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Moonbirds, digital owls with $281 million in sales, are in high demand among NFT collectors. Here’s why they’re so crazy with it:

Moonbirds joins the ranks of other highly successful compilations such as Azuki, Bored Ape Yacht Club, and CryptoPunks.

Though massive NFT sales aren’t uncommon, Moonbirds’ rapid success as digital art of cartoon owls surprised many in the NFT community.

What are Moonbirds, exactly?
On Saturday, the Moonbird NFT collection debuted, and it rapidly sold out in a fixed-price drop, as the industry phrase for a debut is known.

The Proof Collective, a group of 1,000 NFT collectors, was one of the driving forces behind the collection of 10,000 birds, which drew a lot of attention. Among the members are well-known NFT individuals such as Beeple artist Mike Winkelmann and investor Gary Vaynerchuk.

Kevin Rose and Justin Mezzell, cofounders of Proof Collective, are also well-known in the NFT community. Rose, for example, is a blockchain-focused venture capitalist at True Ventures and the host of popular cryptocurrency podcasts.

Proof Collective membership wasn’t inexpensive. According to NFT marketplace OpenSea, the average price for a Proof NFT, which symbolizes membership in the organization, was 1.99 Ether, or roughly $7,900 at the time. The current minimum price is 98 Ether, which equals $285,670.

According to Proof’s website, members have access to events, a secret Discord group chat, and collaborations. Moonbirds is one of these collaborations.

Anyone could enter a raffle to be guaranteed access to mint, or produce, Moonbird NFTs when they were released. According to the Moonbirds website, each raffle winner was granted one mint for 2.5 Ether, or around $7,500.

Proof members could also enter the raffle, but they were promised two Moonbirds for every Proof membership NFT they had.

7,875 Moonbirds were allocated to people who won the raffle, 2,000 to Proof Collective members, and 125 to the Moonbirds team for distribution.

According to CoinDesk, the Moonbirds drop was marred by controversy, with some alleging that bots rigged the raffle to their advantage and concerns that the project’s founders used inside information to buy Moonbirds with unusual features, potentially driving up their price in the future.

Moonbird owners may “nest,” or stake, their NFTs to “accrue extra benefits as total nested time mounts,” according to the company’s website. This means that NFT holders can acquire upgrades over time, such as “improved drops and awards.”

The success of Moonbirds represents the beginning of a company for Proof’s founders. Proof would use the profits to “create a new media company,” according to a YouTube video broadcast by Rose on Saturday.

Supporters of the Moonbirds consider the NFT drop and intended ecology as valuable, similar to what Yuga Labs accomplished with their successful Bored Ape Yacht Club, a top NFT collection that developed to become the epicenter of its own metaverse and ecosystem. Others, on the other hand, thought the price increase was strange.

NFT Ethics, a Twitter account that operates as a watchdog for the NFT industry, accused the Proof Collective of “wash trading” or influencing the price of its membership NFTs on Friday. When a seller is on both sides of a transaction in order to fraudulently inflate the worth of an asset. The Collective was also accused of “nepotism” for trading or offering free membership NFTs to family and friends, according to NFT Ethics.

“Wow, just wow, this is so riddled with falsities it’s ludicrous – invite me to any podcast, any time… you’re just making things up at this point,” Rose said on Twitter in response to the criticism.

Rose, Mezzell, and Proof Collective COO Ryan Carson did not respond to Fortune’s requests for comment.

As a ‘fundraising mechanism,’ NFTs
With approximately 70,000 ETH, or $205 million, in volume sold on NFT auction site OpenSea, some see this as a “changing moment” for the NFT market as a way of startup fundraising.

“Moonbirds is one of the first (so far) massively successful projects that is unafraid to be itself. Kevin [Rose] and Ryan [Carson] have been quite clear that they’re seeking money, that they’re not’selling art,’ that the money would be used to build a product, and so on,” commented Daniel Tenner, founder of startup funding provider Grant Tree, on Twitter.

On April 18, 2022, a correction was made: The last name of Proof co-founder Justin Mezzell was misspelled in an earlier version of this story.

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