The Saudis NFT collection of 5,555 Arab-themed Punks launched on July 9, 2022. Following a pre-mint for those on an allow list, the remainder of the NFTs sold out in moments. That’s quick for ‘another’ Crypto Punk derivative in the midst of a bear market. This, of course, is not just another Punk copycat.

Two weeks later, and instead of fading into oblivion like many other Punk derivatives, The Saudis are showing the hallmarks of having set the standard for the next wave of NFT launches. It may be because they’re amongst the first to use a ‘soulbound’ token. 

And that’s in addition to having the on-chain artwork, giving this project a genuine first in the space – first on-chain artwork accompanied by a soul-bound token. With a price floor at around 0.4 ETH, the project is worth understanding.

The Saudis #907 is the most expensive sale at 10 ETH.

Soulbound tokens were written about earlier this year by Ethereum co-founder Vitalik Buterin. He argued that there was sense in having an NFT that could not be transferred to another wallet on the blockchain, leaving the NFT effectively ‘soulbound’ to the wallet’s owner.

The Saudis have implemented a version of this idea. Saudi NFT holders were airdropped a token called The Dune featuring a picture of a dune that changes from day to night in real-time. Arabian-style music accompanies the changing image, adding a touch of immersion to the experience.

The soulbound NFT The Dune from The Saudis evolves with time.

While the token’s aesthetic demonstrates thoughtful design, its underlying purpose is a new approach to solving a key problem for PFP projects – protecting a floor price. The problem centers around the relationship between community loyalty, revenue generation, and costs.

A loyal community generates ongoing revenue. The problem is how to achieve loyalty. Yuga Labs did it well with the Bored Ape Yacht Club (BAYC) by regularly airdropping holders something of value to set up an expectation.

This expectation was that it would probably be more profitable over the long-term to keep the NFT rather than sell it for a smaller short-term profit. Consequently, the original BAYC floor price increased in value, as did many of the airdrops. A virtuous circle formed with new people becoming desperate to join the community to ride the gravy train.

The BAYC floor price rose steadily on the expectation of future rewards.

However, Yuga’s approach requires time, money, and a big team of experts, a costly luxury few can afford. What’s more, in the bear market, NFTs have moved towards low-risk free-to-mint revenue models, making many effectively worthless from the start.

In free-to-mint collections, many traders mint as many NFTs as possible and then dump them quickly for small profits, killing the project’s floor price, a key indicator of future value. As we have discussed previously, many projects simply do not make it beyond the first few days.

Projects that last long enough to provide airdrops often see them being sold to book profits. When eligibility for future airdrops depends on holding an original airdrop, those that sold for profit miss out. With the expectation of future value gone, they then sell the original NFTs to book final profits from the project, and the floor price begins to cascade. 

Some teams have adopted an alternative approach, requiring communities to lock NFTs in staking contracts. This has worked well for some, such as the DeGods team, but The Saudis claim that the rules and procedures involved are often too complex.

The DeGods approach of restricting supply has effectively supported the floor price.

The Saudis approach the problem of building ongoing revenue at a low cost by having their soulbound token, The Dune, be the key to future airdrops. The Dune, though, is ‘Saudi-bound’ to The Saudi NFT rather than the holder’s wallet.

This creates a subtle but effective difference. Selling a The Saudi NFT transfers The Dune Saudi-bound token too, meaning any existing or future benefits dependent on either NFT will also get transferred to the new owner. This adds sales value as it should qualify the new owner for future airdrops.

Alternatively, if airdrops are not ‘attached’ to either of the NFTs, they should be sellable, allowing holders to book some profits. Either way, the system builds value into the collection, and The Saudi floor price should be less likely to collapse.

Both The Saudi and The Dune tokens are also upgradable, giving the team a lot of flexibility and scope for creativity when adding value for holders. Depending on your risk tolerance, the current floor price might be a good entry. 

The Saudis’ floor price may hold well thanks to The Dune.

Aside from the Saudi-bound token, any expectation of future value still depends on future airdrops actually being worthwhile. In a Twitter spaces event, The Saudis project member Prince Sonnie stated multiple events do lay ahead as part of the project’s various narrative stages, and outlined a significant reward for holders at the end of the narrative.

There is no clear detail about this significant reward, so it could be anything. The next narrative step will commence this Friday, July 22nd. Once the value of the project’s airdrops is proven and The Dune’s benefits are understood, these narrative events may create more buying pressure than has been usual recently.

A community manager for The Saudis outlining the benefits of their soulbound NFT.

In relation to the upcoming event, there have been hints of a sandstorm being involved in some way. Prince Sonnie responded carefully to the idea that it could reveal, hide or alter traits. 

Whatever lays ahead for The Saudis, they are the go-to project for the moment, spawning a wave of imitators, another hallmark of success. None of the imitators are using soulbound style tokens so far, but two may be worth considering as much riskier but cheaper alternatives.

The Jews, a competitor, acknowledge The Saudi’s success.

The Turks NFT project was very quick to launch after The Saudis and is putting high effort into developing partnerships with other ‘cultural’ NFTs, their aim being to build value by getting allowlist spots for partner projects. Their floor price has already fallen to under 0.02 ETH, though. They have a community of around 37,000 followers on Twitter but need to make a comeback, which will likely be an uphill battle.

The Jews NFT was hotly tipped as a strong competitor, having built an audience of approximately 70,000on Twitter. However, they were erroneously delisted from OpenSea, which impacted the collection’s floor price.

They are back now, and their floor price is currently low. Arguably, also being in the region of 0.02 ETH, it has collapsed. If they introduce a soul-bound token, a reversal in the project’s fortunes might follow, it seems possible as they have a large following and strong cultural identity to meme with, another key aspect of The Saudis’ success.

In summary, The Saudis is one of the most successful projects around at the moment. The wave of imitators shows there is demand for cultural NFTs, and unlike their competition, The Saudis’ floor price may become protected by Saudi-bound tokens. With the promise of many rewards lying ahead, and numerous tokens remaining available under 0.4 ETH, it is worth consideration at least.

At the very least, while soulbound tokens are no guarantee of quality or value, from now on, projects will begin to explore different ways of building value with them, and those without them will have to work out other ways to assure investors of ongoing value.

Until next time

Disclosure: At the time of writing, the author held several NFTs, ETH, and other cryptocurrencies. Read our trading policy to see how SIMETRI protects its members against insider trading.