What is Azuki NFT?

By Lyle Daly – Updated Mar 20, 2024 at 11:12 AM EST

Key Points

Azuki NFTs offer exclusive club memberships and benefits through digital avatars.
Founder's history of abandoning projects led to a 50% drop in Azuki's value.
Investing in Azuki is risky due to high volatility and speculative nature.
These 10 Stocks Could Mint the Next Wave of Millionaires ›

Azuki is a collection of non-fungible tokens (NFTs) designed by Chiru Labs, a start-up launched by artists and technologists in Los Angeles. Each one is a digital avatar that gives the holder membership access to an online club called The Garden.

The art style of Azuki made it an immediate success. Within four months of launching, it was already ranking among the top NFT collections in terms of sales volume, along with mainstays such as Bored Ape Yacht Club and CryptoPunks. However, Azuki also has raised some red flags, including the founder's track record of abandoned projects. Here's everything you need to know about this collection.

Loading paragraph...

The letters NFT over a digital background — Source: Getty Images

Loading paragraph...

Is Azuki a good investment?

You should steer clear of investing in Azuki NFTs because their value is far too volatile and speculative. Like other NFT projects, they lack real-world utility, and the only purpose they serve is as digital collectibles.

The argument for buying an Azuki NFT is that the collection could grow in popularity and that it will get you exclusive benefits. For example, the Azuki team may do another airdrop that gets you one or more free NFTs from a new collection.

Those are both possibilities, but they're far from a sure thing. Azuki could get more popular -- or people could move on to the next collection with cool designs. You might score free NFTs from an airdrop, but just because the Azuki team has launched one successful collection doesn't mean subsequent ones will be a hit.

You're rolling the dice as a buyer, and luck isn't a good investing strategy. To get an idea of how risky Azuki NFTs are, take a look at the sales history for a few of them and see how much people are spending to buy and sell NFTs from this collection. You'll see some sellers who came out ahead, and others who sold at a big loss.

How to buy Azuki NFTs

If you like the style of the Azuki NFT collection and you want to buy one, you can find it on several major NFT marketplaces. Options include:

OpenSea
Rarible
LooksRare

To buy NFTs from the collection, you'll need a blockchain wallet and Ethereum. Since Ethereum is one of the biggest cryptocurrencies, it's available for purchase on most top crypto exchanges. After you buy it, transfer it to your blockchain wallet and connect that wallet to your NFT marketplace of choice.

While the Azuki brand quickly became popular with NFT collectors, that's also the only group who should consider buying in. These hyped-up collections don't make for sound long-term investments. It's impossible to predict which specific NFTs will be winners, and the allegations of insider trading among major collections are a concerning issue that likely won't be resolved any time soon.

Loading paragraph...

About the Author

Lyle Daly is a contributing Motley Fool stock market analyst covering information technology and cryptocurrency. Lyle has been a contributor at the financial services company since 2018. His work has been featured on USA Today, Yahoo Finance, MSN, Fox Business, and Nasdaq. Before joining The Motley Fool, he wrote for financial brands including Intuit.

TMFLyleDaly

@LyleDaly

Lyle Daly has positions in Ethereum. The Motley Fool has positions in and recommends Ethereum. The Motley Fool has a disclosure policy.