The Final Chapter and Reboot of NFT

1. The Collapse of NFTs

The last revival of NFTs culminated in the token issuance of Pudgy Penguins, while Doodles' recent token launch on Solana only garnered slight attention. Yuga Labs continues to downsize, this time even affecting its core IP Cryptopunks. In the final wave of the NFT resurgence, even those Bitcoin NFT projects have nearly gone to zero. The once-crazy narratives have quietly come to an end, no longer capturing people's interest.

The 10k PFP project once had a beautiful vision: a moderately sized community helping a bottom-up IP project reach the world, which is distinctly different from the traditional IP model that requires a large initial investment in content support. Traditional IP projects, such as Disney's Marvel universe, Star Wars, and various animated characters, typically require years of accumulation and substantial financial investment to embed the IP into the hearts of people, ultimately becoming a profitable project.

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 artwork on Opensea, without the need for galleries, toy companies, film companies, or any professional teams. An IP and a new artist are thus born.

Three to four years ago, we witnessed some bottom-up IPs becoming popular in the top entertainment circles of Europe, America, Japan, and South Korea. An ordinary artist can achieve a turnaround through NFTs. For someone like me, a member of Generation Z who grew up watching Japanese anime, being able to participate in IP investment and incubation that was once hard to access through cryptocurrency is a very exciting thing.

However, after the "Crazy Matryoshka" of BAYC and the disastrous sub-series Elemental of Azuki were released, the positioning of NFTs gradually became clearer. They are not a form of equity or investment, but rather an expensive luxury item with attached membership benefits. The project teams hope that we will continually purchase sub-series to support their ongoing investments in building the core value of their IP roadmap. This creates a contradiction: the project teams know that content creation is costly, but without creating content IP, they will perish. Releasing a sub-series every few months continuously drains the funds of OG series holders, tormenting every member of the community. The wait for returns from the content may take many years, or they may never arrive. The rift begins to widen, and those beautiful fantasies start to shatter as the floor price falls, leaving only various disputes.

2. The Ace of the IP World - MCN-PoP MART

If we consider NFTs as luxury trendy toys for Generation Z, the reasons for their rise and fall become clearer. In the fast-food era, the lack of content is not necessarily a bad thing, as the appearance alone can quickly attract buyers. For example, Azuki's art style aligns well with Asian aesthetics, and on the basis of consensus, this grassroots-produced NFT series was able to become the third-largest blue chip after BAYC. In the real world, well-known trendy toys like Bearbrick, B.Duck, and Molly also lack content support, yet they once became popular due to their unique appearances.

However, trends are always short-lived, and without content as a core value, these IPs may become outdated at any time. Limited by the culture of the cryptocurrency circle and the extremely low success rate of NFTs, project teams often continuously create derivatives around a single IP. But the reality is that before the core has even taken shape, this wave has already passed.

Of course, there are also some types in PFP projects that are well-supported by content, such as Japanese-style NFTs. In the past, I have seen at least four or five projects with well-known Japanese anime IPs, hoping to achieve great success in the NFT market. However, they seem to have not considered that the fan base of the IP is almost completely incompatible with this circle. Additionally, there are already so many peripheral products related to Japanese anime that it becomes difficult to choose; why would fans spend hundreds of times the price to buy a small picture? Most importantly, this small picture is just an image, and there is zero imaginative space for future empowerment. Even if you purchase a high-end NFT, you can only gain access to the "SIDE-G" entrance of the Gundam metaverse. The profits that Bandai makes from models, games, and animations have nothing to do with you, and the community will not become part of IP incubation, and may even be seen as an outsider within 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, with only the pragmatic spark of the little penguin still striving hard. So, does the small image really have another way out? I believe PoP MART may offer a different answer.

This small cubicle store originated from the Beijing Euro-American Shopping Center and turned around by relying on 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 the time: to create proprietary IP that could not be taken away by others. In 2016, PoP MART collaborated with Hong Kong designer Wang Xinming to launch its first self-owned toy series – Molly. This little girl with a pouting image instantly became a nationwide sensation, driven by the uncertainty of the blind box gameplay and the stimulation of dopamine. PoP MART began its first phase of rapid growth, and by 2019, the annual sales of the single IP Molly had reached 456 million yuan, becoming the core source of income for PoP MART at that time.

This model of combining Japanese capsule toys with high-end trendy toys for collaborations became quite common during the NFT boom in the following years. Basic elements designed by artists are handed over to the project team to be combined into a series of images for sale and operation. NFTs in the launch phase are generally also in the form of blind boxes, 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 and various blue chips have generally failed. So why is PoP MART迎来 a second spring?

I once attributed the reasons to difficulties in landing and high purchase thresholds. The former currently poses no issues, while the latter is not entirely true; there were small projects with Free Mint periods for NFTs, such as Goblintown and MIMIC SHHANS, which are successful cases from that time, with creators earning a fortune just from transaction commissions. Many NFTs from the inscription era have become even more decentralized on this basis, but this does not prevent the decline of NFTs. It is very easy to form or join an IP community, but the difficult part is in sustaining it.

Therefore, I think we might have made a mistake in our model. After the first段 rocket-like rise, Molly did not make PoP MART a legend, and the stock price of the entire company dropped from 2021 to 2024, just like NFT. But PoP MART has made a comeback, relying on a whole wall of IPs. Now PoP MART has 12 of its own IPs including Molly, DIMOO, BOBO&COCO, YUKI, and Hirono, 25 exclusive IPs including THE MONSTERS (including Labubu), PUCKY, SATYR RORY, and more than 50 non-exclusive co-branded IPs with Harry Potter, Disney, League of Legends, and others.

People's preferences are always fickle, and the lifespan of an IP is limited, but what if I have hundreds of choices? Today, Labubu has become a sensation in Europe, America, and Southeast Asia, with the value retention of its surrounding dolls comparable to plastic Moutai. The ideals of Yuga Labs were ultimately realized in Web2, but this was not a coincidence.

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

3. Pudgy Penguins

Last year, I also participated in the event held by the Little Penguin in Hong Kong. This NFT project has always been very enthusiastic towards the community.

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 results in a JPG image. The challenge of NFTs lies in the realization of IP, which is hundreds of times more difficult than creating a 10K PFP. Some platforms want to build a metaverse, and some projects want to create animations. These ideas are cool, but these projects, which have starting costs in the hundreds of millions, will only ask community members to cough up 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 leap. Few major projects are willing to lower themselves, and in the end, the more impatient they are, the worse they fall. The original team of Pudgy Penguins was also such a restless grassroots team; after their reputation was damaged, they sold the little penguins at a low price.

At this point, the little penguin finally met its true owner, Luca Netz, a worker with many years of experience in physical marketing, who brought the little penguin back to where it belonged. Luca Netz is really building a brand; he runs 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’s nothing particularly special about it; it’s just doing what it’s supposed to do. It has been proven that bottom-up IP can exist in Web3; it’s just that there are too many projects that can't lower their stance.

Therefore, I really dislike the term "falsification", as if certain things should never exist. Electric vehicles were once quite clumsy, and Siri on my phone was also quite clumsy. But that doesn't prevent the entire city from being filled with green license plate cars today, and there's even less to say about AI.

Many so-called discredited tracks, Web3 will still attempt in the future, but it lacks a suitable project party.

Four, Path

The path to success is simple, yet also very difficult. The next step for PFP will inevitably require breaking through some inherent logical frameworks of cryptocurrency, and becoming the next Web3 Disney will require significant accumulation. Regarding NFTs, whether scarcity has always acted as a counterbalance in the process of becoming mainstream has been discussed in my previous articles. If defined as trendy consumer goods, then the limitation of 10K may be too large; if defined as a unique asset and fundraising method in Web3, then IP ultimately needs to be transformed into tangible consumer goods to fulfill commitments to the community, rather than a bunch of strange sub-series.

The unique culture of the cryptocurrency community and the attributes of NFTs make it somewhat helpless to stick to a single IP. How can we further elaborate on these PFPs? How can we expand a project into an IP factory? This may require us to embrace some new concepts and introduce more technologies and gameplay.

5. Is Token Issuance the Final Stop?

What is the significance of issuing tokens for NFTs? I still don't understand it. This situation seems more like an exploitation of the lower tier by the upper tier, and it also dilutes the original value of the NFTs. I can only interpret it as the project looking for a convenient way to exit liquidity.

From APE to DOOD, they all seem to be variants of air coins without exception. Their empowerment often involves staking to earn some on-chain transaction dividends, purchasing items in virtual worlds, or governance rights. Ideally, it is a perfect cycle among holders → stakers → developers. However, in reality, it resembles more of an air, caught in a vicious cycle of NFT depreciation, mining yield depreciation, and token depreciation.

For original NFT holders, although the tokens have taken away some dividends and rights, most of them will also receive a large airdrop at the time of token generation, so no one complains. However, in the long run, as mentioned in the fourth paragraph, this is a kind of dilution, and the distribution like that of certain projects' animations is even a blatant form of plunder.

Short-term hype is important, but the long-term existence of the project is more important; 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, and NFTs should thrive well in this era.