What is Loot?

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robertstevens

Robert has reported for a variety of international publications including the Associated Press, The Guardian, Vice, and Decrypt. Current areas of interest include the political economy of technology, cryptocurrencies, and privacy. Robert has a Bachelor of Science from UCL, and a Master's degree from the University of Oxford's Internet Institute.

Loot is one of the fastest-growing non-fungible token projects, and it’s deceptively simple: It’s based around lines of text that provide the inspiration for a videogame that hasn’t been created yet. Two weeks after launching in summer 2021, Loot became the most popular non-fungible token (or NFT) project on the Ethereum blockchain.

Each character sheet contains eight different items that a hero from a fantasy medieval RPG, like Dungeons and Dragons or World of Warcraft, might wear. Each card contains randomized gear. All the information is stored on the Ethereum blockchain—a kind of digital ledger that can’t be erased or changed.

And that’s it. The spartan website says that “Stats, images, and other functionality are intentionally omitted for others to interpret. Feel free to use Loot in any way you want.”

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Loot was created by Dom Hofmann, a 34-year-old American and serial entrepreneur. Hofman is perhaps best known for founding Vine, a short video app that became immensely popular in the early 2010s.

When Hofmann released the project on August 27, he gave 7,777 bags of Loot away for free to members of the public, and only required people to pay gas to mint them. Gas refers to the ever-changing amount of Ethereum paid to the computers that validate the transactions on the Ethereum blockchain. It cost about $80 to mint a bag of Loot at the time.

Loot quickly became one of the most valuable and popular projects on Ethereum. When Hofmann launched Loot, the bags sold out within a couple of hours. As of September 8, 2021, the 8,000 bags sell for an average of 10 ETH ($34,229) and a maximum of 250 ETH ($855,747).

But why on earth would someone pay so much money for character sheets from a game that hasn’t been created yet?

Hofmann’s thesis was that Loot could be a game created from the ground up. All he did was sow the seed for a videogame—by providing people with the foundations, character sheets, developers could sally forth and create whatever videogame they wanted.

NFTs, after all, are simply tokens on the Ethereum blockchain. One of the main principles of the blockchain is that the user owns their tokens outright, and can use them on another Ethereum-based application without having to sacrifice ownership over them. A developer could code a Loot quest to recognize the Divine Robe from a Loot character sheet completely without having to first ask Hofmann for permission.

This is what is known as the “metaverse”—a series of independent yet interconnected online projects. They are “meta” because each project refers to others of its kind. Dungeons and Dragons is an early example of the metaverse: Even though there was an official developer, people used the rules of the games to construct their own imaginary worlds.

Still confused? If this seems a little abstract, don’t worry: It is. Loot is still very conceptual, but the promise is that a community can create value for a project instead of relying on a small team of developers to serve them.

Contrast the development of Loot with something like Minecraft. To create Minecraft, developers sit in offices and coded the whole thing from scratch, then sold each copy of the game for about $15.

The community might request that the developers include another feature, like, say, adding more advanced farming mechanics, for free. To keep selling copies of the game, Minecraft’s developers might say, “OK, sure, let’s build it.”

The community could create farming modifications and release them online, but the base game—the one created by the official Minecraft developers—might not recognize a player’s crops. The Minecraft developers, ultimately, call the shots.

On Loot, anyone can create an expansion pack and turn it into something that’s recognized by the community as an important addition to the game; the community determines the future of the game, not the developer.

It’s also illustrative to contrast Loot with something like the Bored Ape Yacht Club —the very valuable NFT collection of 10,000 miserable-looking apes. The project’s anonymous creators, Yuga Labs, have carefully created a community around the apes, and occasionally release more apes as expansion packs.

Although anyone can release an expansion pack, unofficial projects don’t have the legitimacy of those released by Yuga Labs, and are thus unlikely to be as valuable. With Loot, the community decides what’s a legitimate expansion based on its merit: There isn’t a centralized organization producing high-quality content.

A lot of people think that the above is mere intellectual handwaving and that the real reason that bags of Loot are so valuable is that they were released at a point when the NFT market was in full swing when lots of things sold for a lot of money, making people who were lucky enough to get in early incredibly rich.

At the same time as Loot, EtherRocks, which are NFT rocks pegged to a clipart drawing, sold for millions of dollars and are described by its creator as serving “NO PURPOSE beyond being able to be brought [sic] and sold.”

Back in 2017 and 2018, blockchain projects like EOS raised billions of dollars without a proof of concept—people were so caught up in the hype about the new technology that they were willing to invest lots of money in the prospect of a new future.

Loot so far

Now that Hofmann’s released his Loot character sheets in the wild, sparking hope of a community-created videogame, what have people been doing with it?

Well, a lot. The project is still in its infancy, but already people have added to Loot. Some have entirely reconceived the project.

Perhaps the most successful addition is Adventure Gold, or AGLD, an in-game currency, created by Ethereum-developer Will Papper. Papper said that AGLD could be used for “anything the community decides.”

“Right now, people are using it to vote on storylines and other governance features,” he said, “It can be used for governance, future in-game credits, or future mints that build on top of @lootproject and adopt $AGLD.” By governance, Papper refers to votes that would let you lock up your AGLD to determine the future of the project. It’s unclear whether it will become the “official” governance token of the project.

“The only practical limitation is if the community decides to vote for a new season, in which case the unclaimed $AGLD from a previous season will not be accessible,” said Papper. 10,000 AGLD could be claimed by anyone with Loot for free, and the token has a market cap of $225 million, as of this writing. You can already buy AGLD on a handful of major cryptocurrency exchanges, including Uniswap, SushiSwap, Huobi Global, FTX, and OKEx.

Popular offshoots include Abstract Loot, which turns Loot character sheets into beautiful, trippy pieces of art, Ability Scores, which generates stats for the players. Others produce maps, names, horses, jobs, races, religions, classes, armies, and quests.

Rival projects have also spawned. There’s Bloot, or Based Loot, which replaces Loot’s medieval fantasy lore with dirty X-rated items, a cyberpunk version of Loot, and The N Project, which replaces all the words from Loot’s character sheets with numbers zero through fourteen. Each has its own vibrant communities with an individual take on Loot.

How to buy Loot

You can no longer mint Loot for free. However, you can buy Loot that’s resold on secondary markets, like OpenSea. To do so, you’ll have to buy it with Ethereum, which you can get from a cryptocurrency exchange and send to an in-browser wallet that connects to OpenSea, like MetaMask. You can bid on Loot or buy it outright—it depends on what the seller wants.

Some items are rarer than others, and the community has valued two classes of items higher than others: katanas and divine robes. Interestingly, although these items are certainly uncommon, they aren’t the rarest items in Loot: 4% of all characters wield katanas. It’s more that these items have captured the imagination of users, and about the exclusive clubs that katanas and divine robes let you enter on social media sites like Discord. Offshoot projects like Bloot also tend to prize certain items over others.

You can also invest in offshoot projects, although many are unaudited. Some let you mint tokens if you pay gas fees. Some only let you mint tokens if you hold Loot cards. All NFTs eventually get resold on secondary markets like OpenSea.

Note that OpenSea only lists NFTs: ERC-20 tokens like AGLD, or BGLD, the ERC-20 from Bloot, sell on cryptocurrency exchanges. Because they’re so new, lots of these fungible ERC-20 tokens sell exclusively on decentralized exchanges, like Uniswap, where anyone can list anything. The same instructions apply: to buy these tokens, link up your MetaMask wallet with Ethereum-based cryptocurrencies and buy them on the websites.

Last Updated September 20, 2021

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