From esteemed BAYC holders to dumb buyers: My fantastical drift as a sucker in the NFT market

Reprint: Daisy, Mars Finance

1. The Collapse of NFTs

The last call of NFT ended with the token launch of Pudgy Penguins, while the recent token issuance of Doodles on Solana only made a few ripples. Yuga Labs' subtraction continues, this time even affecting the most iconic IP, Cryptopunks. Those BitCoin NFTs, which were part of the last wave of NFT revival, are also nearing zero, and the narratives that once drove people crazy have indeed faded into obscurity, no longer attracting any attention.

10 k PFP The vision once was beautiful, a community of just the right size helping a bottom-up IP project go global, which is completely different from traditional IP projects that first invest heavily in content support. For example, Disney's Marvel Universe, Star Wars, and various animated characters often require years of accumulation along with countless funds to make these IPs resonate deeply with people and eventually become a gold mine.

On the other hand, NFTs are completely different; their entry threshold is very low, and the speed at which an IP is created and assetized is quite fast. Creators only need to pay a small amount of Gas to list their artwork for sale on Opensea, without galleries, toy companies, film companies, or any professional teams needed. An IP and a new artist are thus born.

We witnessed a few years ago that some grassroots IPs became popular in the top entertainment circles of Europe, America, Japan, and South Korea. An amateur artist can also achieve a turnaround through NFTs. For me, as a member of Generation Z who grew up watching Japanese anime, being able to participate in IP investment and incubation that ordinary people could not access through Crypto is quite a dreamy thing.

However, after the "crazy nesting dolls" of BAYC and the disastrous sub-series Elemental of Azuki were released, the status of NFTs gradually became clearer. They are not like equity or investments, but rather more like expensive luxury goods with membership benefits. The project team hopes that we will continue to purchase sub-series to support their ongoing investment in the IP value core Roadmap. The seeds of contradiction were planted here; the project team knows that creating content is expensive, but without content, the IP will die. The sub-series released every few months continuously drains the OG series holders, tormenting every member of the community, and the feedback from content may take many years to arrive, or perhaps that feedback will never come. The cracks began to widen, and those beautiful fantasies started to shatter as the floor price dropped, leaving only various disputes.

2. The Ace of IP - MCN-PoP MART

If we consider NFTs as luxury trendy toys for Generation Z, their causes of success and failure become clearer. In the fast-food era, lacking content isn't necessarily a bad thing; after all, an appealing appearance can quickly attract buyers. For example, Azuki's art style aligns well with Asian aesthetics, and under this consensus, this grassroots-produced NFT series can follow closely behind BAYC to become the third largest blue chip. In the real world, well-known trendy toys like Bearbrick, B.Duck, and Molly also lack content support, yet they have gained immense popularity thanks to their unique designs.

However, trends are always fleeting. Without content as the core value, these IPs can become outdated at any moment. Limited by the culture of the cryptocurrency space and the extremely low success rate of NFTs, project teams often revolve around a single IP, continuously creating derivatives. But the reality is that before a core has even taken shape, this trend has already passed.

Of course, there is also a type of PFP project that has sufficient content support, which is Japanese-style NFT. In the past, I have seen at least four or five projects holding well-known Japanese anime IPs hoping to make a big splash in the NFT market, but they seem to have not considered that the fan base of the IP is almost completely incompatible with this circle. The second point is that the merchandise of Japanese anime has already become so abundant that it's hard to choose, so why would fans spend hundreds of times the price to buy a small image? Of course, the most important is the third point: this small image can only be an image, and the imagination space for future empowerment is zero. Even if you buy a high-quality NFT, you can only gain access rights to the Gundam metaverse "SIDE-G". Wanda's profits from models, games, and animations have nothing to do with you, and the community will not be part of the IP incubation, which is even considered an outsider among the entire Gundam fan base. In this regard, the pain points of GameFi are actually very similar.

At this point, the PFP project has become a false proposition, and only the pragmatic little penguin is still striving. So does the small image really have another way out? I believe PoP MART may provide a different answer.

This small grid store originated from the Beijing Oumeihui Shopping Center and turned around thanks to the agency of Sonny Angel. This single series contributed nearly 30% of PoP MART's sales at that time. The envious copyright holder reclaimed the exclusive agency rights a year later, but this move instead led to the birth of an IP empire.

Wang Ning (founder of PoP MART) had a very simple idea at that time: to create proprietary IP that cannot be taken away by others. In 2016, PoP MART collaborated with Hong Kong designer Wang Xinming to launch its first self-developed trendy toy series - Molly. This little girl with a pouting image quickly became popular across the country, driven by the excitement of uncertainty from the blind box play and the stimulation of dopamine. PoP MART began its first phase of rocket-like growth, and by 2019, the annual sales of the single IP Molly had reached 456 million yuan, becoming the core source of revenue for PoP MART at that time.

This approach, which combines Japanese capsule toys with high-end trendy toys in collaboration, became quite common in the following years of the NFT boom. Basic elements designed by artists are then combined by the project team into a series of images for sale and operation. NFTs are generally released in blind box form during the initial phase, where the project team releases various rare combinations of images to enhance players' purchasing desire.

The two only differ in the form of release, but tens of thousands of NFT projects have generally failed along with various blue chips. Why is PoP MART experiencing a resurgence today?

I used to attribute the reasons to the difficulties in landing and the high purchasing threshold. The former seems to have no issues at the moment, while the latter is actually not the case. NFTs also had their Free Mint phase, and Goblintown and MIMIC SHHANS were the standout projects of that time. Creators made a fortune just from trading commissions. Many NFTs from the inscription era have an even more thorough degree of decentralization based on this, but that does not stop the decline of NFTs. Forming or joining an IP community is very simple, but the challenge lies in sustaining it.

So, I think we might be making a mistake in our model. After the initial rocket-like rise, Molly did not elevate PoP MART to the status of a deity; the entire company's stock price fell from 2021 to 2024, just like NFTs. However, PoP MART has turned around, relying on a complete wall of IPs. Now, PoP MART has 12 proprietary IPs including Molly, DIMOO, BOBO&COCO, YUKI, and Hirono, 25 exclusive IPs including THE MONSTERS (including Labubu), PUCKY, and SATYR RORY, and over 50 non-exclusive co-branded IPs with franchises like Harry Potter, Disney, and League of Legends.

Human preferences are always fickle, and the lifespan of an IP is limited, but what if I have hundreds of choices at hand? Nowadays, Labubu is booming in Europe, America, and Southeast Asia, and the value retention of its surrounding dolls is comparable to plastic Moutai. The ideal state of Yuga Labs is eventually realized in Web2, and all of this is not a coincidence.

We need to rethink what an IP business is, what the roadmap for NFTs is, and why PoP MART can achieve such heights without content support.

Three, Pudgy Penguins

I participated in the Little Penguin Hong Kong event last year, and this NFT project has always been so enthusiastic towards the community.

The success of Pudgy Penguins lies in practicality, practicality, and practicality. The NFT itself doesn't have any significant technical distinctions; no matter how cleverly designed the minting process is, it's ultimately just a JPG. The difficulty with NFTs is in the realization of the IP, which is hundreds of times more challenging than creating 10K PFPs. Yuga Labs wants to create a Metaverse, and Azuki wants to create anime. OK, that's all very cool, but these projects that start at over a hundred million in costs will only look to the community's family members to fork out money.

This extremely compressed world is too restless, and everyone wants to achieve success quickly. Holders want to make big money, and project teams want to reach the top in one step. Few blue-chip projects are willing to bow down, and in the end, the more impatient they are, the harder they fall. The original team of Pudgy Penguins was also once such an impatient grassroots team. After facing a bad reputation, they sold the little penguins at a low price.

At this moment, the little penguin met its true owner, Luca Netz, a worker with years of experience in physical marketing, who brought the little penguin back to the height it should have. Luca Netz is really building a brand; he operates a company for NFT holders. From marketing to plush toys to future games, every step of the little penguin is solid. The company can profit, and the holders can profit as well. There is nothing particularly special about it; it is just doing what it is supposed to do. Therefore, it has been proven that bottom-up IP can exist in Web3, but there are too many project parties that cannot lower their stance.

So, I really hate the word "falsification", as if certain things were never meant to exist. Electric cars used to be silly, and Siri on my phone was also silly. But that doesn't prevent green-license cars from filling the entire city today, and there's even less to say about AI.

Many so-called discredited tracks will still be tried by Web3 in the future; it just lacks a suitable project team.

Four, Path

The path to success is simple, yet also very difficult. The next stop for PFP will ultimately have to break away from some inherent logical frameworks of Crypto; to become the next Web3 Disney requires a lot of accumulation. Whether the scarcity of NFTs has played a counterproductive role in the process of reaching the masses is something I have discussed in my previous articles. If we define it as a trendy consumer product, then the limitation of 10K may be too great. If we define it as a unique asset and fundraising method of Web3, then IP must ultimately be converted into physical consumer products to fulfill commitments to the community, rather than a bunch of odd sub-series.

Based on the unique culture of the cryptocurrency world and the attributes of NFTs themselves, it is indeed unfortunate to cling to an IP for life. How can we further innovate with these PFPs? How can we expand a project into an IP factory? This may require us to embrace some new ideas and incorporate more technology and gameplay.

V. Is issuing tokens the final stop?

What is the significance of issuing NFTs? I still don't understand it. This situation feels more like an exploitation of the lower ranks by those in higher positions, and it also dilutes the value of OG NFTs. I can only interpret it as this project looking for a convenient way to exit with liquidity.

From APE to DOOD, without exception, they all seem like variants of air coins. Their empowerment often involves staking to earn some on-chain trading dividends, purchasing items in the Metaverse, or governance rights, among others. Ideally, it is a perfect loop among holders → stakers → developers. However, in reality, it resembles a kind of air, caught in a dead loop of NFT price drops, reduced gold mining returns, and token depreciation.

For OG NFT holders, although the tokens have taken away some dividends and rights, most of them will receive a large airdrop during the TGE, so no one is complaining. However, in the long term, as mentioned in the fourth paragraph, this is a form of dilution, and the distribution similar to Azuki's Anime is even more like a blatant theft.

Short-term hype is important, but the longevity of the project is more important. Don't let token issuance be the final stop.

Conclusion

In this fast-paced, dopamine-driven era, we have witnessed the rise of many emerging Web2 IPs, and NFTs should thrive in this age due to their many irreplaceable characteristics. Four years ago, I regarded them as cyber Maotai, but the reality is they are cyber tulips. Few are willing to manage the ruins, but I believe that beneath the ruins lies the next Labubu.