Original Title: (The Final Chapter and Restart of NFTs)
Original Author: Zeke, YBB Capital Researcher
I. The Collapse of NFTs
The last cry of NFTs stopped at the token issuance of Pudgy Penguins, and the recent token release of Doodles only made a small splash on Solana. Yuga Labs' subtraction continues; this time even the most iconic IP, Cryptopunks. Those BitCoin NFTs in the last wave of NFT revival are nearly worthless; these once-crazy narratives have indeed fallen into desolation, no longer attracting attention.
The vision of 10k PFP was once beautiful, with a community of just the right size helping a bottom-up IP project reach the world, which is completely different from traditional IP projects that first spend money to support content. For example, Disney's Marvel Universe, Star Wars, and various animated characters often require years of accumulation and countless funds to make these IPs deeply rooted in people's hearts and ultimately become a gold mine.
NFTs, on the other hand, are completely different. Their entry barriers are extremely low, and the speed at which an IP is created and assetized is quite rapid. Creators only need to pay some gas fees to list their artwork for sale on Opensea. There are no galleries, toy companies, film companies, or any professional teams required; an IP and a new artist are thus born. We witnessed several grassroots IPs becoming popular in the top entertainment circles in Europe, America, Japan, and South Korea three to four years ago. A grassroots artist could achieve a reversal through NFTs. For me, as a member of Generation Z who grew up watching Japanese animation, being able to participate in IP investment and incubation through crypto, which was once inaccessible to ordinary people, is quite a dreamlike thing.
However, after the 'crazy nesting dolls' of BAYC and the disastrous release of Azuki's sub-series Elemental, the ambiguous status of NFTs gradually became clear. They do not resemble a form of equity or investment; rather, they appear more like expensive luxury goods with membership benefits. Yet the project teams still hope we will keep buying sub-series to support their continuous investment in building the core value of IP. The seeds of contradiction were sown here; project teams know that creating content is expensive, but without content, IP will die. Releasing sub-series every few months continuously drains OG series holders, tormenting every member of the community, waiting for feedback from the content that may take years, or perhaps that feedback will never come. The cracks began to widen, and those beautiful fantasies started to shatter with the drop in floor prices, leaving only various conflicts.
II. The Ace MCN of the IP World - PoP MART
If we view NFTs as luxury trendy toys of Generation Z, their causes and failures become clearer. In an era of fast food, having no content is not necessarily a bad thing, as external appearances 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 become the third-largest blue chip after BAYC. In the real world, Bearbrick, B.Duck, Molly, and other well-known trendy toys similarly lacked content support but still became immensely popular due to their unique appearances.
However, trends are always fleeting; without content as a core value, these IPs may become outdated at any time. Restricted by the culture of the cryptocurrency world and the extremely low success rate of NFTs, project teams often derive continuously around an IP. But the reality is that if the core hasn't even taken shape, this trend will pass.
Of course, there exists a type of PFP project that is well-supported by substantial content, the 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 fanbase of the IP is almost completely incompatible with this circle. Secondly, the peripherals of Japanese anime have long been too abundant to choose from; why would fans spend hundreds of times the price to buy a small image? Of course, the most important point is the third one, that this small image can only be an image, with zero imaginative space for future empowerment. Even if you purchase a high-end NFT, you can only gain access rights to the Gundam Metaverse 'SIDE-G'. Wanda's profits from models, games, and animations naturally have nothing to do with you, and the community will not be a part of IP incubation, even considered an outlier in the entire Gundam fanbase. In this aspect, the pain points of GameFi are very similar.
Thus, the PFP project has become a pseudo-proposition, and only the pragmatic spark of the little penguins is still striving. So, does the little image have another way out? I believe PoP MART may have provided a different answer.
This small shop that originated in Beijing's Europe and America Shopping Center managed to turn things around by representing Sonny Angel. This single series contributed nearly 30% of PoP MART's sales at that time. The envious copyright owner reclaimed exclusive agency rights a year later, but this action instead led to the birth of an IP empire.
At this time, Wang Ning (founder of PoP MART) had a simple idea: create proprietary IPs that cannot be taken away by others. In 2016, PoP MART collaborated with Hong Kong designer Wang Xinming to launch its first independent trendy toy series - Molly. This pouting little girl instantly became popular nationwide, stimulated by the uncertainty of the blind box model and driven by dopamine. PoP MART began its first rocket-like ascent, and by 2019, the annual sales of the single IP Molly reached 456 million yuan, becoming PoP MART's core source of revenue at that time.
This approach, combining Japanese capsule toys with high-end trendy toys in collaborations, has also become quite common in the subsequent years of the NFT boom. Basic elements are designed by artists and then handed over to project teams to be combined into a series of images for sale and operation. NFTs in the initial release phase are generally in blind box form; project teams will release various rare combinations of images to enhance players' purchasing desires. The two are only different in the form of release, but tens of thousands of NFT projects and various blue chips have generally failed. So why is PoP MART now experiencing a second spring?
I once attributed the reasons to difficulties in realization and high purchasing thresholds. The former does not seem to be an issue at present, while the latter is actually not the case; there was also a period of Free Mint for NFTs, and Goblintown and MIMIC SHHANS were golden dogs of that time. Creators earned plenty just relying on transaction commissions, and many NFTs from the inscription era are even more decentralized on this basis, yet this did not prevent the decline of NFTs. Forming or joining an IP community is very simple; what is difficult is the continuation.
Therefore, I think we might have a model error. After the initial rocket-like rise, Molly did not make PoP MART a legendary success; the company's stock price fell from 2021 to 2024 just like NFTs. However, PoP MART has revived, relying on a whole wall of IPs. Today, PoP MART has 12 proprietary IPs including Molly, DIMOO, BOBO & COCO, YUKI, and Hirono, along with 25 exclusive IPs including THE MONSTERS (including Labubu), PUCKY, and SATYR RORY, and over 50 non-exclusive collaborative IPs with Harry Potter, Disney, League of Legends, etc.
People's preferences are always fickle, and the life of an IP is limited. But what if I have hundreds of choices? Now Labubu is wildly popular in Europe, America, and Southeast Asia, with its surrounding toys holding their value comparable to plastic Maotai. Yuga Labs' ultimate ideal was realized in Web2, and this was not accidental. 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.
III. Pudgy Penguins
Last year, I also attended a Pudgy Penguins event in Hong Kong, where this NFT project has always been enthusiastic towards its community. The success of Pudgy Penguins lies in being pragmatic, pragmatic, and still pragmatic. NFTs themselves do not create much of a technological difference; no matter how cleverly designed the minting process is, it ultimately results in a JPG. The difficulty of NFTs lies in the realization of IP, which is hundreds of times more challenging than producing 10K PFPs. Yuga Labs wants to build a Metaverse, Azuki wants to make anime. Okay, that all sounds cool, but these projects, which start with costs in the hundreds of millions, will only ask community members to shell out money.
This extremely compressed world is too impetuous, and everyone wants to achieve success quickly. Holders want to make big money, while project teams want to rise to the top in one go. Very few blue-chip projects are willing to bow down; in the end, the more anxious they are, the worse they fall. The original team of Pudgy Penguins was also such an impatient grassroots team; after their reputation suffered, they sold the little penguins at a low price.
At this point, the little penguins finally met their true owner, Luca Netz, a worker with years of experience in physical marketing, who brought the little penguins back to their rightful height. Luca Netz is genuinely building a brand; he operates a company for NFT holders. From marketing to plush toys to future games, every step of the little penguins is solid. The company can profit, and holders can also profit. None of this is particularly special; it is simply doing what it should do. Therefore, it has been proven that bottom-up IP can exist in Web3, but there are too many project teams that cannot let go of their pride.
Therefore, I really dislike the term 'falsification,' as if certain things should never exist. Electric vehicles were once very silly, and the Siri on my phone was also quite foolish. But that does not prevent green-plate cars from filling the entire city today, nor is there much to say about AI. Many so-called falsified paths, Web3 will still attempt in the future; it just lacks a suitable project team.
IV. The Path
The path to success is simple, yet difficult. The next stop for PFP will ultimately need to jump out of some inherent logical frameworks of crypto, and to become the next Web3 Disney requires significant accumulation. Regarding whether the scarcity of NFTs has been counterproductive in the process of reaching the masses, I have discussed this in my past articles. If it is defined as trendy consumer goods, then the limitations of 10K might be too great. If it is defined as a unique asset and fundraising method in Web3, then IP must ultimately be converted into physical consumer goods to fulfill its commitments to the community, rather than a bunch of bizarre sub-series.
Given the unique culture of the cryptocurrency world and the properties of NFTs themselves, it is unfortunate to hold onto an IP until old age. How can we create more value from these PFPs? How can we expand a project into an IP factory? Perhaps we need to embrace some new concepts and introduce more technologies and gameplay.
Is issuing tokens the final destination?
What is the significance of NFT token issuance? I still do not understand. This situation resembles an exploitation of the lower tiers by the upper tiers and a dilution of the value of OG NFTs; I can only understand it as the project seeking a convenient liquidity exit. From APE to DOOD, without exception, they resemble variants of air coins. Their empowerment often involves staking to gain some on-chain transaction dividends, purchasing items in the Metaverse, governance rights, and so on. Ideally, it is a perfect cycle among holders → stakers → developers. But in reality, it feels more like air, caught in a death cycle of NFT price declines, mining income declines, and token price declines.
For OG NFT holders, although tokens dilute some dividends and rights, they will mostly receive a large number of airdrops at the TGE, so no one complains. However, in the long run, as mentioned in the fourth paragraph, this is a form of dilution, and the distribution like Azuki's Anime is more like outright theft. Short-term hype is important, but long-term survival of the project is even more crucial; do not let token issuance become the final stop.
Conclusion
In this fast-paced, dopamine-fueled era, we have witnessed the rise of many emerging IPs in Web2. NFTs should have thrived in this age, as they possess many irreplaceable characteristics. Four years ago, I regarded them as cyber Maotai, but the reality turned out to be cyber tulips. Few are willing to manage the ruins, but I believe that underneath the ruins lies the next Labubu.
This article comes from a submission and does not represent the views of BlockBeats.
