside, the team has made it clear that the merch sale was not intended as a fundraising tool, and certainly shouldn’t be treated as an investment.
“The motivation was as a practical joke,” said Schneider, noting that the Mango community has been clamoring for information about an actual platform token, which led to the team creating a “Wen token?” channel on their official Discord.
“We did it for the community. We’ve been getting a lot of support, and we wanted to build something for them to have a little fun,” Schneider said.
Mango’s team is currently internally debating over what to do with the funds the hat sale raised, with a likely outcome being that they’ll donate the proceeds.
However, in crypto — where Dogecoin can be a popular currency — the difference between a joke and an investment can often be difficult to predict. Unisocks, a similar project from automated market maker Uniswap that allows users to exchange SOCKS tokens for a pair of physical socks, is now considered a part of DeFi history.
Bafflingly, SOCKS are currently worth $104,000 per token, per Coingecko.
EGirl Capital member and noted Unisocks investor CL told Cointelegraph that SOCKS appreciated in value due to a confluence of factors.
“It came out during the very early days of DeFi, and it was the first of its kind. As DeFi and crypto grew, [SOCKS] slowly became a piece of history of DeFi and crypto,” they said. “It traded at tens and hundreds of dollars for over a year, before the scarcity really kicked in. Its supply is very well-distributed because no one thought it'd be what it is today, so no one really hoarded a large amount. Per Onchain analysis, most SOCK holders only own one pair of SOCKS, or even just a fraction, thus naturally providing a massive price floor.”
They cautioned that buyers rushing into MCAPS expecting similar returns might be piling into an overbought market, and that it’s worth playing a longer-term game.
“Price wise, I think Mango Caps is already a success, but the thesis for buying it is not the same thesis as SOCKS. I am not sure what the thesis on caps yet, it mostly seems like short term hype, since you can't just create a ‘historical’ or ‘cultural’ thing over night, but if Solana grew year by year, it could be worth more down the road.”
Likewise, Schneider said that the success of MCAPS is a sign of rampant speculation.
“I think people are really excited, and right now somehow everything can somehow have a value and there’s always someone trying to pay more for it. Even for, you know, hat vouchers, people are willing to play this game. The overall sentiment is, people want to buy-in.”