Comedy club NFT debacle teaches lesson in transparency

In Venezuela, humor plays an important role, either as a form of protest or a way to make sense of reality. 

In November 2021, humor and nonfungible tokens (NFTs) were combined with the launch of the Comedy Monsters Club (CMC) project. The project was led by Roberto Cardoso, better known by his former stage name “Bobby Comedia,” and co-founded with brothers José David Roa and David Roa.

The project was advertised as the only comedy club to use NFT collectibles as membership. However, the hype would quickly turn to confusion for the project’s investors.

An enticing narrative

Comedy Monsters reached the NFT-curious Latin American audience through the well-known Venezuelan comedians.

Cardoso and his co-founders appeared in publications like Forbes Mexico and on popular shows and comedy podcasts such as Nos Reiremos de Esto and Escuela de Nada.

Listenting to an episode of Escuela de Nada titled “How To Make Money With NFTs,” pseudonymous NFT collector Nairobi first came to learn about the presumptive comedy club. Later, they would decide to join the CMC community and purchase an NFT themselves.

“It’s in that conversation where you can really identify the project’s selling narrative,” Nairobi explained.

During the episode, the hosts interview Comedy Monsters co-founder José David, a self-appointed “NFT expert.” In the conversation, José David uses his own example of being an early investor in Bored Ape Yacht Club, reportedly earning over $300,000 from selling one of his NFTs.

His get-rich-quick story is followed by the mantra “do your own research,” often used to imply that any previous statements made by so-called experts shouldn’t be taken as financial advice.

“For someone who is new to the NFT ecosystem, this can lead to false expectations,” Nairobi said.

CMC officially launched in November 2021 with an offering of 10,100 NFTs. The starting price for each was 0.1 Ether (ETH), worth between $400 and $500 at the time of the sale. The monsters wouldn’t be revealed to their owners until all the NFTs were sold.

Cardoso told Cointelegraph that the comedy club’s purpose was “to deliver as many experiential, material and economic benefits” to its members as possible.

However, beyond the novelty of the project’s proposal, it was never clear how CMC would maintain or increase the value of its NFTs. In a small section on its website consisting of only three sentences, the creators explain the tokenomics behind the project.

“The rarer it [the NFT] is, the better benefits it will possibly have and the greater value it will surely have,” it reads.

Community “failure”

The period after the initial launch of an NFT collection can be critical to determining the project’s success. The value of the tokens will depend on the public’s continued interest in investing, putting projects under pressure to implement successful marketing strategies.

The CMC founders were so concerned about the sale of their Monster NFTs that former members reported that the project’s creators pressured the community to help come up with sales strategies to sell them.

“We were practically demanded to come up with marketing strategies. There was also the alleged raffle of a Mutant Ape NFT within the community, under the condition that Comedy Monsters Club sold out in just 15 days,” Nairobi recalled.

The pressure on the community was stacked on top of another key point: An inadequate execution of the club’s roadmap.

The CMC roadmap had five stages: the production of a podcast, a comedy festival exclusive to holders, games and raffle prizes in ETH, a foundation and a United States branch.

Despite posts on social media showcasing 2022 as a successful year for CMC, its community shared a very different experience. The project launched a podcast, but stopped after less than 20 episodes. CMC founders organized events, but they weren’t exclusive, and there were limited tickets for NFT holders. Even the raffles ended up switching from ETH prizes to giving out CMC NFTs instead.

The project never reached its goal of a total sell-out. According to its smart contract, there are 2,320 holders, owning 7,660 monsters in total.

Cardoso said that a significant but unspecified number of NFTs were used in publicity stunts and giveaways, and he blamed the 2022 crypto market crash for the project’s failure to sell out.

A rough approximation of the comedy club’s earnings shows that it could have made as much as $2 million to $3 million, based on estimates of the value of the sold tokens at the time of CMC’s launch.

Today, the CMC smart contract shows a balance of 0 ETH, and there’s only a little over $300 in ETH left in the project’s main wallet.

A “soft rug-pull”

The community never knew for sure how the funds were spent on the project’s roadmap or how much was taken by Cardozo and the Roa brothers, making the case for a possible soft rug-pull.