Neopets NFT

On September 22nd a press release was distributed announcing a new Cryptocurrency venture involving Neopets, known as Neopets Metaverse. This was from a reliable press release website that Neopets has used many times before. The announcement in full:

EL SEGUNDO, Calif., Sept. 22, 2021 /PRNewswire/ — Neopets is excited to announce a partnership with Raydium, an automated market maker (AMM) and launchpad powered by Solana, to bring a collection of NFTs based on characters from the 20 years of the Neopian history and lore. The greater Neopets community will now have access to digital memorabilia from their beloved brand.

Over the past 20 plus years, nearly 100 million people have engaged with Neopets characters both in the game and through merchandise and other branded items. Extending to NFTs give those users as well as NFT collectors the chance to experience and own part of the history of Neopets” says Jim Czulewicz, President and CEO of JumpStart Games, Inc., the company that owns Neopets. “For us this is another opportunity to extend the brand into new markets and to new users in a format that is both modern and valued.

Collectors and fans will have the opportunity to acquire one of 20,500 equally unique, algorithmically generated lovable Neopets NFTs with variable backgrounds, assets, clothing, and personality – 7 varying trait categories. An official launch date will be shared as we get closer but look for the drop to be in early to mid-October.Neopets is pleased to be partnering with Raydium’s DropZone as one of the first on the platform. Raydium’s DropZone is an initiative by Raydium to promote the growth of NFTs on Solana while supporting project teams like Neopets with the infrastructure needed to launch the collections.

***

Neopets itself made no such announcement (and still has not, really). In fact, initially the social media team were completely unaware the project existed or would be launching and incorrectly identified the project as a scam over Direct Messages.

This news was met with an immediate reaction from all parts of the Neopets community that can at best be described as lukewarm and at worse, outright livid.

A day later, on September 23rd, Neopets finally issued a statement on their Neoboard. It is interesting to note that this wasn’t an official announcement of the project, but a response to the press release. Neopets itself has still yet to officially announce the project in this matter. Regardless, the full text of the message was:

Valued Neopians,

We want to thank you all for sharing your thoughts, feedback, and concerns with us regarding the new line of NFT’s created in partnership with Raydium. We understand that our recent announcement may have created more questions than answers and we want to take a moment to clarify some information about the future of NFT’s and Neopets.

Q: Is this a scam? Are you really making NFTs?

A: Our partnership with Raydium, Solana, and Moonvault is legitimate! You may have seen a recent photo from Neopets stating this is a scam; this was due to an internal miscommunication error, and we sincerely apologize for any confusion this statement may have caused.

Q: “Why are NFT’s more important than releasing new features?

A: The good news is that they aren’t! Please know that the NFT’s in question were created by a partner company and did not impact the release schedules of the Neopets Team in any way; features and content have been developed and converted without interruption and we’re excited to keep rolling out new features for the community in the future.

Q: “Why make NFTs?

A: JumpStart is always looking for new opportunities to drive our brands and product forward into the future. We are constantly seeking new ways for players to engage with us and we see NFT’s as a potential opportunity for the company in this regard. We are going to learn new things on this journey and want to encourage everyone to keep sharing their thoughts and feedback with us as we go so we can improve and adjust accordingly.

Q: “Aren’t NFT’s harmful to the environment?

A: We’ve made an effort to partner with Raydium, a company that hosts their NFTs on Solana which strives to be a more environmentally friendly NFT solution than competitors. If you’re interested in learning more about Raydium, check out their website here: https://raydium.gitbook.io/raydium/ or Solana here: https://www.solana.com

Q: “Why did an official announcement take so long?

A: As with any partnership, there are numerous groups involved and multiple moving pieces. We apologize that an official statement took us longer than we would have liked and we will be working internally to speed this process up in the future.

We understand that our venture into NFT’s may not be for all of our players, but want to reassure you all again that their development is happening independent of the support we provide to the Neopets site and players. We appreciate all of our players and value the time you’ve taken to share your thoughts with us. We hope you will continue to do so, and that the answers above provide a bit of clarity into the situation.

– The Neopets Team

***

This confirmed the legitimacy of the project but did not address any of the key concerns the community had with it.

So what is an NFT?

NFT stands for Non-Fungible Token. It is a form of digital collectible that exists on a blockchain, similar to those the famous Bitcoin uses. The technology of blockchains means that each NFT is verifiably unique. They are bought and sold using a variety of cryptocurrencies. However, it is important to note that while many NFTs are tied to digital artwork, what you are buying is *not* the artwork. You gain no rights to it whatsoever, nor any exclusivity outside of the NFT world. What you buy is essentially a digital receipt with the artwork on it. NFTs by themselves serve no other function.

Why are people so mad?

There are many different reasons people are opposed to NFTs, both in general and these specific NFTs. Here’s a rundown of some of the most common:

– NFTs are a pyramid scheme. NFTs follow many of the same principles as pyramid schemes and multi-level marketing schemes. Fundementally, due to the fixed supply of many NFTs, in order to maintain value in a secondary reselling market, demand must be increased. This means there must be an ever increasing number of new buyers to the market. Because these buyers are late to the market, they will see diminishing returns. This is, by definition, a pyramid scheme. Many pro-NFT individuals will try to deny this, but it remains fundementally true. NFTs exist as a bubble similar to the ‘dotcom’ bubble of the early 00’s and housing bubbles that occur across the planet. As with any bubble, when it bursts, and it will, those who have not already cashed their chips lose out.

– NFTs have a negative impact on the environment. This is true, however there is an important qualifier. More well known blockchains like Bitcoin run on a technology that requires vast amounts of electricity. This equates to the total energy consumption of a small country. *HOWEVER*, Neopets Metaverse will run on the Solana blockchain. This uses a different, quite new form of technology that uses vastly less energy, making it roughly equivalent to a large website at present. Solana will use more energy as it grows, but this will always remain vastly below other blockchains using older technologies. Pro-NFT users will often try to dismiss your arguments using this fact, but the truth remains we live in the 21st century when we can ill afford any emissions that we can do without. Given that NFTs serve no purpose whatsoever, we can do without their emissions no matter how small.

– NFTs serve no purpose. NFTs by definition offer nothing of real value. The art attached to NFTs can often be freely obtained elsewhere and enjoyed eternally simply by saving it to your computer. It is true that some NFTs are sold with extra uses, however typically in these cases what you are buying of value is actually the *other* stuff, the NFT remains just as useless.

– NFTs use stolen artwork. This is not always the case but it is true that many NFTs have been sold by people who had no rights to the original artwork. There is no system in place to police NFTs and there is nothing to stop any individual making an NFT of any artwork they come across. In the case of Neopets Metaverse, Neopets owns the rights to the NFTs they are selling so it does not apply here. However, in order to generate the NFTs Neopets Metaverse did steal the artwork off Dress to Impress (DTI), a Neopets fansite. More on that in the controversies section, below.

– Neopets NFTs have been tried and failed before. In 2018, Neopets launched a project called Neopets Cryptoquest that used similar NFT technology as a time limited collectible card game. It was vastly unpopular, selling only 1,819 card packs prior to closure. Both Neopets Cryptoquest and its parent company, Rarebits, are now non-functional. Players who purchase the packs report that they have been unable to sell the NFTs as they now hold no value.

– These NFTs are ugly. Neopets Metaverse intends to create 20,500 NFTs, keeping 500 back for staff and giveaways, and selling 20,000 of them. They will be randomly generated Neopets customisation images via an AI. Each Neopet will be a random species, colour, gender, emotion, and be wearing a random shirt/dress zoned wearable, hat zoned wearable, and background zoned wearable. This results in literally millions of possible combinations. Unfortunately, the majority of these customisations look like a dumpster fire. Some examples on the official website are below. These will be randomly generated at launch. You have no choice in what the NFT will look like.

Okay, but some people must like NFTs, right?

NFTs do have their supporters, even among the Neopets community that is overwhelmingly against them. Some people do buy NFTs to collect them. However, it is largely impossible to ever achieve a full collection of any NFT category.

The far larger category of those into NFTs is people hoping to resell them for profit. For that, the Neopets community is seen as low hanging fruit. There are speculators that can and will try and exploit Neopets players into thinking they are getting a deal.

Wider than that, Solana is a new blockchain with relatively few NFTs on it. Neopets is the first recognisable brand (and so far only) to offer NFTs on Solana. There is hope among NFT traders that this collection of NFTs will lead to wider, more mainstream adoption of Solana as a cryptocurrency. This will increase the value of Solana and any Solana NFTs these traders already own outside the Neopets brand.

What’s a metaverse?

This is a high level technology concept that doesn’t really exist at this time. The general idea is that you buy NFTs that can then be used in multiple different locations for a specific purpose. For example, you could by a weapon skin in one game as an NFT, and then log into a different game by a different provider and use that NFT to unlock the same skin in that game.

Due to the complexities of inter-company cross promotion deals it is incredibly difficult for this concept to come to fruition in any kind of mass market way. Given that Neopets exist on antiquated systems it cannot and will not be implemented into any metaverse project. It is therefore highly unlikely in this case that the ‘metaverse’ of Neopets Metaverse is anything more than a buzzword.

Who is making Neopets Metaverse?

Neopets Metaverse is being developed by third party developers and not the day to day Neopets team. Confusingly, staff at Neopets Metaverse sometimes claim the opposite.

Neopets Metaverse is also partnered with Raydium to deliver the NFTs, and both Cherrypicks and Moonvault to build the Neopets Metaverse site.

Raydium is an online marketplace for NFTs built specifically to run on the Solana blockchain. They will be the ones actually selling the Neopets NFTs. It was launched at the beginning of 2021.

Cherrypicks is a technology company based in Hong Kong that started in 2000. Like Neopets, it has been aquired by NetDragon, so can in effect be considered a sister company.

Moonvault is a venture capital company that started about 2 months prior to the launch of Neopets Metaverse. It was founded in Hong Kong by three former investment bankers. Neopets Metaverse is the only known project they have announced funding for.

You may also see ChizComm mentioned as the marketing company that initially gave out the press release revealing Neopets Metaverse to the world. They are based in Canada and have existed since 2013. They have worked with Neopets for many years.

Interestingly from the lack of their inclusion on the press release, it seems Neopets usual merchandising agent, the Carlin West Agency, was not involved in this venture. However, the lack of their inclusion may be an error.

How much is it going to cost?

At this stage, that’s unknown. Neopets Metaverse has yet to announce details. But previous NFT offerings have cost around 3 SOL (Solana’s currency) at launch. 1 SOL is around $150.

Controversies

Despite only just coming into existence, Neopets Metaverse has already managed to make several missteps that have further fostered growing unrest with the Neopets community.

Stealing Art from DTI

Soon after launch, users noticed that one of the sample NFT images on the Neopets Metaverse, a Dimensional Kougra, did not look the way it looks on the Neopets site (shown below comparison between the two).

A quirk of classic Dress to Impress (DTI), the Neopets fansite that mirrors the Neopets customisation tool, is that it includes image versions as alternatives to the native flash assets that existed prior to html5 conversion. These images are generated internally by DTI, and part of that process effectively flattens the images for Dimensional pets, causing them to look slightly different.

This visual artefact is *only* present on the image version of DTI. It does not exist on Neopets flash customisation, Neopets html5 customisation, the png versions Neopets exports from its customisation, or DTI competitors like Jellyneo’s Wardrobe.

DTI is the *only* source for this Dimensional Kougra and thus proves without question that Neopets Metaverse ripped its NFTs from a Neopets fansite rather than get them from Neopets directly.

When called on this theft, Neopets Metaverse made no apology or statement of any kind, but altered the image of the Dimensional Kougra to that of a Chocolate Kougra to hide the fact that the theft had taken place.

Retweeting NSFW accounts

On September 24th, as one of their first actions after being revealed as officially associated with the wider Neopets brand, Neopets Metaverse tweeted a congratulations to another NFT offering that features *very* non-Neopets safe content. It cannot be discussed here exactly what it was, but rest assured, it does not fit with a site like Neopets.

After being called on this, instead of apologising or deleting the tweet, Neopets Metaverse instead chose to accuse the Neopets fansite Jellyneo of spreading misinformation by taking things out of context. For clarity, Jellyneo had screenshotted the offending tweet and did not remove any context. Neopets Metaverse did send the congratulations.

Speculation

The above is all verifiable information. The following is based on my own speculation. Primarily, that the Neopets Metaverse project has been the pet project of someone high up in the Jumpstart or NetDragon corporate team, and doesn’t have the involvement of what you and I would probably call the ‘actual’ Neopets team.

Firstly, when the announcement was initially made, Neopets social team had no idea what the project was let alone that it would be launching that day. The Neopets social team typically post across all the Neopets social media to advertise new announcements. If the Neopets Metaverse announcement had been scheduled for that day, why would they not be told?

Even several days following the botched launch, there has still been no actual real announcement from Neopets. If they were expecting a launch, why was such a post not made alongside the Neoboard created to address the controversy?

Secondly, the language of the post appears telling to me. Notice that throughout the post refers to ‘Neopets’ and ‘we’. But when asked to address *why* NFTs are being made, the language immediately switches and leads with ‘JumpStart’. It is the only time Jumpstart is mentioned in the post. Typically, Neopets does not reference Jumpstart unless it needs to, prefering to maintain the idea of Neopets as its own, contained brand. This is an anomoly of language that stands out.

Thirdly, staff at Neopets Metaverse appear to be confused as to their position within Neopets. If the Neopets team was aware of the project would attempts not have been made to onboard them somehow so that they would understand where exactly they sit?

Finally, why were the images taken from DTI if there was knowledge and involvement from the main Neopets staff? TNT’s own customisation app exports pngs that are more accurate to life. Why were they not taken straight from the source, unless Neopets Metaverse did not actually have access to it?

Given, therefore, that it is entirely possible that this project has been implemented above the heads of the Neopets team, what assurances are there that any potential proceeds from the sales of the NFTs will be funneled back to Neopets instead of those within the company who have dreamt up this scheme? Questions that remain to be answered.