The Final Chapter and Reboot of NFT: From Disillusionment to Exploration of New Models

1. The Burst of the NFT Bubble

The last remnants of the NFT craze dissipated with the token issuance of Pudgy Penguins. The token issuance of Doodles on Solana also failed to stir much excitement. Yuga Labs continues to streamline, and even its most iconic IP - Cryptopunks - has not been spared. The Bitcoin NFT projects that were once in the spotlight during the last wave of NFT revitalization are also nearly at zero. These once-crazy narratives have now become a thing of the past, with no one paying attention anymore.

The original vision of the 10k PFP project was beautiful - a moderately sized community capable of supporting a grassroots IP project to go global. This is in stark contrast to the traditional IP projects that invest huge sums upfront to create content. Traditional IPs like the Marvel Universe and Star Wars often require years of accumulation and massive financial investment to deeply resonate with people and eventually become a gold mine.

NFT is completely different; its entry threshold is very low, and the speed of IP creation and assetization is extremely fast. Creators only need to pay a small Gas fee to sell their works on the platform, without the need for galleries, toy companies, or professional teams, thus giving birth to an IP and a new artist.

Three or four years ago, we witnessed some grassroots IPs gaining popularity in the top entertainment circles of Europe, America, Japan, and South Korea. Ordinary artists can also achieve a comeback through NFTs. For a Generation Z like me, who grew up watching Japanese anime, being able to participate in IP investment and incubation that was previously hard to access through cryptocurrency is a dream come true.

However, with the "mad nesting dolls" of BAYC and the disastrous sub-series Elemental from Azuki being released, the positioning of NFTs is gradually becoming clear. It is not a form of equity or investment, but rather resembles an expensive luxury item with membership benefits. The project teams also hope that we will continually purchase sub-series to support their ongoing investment in building the core value of the IP. This creates a contradiction - the project teams know that content creation is costly, but without creating content IP, it will vanish. Releasing a sub-series every few months continuously drains the enthusiasm of OG series holders, tormenting the entire community. The wait for returns from content may take years, or we may never see it at all. The rift begins to widen, and beautiful illusions are shattered as floor prices drop, leaving behind only various disputes.

2. The IP Star-Making Factory in Reality

If we regard NFTs as luxury trendy toys for Generation Z, the reasons for their rise and fall become clearer. In an era dominated by fast food culture, a lack of content may not necessarily be a bad thing, as appearance alone can quickly attract buyers. For example, the artistic style of Azuki aligns well with Asian aesthetics, and under this consensus, this grassroots NFT series managed to follow BAYC as the third-largest blue chip. In the real world, Bearbrick(, the ) building bear, B.Duck, and Molly, among other well-known trendy toys, also lack content support but have become popular due to their unique appearances.

However, trends are always short-lived. Without content as the core value, these IPs can become outdated at any time. Limited by the culture of the cryptocurrency circle and the very low success rate of NFTs, project teams often continuously create derivatives around an IP. But the reality is that the core has yet to take shape, and this wave has already passed.

Of course, there are also some PFP projects supported by substantial content, such as Japanese-style NFTs. In the past, I have encountered at least four or five projects with well-known Japanese anime IPs that hope to make a name for themselves in the NFT market. However, they seem to ignore the fact that the IP fanbase is almost completely incompatible with the crypto community. Furthermore, there are already countless Japanese anime peripherals; why would fans spend hundreds of times the price to purchase a small image? The most critical point is that these small images are just images, and the future potential for empowerment is zero. Even if one purchases a high-tier NFT, they can only gain entry rights to the Gundam metaverse "SIDE-G." The profits Bandai makes from models, games, and animations are naturally unrelated to the holders, and the community will not become part of the IP incubation process, making it seem out of place within the entire Gundam fanbase. The gaming finance ( GameFi ) sector also faces similar pain points.

At this point, PFP projects have become a false proposition, with only the pragmatic little penguin continuously striving. So, do these small images have another way out? I believe a certain company in the real world may have provided an alternative answer.

This company, which originated in Beijing, turned its fortunes around by代理Sonny Angel. This single series contributed nearly 30% of the company's sales. The envious copyright holder reclaimed the exclusive agency rights a year later, but this move instead facilitated the birth of an IP empire.

The founder's idea at that time was very simple - to create their own IP that others could not take away. In 2016, the company collaborated with a Hong Kong designer to launch the first self-produced trendy toy series, Molly. This little girl with a pouty face instantly became popular across the country. Through the uncertainty stimulation of blind box gameplay and dopamine drive, the company began its first round of rapid growth. By 2019, the annual sales of the single IP Molly had reached 456 million yuan, becoming the core source of income for the company at that time.

This model of combining Japanese gacha with high-end trendy toys in collaboration has also been very common in the subsequent years of the NFT boom. Basic elements designed by artists are then compiled into a series of images by the project team for sales and operation. In the initial launch phase, NFTs usually adopt a blind box format, where the project team releases various rare combinations of images to stimulate players' purchasing desire.

The two only differ in terms of their release format, but tens of thousands of NFT projects and various blue chips have generally failed. So why is this company experiencing a resurgence now?

I once attributed the reasons to the difficulties in landing and the high purchase threshold. From the current perspective, the former indeed has issues, while the latter is not necessarily true. There was also a time when NFT could be minted for free, and Goblintown and MIMIC SHHANS were the golden dogs of that period. Creators earned a lot just from transaction fees. Many NFTs from the inscription era are even more decentralized on this basis, but this cannot prevent the decline of NFTs. It is easy to form or join an IP community, but the challenge lies in how to sustain it.

Therefore, I think the problem may lie in the model. After the first round of rapid growth, Molly did not let the company soar. The stock price of the entire company, like NFT, has been declining from 2021 to 2024. However, the company eventually turned a profit, relying on a solid wall of IPs. Today, the company has 12 proprietary IPs including Molly, DIMOO, BOBO&COCO, YUKI, and Hirono, 25 exclusive IPs including THE MONSTERS( with Labubu), PUCKY, and SATYR RORY, as well as more than 50 non-exclusive co-branded IPs such as Harry Potter, Disney, and League of Legends.

People's preferences are always fickle, and the life of an IP is limited. But what if you have hundreds of choices? Nowadays, Labubu has become a sensation in Europe, America, and Southeast Asia, and the value retention capability of its surrounding dolls can be described as "plastic Moutai." The ideals of Yuga Labs have ultimately been realized in Web2, and this is no coincidence.

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

3. The Pragmatic Little Penguin

The success of Pudgy Penguins lies in being pragmatic, pragmatic, and pragmatic. The NFT itself is difficult to create a technological gap, no matter how cleverly the minting process is designed, it ultimately ends up being a JPG image. The difficulty of NFTs lies in the implementation of IP, which is hundreds of times more challenging than creating 10K PFPs. Some projects want to build a metaverse, while others want to create anime. These ideas are cool, but these projects with costs starting in the hundreds of millions will ultimately just reach out to community members for money.

In this highly compressed world, people are overly impatient, and everyone wants quick success. Holders want to make big money, and project teams want to reach the top in one step. Very few blue-chip projects are willing to be practical, and the more impatient they are, the worse they fall. The original team of Pudgy Penguins was once such an impatient grassroots team, and after their reputation was damaged, they sold the little penguins at a low price.

At this time, the little penguin finally met its true owner, Luca Netz. This worker, who has many years of experience in physical marketing, has brought the little penguin back to the height it deserves. Luca Netz is indeed building a brand, operating a company for NFT holders. From marketing to plush toys and future games, every step of the little penguin is solid; the company can be profitable, and the holders can also profit. There is nothing particularly special about it; it is just doing what needs to be done. It has been proven that bottom-up IP is viable in Web3; it’s just that there are too many project parties that cannot let go of their pride.

So, I really dislike the term "falsification," as if certain things should never have existed. Electric vehicles were once quite foolish, and Siri on my phone was also quite foolish. But that doesn't prevent entire cities from now being filled with green license plate cars, and AI is needless to say.

Many so-called discredited tracks will still be attempted in Web3 in the future, but there is a lack of a suitable project party.

4. Future Path

The path to success is both simple and difficult. The next phase of development for PFP will ultimately require breaking through some of the inherent logical frameworks of cryptocurrency. To become the next Web3 version of Disney, a significant accumulation is necessary. Whether the scarcity of NFTs has been counterproductive in the process of becoming mainstream is a question I discussed in previous articles. If defined as trendy consumer products, then a scale of 10K may be too limiting; if defined as a type of asset and fundraising method unique to Web3, then IP ultimately needs to be transformed into tangible consumer products to fulfill commitments to the community, rather than a bunch of strange sub-series.

Based on the unique culture of the cryptocurrency circle and the attributes of NFTs themselves, a long-term focus on a single IP is also a helpless move. How can we further develop based on these PFPs? How can we expand a single project into an IP factory? This may require us to embrace some new concepts and introduce more technology and gameplay.

V. The Significance of Token Issuance

The significance of issuing tokens for NFTs remains unclear to this day. This practice seems more like an exploitation of the lower tiers by those in power, and it also dilutes the original value of the NFT. I can only understand it as the project seeking a convenient way to exit liquidity.

From APE to DOOD, without exception, they all resemble variants of air coins. Their empowerment often includes staking for on-chain transaction dividends, purchasing rights for items in the metaverse, governance rights, and so on. Ideally, it is a perfect cycle among holders → stakers → developers. But the reality is that it resembles more of an air, trapped in a vicious cycle of NFT depreciation, declining mining rewards, and token devaluation.

For original NFT holders, although the tokens have taken away some dividends and rights, most of them will also receive a large airdrop during the token generation event (TGE), so no one complains. However, in the long run, this is indeed a dilution as mentioned earlier. The allocation method of certain projects is even a blatant plunder.

Short-term popularity is certainly important, but the long-term sustainability of the project is more crucial. Don't let the token issuance be the final stop.

Conclusion

In this fast-paced, dopamine-driven era, we have witnessed the rise of many emerging Web2 IPs. NFTs should have thrived in this age, as they possess many irreplaceable characteristics. Four years ago, I regarded them as "cyber Moutai", but reality has proven that they are more like "cyber tulips". Few are willing to sort through the ruins, but I believe that beneath the ruins lies the next blockbuster IP.