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1st December 2021 > > Matrix NFTs part 1.

Updated: May 8, 2022


Buying a Matrix NFT was a painful and drawn out process.

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At one point yesterday BTC threatened the $60k barrier but only briefly as risk assets sold off after the Fed’s admission that inflation is more than a “transitory” problem.

That comment puts both the Bank of England and the ECB into a difficult position regardless of their debt maturity profile. Rate increases are going to destroy governments’ finances, resulting in ever steeper tax rises (the wrong answer), and less public spending (no comment). Ouch!

Keep an eye out for any signs of yield curve inversion, a reliable predictor of a forthcoming recession.

Curious Cryptos’ Commentary – The pain of Matrix NFTs

It won’t have escaped your notice that there is soon to be a new Matrix film, though perplexingly without the presence of Laurence Fishburne as Morpheus.

The franchise owner, Warner Bros., Inc., have teamed up with Nifty’s to issue 100,000 Matrix related NFTs (non-fungible tokens if you haven’t been paying attention).

Several weeks ago I joined their Discord channel to get myself hopefully into a position to participate solely for the benefit of the CCC community.

The process in theory was relatively simple.

You needed an account on Nifty’s of which I was already in possession.

The price of each NFT was set at $50 payable in the Palm network version of DAI, commonly known as pDAI, not to be confused with PDAI (Prime DAI). After purchase, the NFTs would appear in your Nifty’s account, ready for display or possibly making a quick buck or three.

So, let’s break that down in more detail for those people – who comprise the majority – who have not yet taken their crypto adventure beyond a centralised exchange (Coinbase and Binance being the obvious two examples).

The easiest method for interacting with decentralised platforms (DeFi) and online NFT marketplaces (e.g. OpenSea) is to use MetaMask.

The most secure way of interacting with DeFi and NFTs is to use a Ledger Nano, preferably the X but the S works just as well and is half the price.

Recently MetaMask announced the integration of an interface with Ledger Nano, which is tremendously exciting news. Unfortunately for me, with several DeFi operations and NFTs going on in my current online only MetaMask, that process of transition will be take some time.

If I delay too long, and my MetaMask wallet gets hacked (which can easily happen) I will be very annoyed with myself.

Right, armed with a MetaMask wallet (online or Ledger Nano stylie) the wallet needs to be configured to use the Palm network. This is because MetaMask is initially set up only for Ethereum.

All other networks (e.g. Smart Chain, rSK, Harmony, Avalanche and so on) must be set up manually.

Honestly, it isn’t that difficult, and once you have done it once or twice, it will be a breeze going forward.

Just for reference, this link allows quick configuration of MetaMask to Palm, as well as the process of buying pDAI which we will get to shortly:

Let’s track back a little. DAI is the stablecoin for the MakerDao (MKR) protocol, pegged successfully at $1. MKR is on the Ethereum blockchain, which means that at times transactions can be very slow, and very expensive.

The Palm network is a layer 2 solution aimed specifically at the NFT space. Its objective is to make the buying and selling of NFTS fast and very cheap.

The native token is PALM which is used for gas fees. PALM is not yet available for sale but is freely given to anyone interacting with the PALM network – after every interaction your balance of PALM is restored to 0.5.

From what I can tell, the Palm network is still very centralised. I assume the developers have plans to rectify this, but I cannot find any reference to those plans. Still, if I wanted my Matrix NFTs I would have to let that go for now.

The next step is to get DAI on the Palm network not Ethereum. There are two ways. The first is to bridge DAI from Ethereum to Palm, a process that involves smart contracts and potentially high fees (I saw some complaints yesterday that bridging was costing north of $200).

The alternative is to buy using your credit/debit card from Wyre (see link above) that will credit your MetaMask with pDAI for approximately 5% fee. This is the key clue that Palm is far from being decentralised.

I note also that Wyre are not performing any KYC (Know Your Customer). That is going to be a problem for them going forward.

I was all set up with my pDAI a couple of weeks ago, ready for yesterday’s launch date.

At 5.30pm, you had the option to join a “waiting room” on Nifty’s site. At 6pm you were given a random place in the queue to buy up to 25 Matrix NFTs.

My place was 44,543. With only 100,000 to be minted, you don’t need a calculator to see that my chances of buying even one were negligible.

Almost as soon as sales started, the process ran into problems. It seems that those building the IT infrastructure completely underestimated the resources needed to manage what was always going to be a very popular NFT launch.

After about an hour, 400 lucky people had bought, presumably at the limit of 25 each. Due to the volume of complaints on Discord, the limit was reduced to 5 per applicant. Even so, that still didn’t bode well for my queue position.

Not long after, the queue was paused again, due to the number of people whose transactions kept getting error messages.

Bit of a crap shoot in my opinion, so I gave up around 9pm for an early night.

On getting up this morning, about 30,000 people had been through, some successfully buying whilst some presumably had not. On chain analytics showed that 48,000 had been sold at the time.

Currently 52,000 have been claimed:

Suddenly I got excited again – perhaps I was in with a chance still.

An hour after getting up, another 5,000 people had gone through. My position is the queue was 9,452, and I was briefly given a time to wait of 58 minutes. Things started to look good!

That was over two hours ago, and the queue hasn’t moved since. Devs have now announced – with zero explanation – that no more transactions will be processed “overnight”.

On reading Discord, it seems that there are many delays in the minting process. It is very possible they have all already been sold, but the backlog means that the sales are not yet showing on the blockchain.

No time has been given for the reopening, but I am outta here at 5pm to go see Watford batter Chelsea. I am resigned to being Matrix NFT free.

All in all, a painful process which now leaves me with pDAI which will be super expensive to convert back to DAI or any other crypto I can easily use.

You see the pain and turmoil I go through for the benefit of the CCC community?

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