Don't Laugh: The Not-So-Funny Comedy Club NFT Debacle.
At the end of November 2021, Roberto Cardoso, along with his two brothers, José David Roa and David Roa, launched the Comedy Monsters Club (CMC) with an ambitious and seemingly groundbreaking concept of combining humorous performance with innovative blockchain technology. Initially met with great enthusiasm, and lofty hopes of a bright NFT future, the project was quickly overshadowed by the harsh reality of legal hurdles and dashed expectations from both its investors and the industry at large. Away from the CMC story, however, Venezuela is no stranger to humor. In fact, it has historically served to express dissent and somehow remain resilient in the face of prolonged chaos.
José David, one of the co-founders of Comedy Monsters and featured in Forbes Mexico as well as in various Venezuelan comedy shows and podcasts, was featured on Escuela de Nada, where he was identified as an "NFT expert". Utilizing his personal story of investing in Bored Ape Yacht Club as an example, he claimed to have made more than $300,000 by selling a single NFT. On the contrary, José David reminded the viewer or listener to conduct their own research before proceeding with a specific idea. In Nairobi's viewpoint, this could be interpreted in the wrong way by someone at the beginning of participating in the crypto market.
Cardoso's desired outcome for CMC was for patrons to see its full potential, giving emotional, tangible and monetary benefits. Has never been stipulated explicitly how the team would ensure that NFTs maintain or increase in value. The portion posting this info on the website was confined; consisting of three sentences only, "the rarer the NFT, the more potential it has of earning higher returns, subsequently leading to more significant worth.” Upon its launch in November 2021, the NFTs were available to buy with .1 Ether as the cost, ETH tokens had lowered to an exchange rate between $400-500 by that point. Furthermore, the purchasers couldn't view the monsters until 10,100 of the NFTs had been sold.
The members of an online community known as CMC feared their project wouldn't be successful, so to prevent this from happening, they thought of various advertising strategies to promote the wildly popular Mutant Ape NFTs. As part of their plan, the organisers revealed a giveaway of one of the tokens if their project was sold within a tight 15-day timeline - a ambitious to-do that Nairobi could vividly recall. Furthering their ambitions, there was also a roadmap of five stages in place - creating a podcast, a members-only comedy show and ETH or token-based games, rewards and a new branch in the US. Alas, their hopes were dashed as, after just 20 podcast episodes, the show was abandoned and the raffle's ETHs were exchanged for CMCs tokens. In the end, from an initial 7,660 monsters only 2,320 holders benefitted, making for an unsuccessful sell-out.
When David, the Chief Executive Officer of CMC, suddenly left the Discord chat and his brother José David shortly after, holders of the project started doubting its trustworthiness. Near the beginning of March of 2022, individuals in the community started to accuse the firm and its creators of "soft rug-pulling." According to blockchain surveillance, more than 411.9 ETH had been taken out of the venture, bringing total assessment to approximately $1.18 million utilizing the ETH normal exchange rate from the period ranging from November of 2021 to June of 2022. It became clear that Cardoso, Chief Executive Officer and founder of CMC, had signed a separation agreement with the former Cofounders on the 9th of November 2022. Despite this deal, not shared with the public, Tokens were utilized in a few promotional attempts and giveaways. This resulted in CMC not being able to sell out, causing more anger amongst its holders. Moreover, it was estimated that the business could have earned in between $2 and $3 million. That being said, the CMC smart contract, as of now, has a balance of 0 ETH and the project's significant wallet has merely $300 in ETH.
Victor Noguera, a Venezuelan social media user, discovered after exploring into the blockchain that the funds were divided into three designer wallets. Two of them splitted a quarter between them and the remaining allocate was in the assumed control of Cardoso and the Roa brothers. After being questioned regarding the information, the primary organiser, Cardoso asserted to the reporters of Cointelegraph that the income earned from the minting of NFTs got allocated into the wallets which could be conveniently handled by both him and further by the stated Roa twins. Opinions and reactions of the people around started to shift in terms of the community wallet, as it is a fundamental component which enables the Ethereum holders to maintain a direct constant supervision over their investment and helps initiate new development of tokens. Although the cost of the token, ETH, was pegged at 0.015, the entrepreneur was adamant that the money solely belonged to the team and there was no truce between the finances and the project. Shock and disbelief of the public reflected in the peak period, of December 2022 and when a moderator, Alfonzo González, indicated the need of increased transparency and more control on the workings of the token, the outburst was immense.
Though the conversation surrounding Non-Fungible Tokens (NFTs) still presents gray areas, a lack of assurances and regulations from the Web3 industry is to blame. This perplexity prompted questions from Maria Londoño, co-founder of Disrupt3rs, as to why there was a prolonged disconnect between project initiators and the community. From this arose Comedy Monsters Club, who relied upon the utility of the asset to make good on their phrase - for both parties, this ended in failure and losses, albeit the project is still functioning and providing seminars and functions today. Cardoso Santos, leader of the initiative, admits mistakes were made and urges the movement forward despite the damage to its reputation. Governments, according to Londoño, should take it upon themselves to enforce solid, binding rules to assure fraud is avoided, and the result is not deception by negligence or moral averseness.
