Author: YBB Capital Researcher Zeke
I. The Demise of Non-Fungible Tokens
The last gasp of Non-Fungible Tokens ended with Pudgy Penguins' token issuance, and Doodles' recent token launch on Solana only created a few ripples. Yuga Labs' subtraction continues, this time even involving their most soul-defining IP, Cryptopunks. The BitCoin Non-Fungible Tokens from the last wave of revival have nearly gone to zero, and these once-crazy narratives have indeed fallen into obscurity, with no one paying attention anymore.
The vision of 10k PFP was once beautiful, with a perfectly-sized community helping a bottom-up IP project go global, which was completely different from traditional IP projects that previously invested heavily in content support. For example, Marvel Universe, Star Wars, and various animation characters under Disney often require years of cultivation and countless funds to make these IPs deeply rooted in people's hearts and ultimately become a gold mine.
Non-Fungible Tokens are entirely different, with an extremely low entry barrier and an incredibly fast speed of IP creation and asset monetization. Creators only need to pay some gas to list their artwork on Opensea for sale, without galleries, toy companies, film companies, or any professional team - a new IP and artist are born this way.
We witnessed some bottom-up IPs becoming popular in top entertainment circles of Europe, America, Japan, and South Korea three to four years ago. A grassroots artist could achieve a breakthrough through Non-Fungible Tokens. For me, as a Z-generation who grew up watching anime, being able to participate in IP investment and incubation through crypto, which was previously inaccessible to ordinary people, was quite a dream.
However, after BAYC's "crazy nested dolls" and Azuki's disastrous sub-series Elemental release, the blurry status of Non-Fungible Tokens gradually became clear. It was not like a stock or investment, but more like an expensive luxury item with membership benefits. The project side still hoped we would continuously purchase sub-series to support their ongoing investment in the IP value core's Roadmap. The seeds of contradiction were planted here - project teams knew content creation was expensive, but the IP would die without it. Sub-series released every few months continuously drained OG series holders, tormenting every community member. Waiting for content feedback might take many years, or perhaps never come. The cracks began to widen, and those beautiful fantasies shattered with the floor price's decline, leaving only various arguments.
II. The Ace MCN of the IP World - PoP MART
If Non-Fungible Tokens are seen as Z-generation's luxury trendy toys, their origin and downfall become clearer. In the fast-food era, lack of content is not necessarily bad, as appearance alone can quickly attract buyers. For example, Azuki's art style fits Asian aesthetics, and under consensus, this grassroots Non-Fungible Token series could become the third blue-chip after BAYC. In the real world, famous trendy toys like Bearbrick, B.Duck, and Molly also lack content support but became popular due to unique appearances.
However, trends are fleeting, and IPs without a content core can become outdated at any time. Limited by crypto culture and Non-Fungible Tokens' extremely low success rate, project teams often continuously develop derivatives around an IP. But the reality is that before the core can take shape, the trend has already passed.
Of course, PFP projects also have a type with sufficient content support - Japanese Non-Fungible Tokens. In the past, I've seen four or five projects with famous anime IPs hoping to make a big splash in the Non-Fungible Token market. However, they seemingly didn't consider that the IP's fan base is almost completely incompatible with this circle. Secondly, Japanese anime merchandise is already too abundant to choose from - why would fans spend hundreds of times more for a small image? Most importantly, this small image is just an image with zero future empowerment potential. Even if you buy a Gundam Non-Fungible Token, you'd only get access to the metaverse "SIDE-G". Profits from models, games, and animations would naturally have nothing to do with you, and the community would not be part of the IP incubation. In the entire Gundam fan group, they would even be considered outliers. In this aspect, GameFi's pain points are quite similar.
At this point, PFP projects became a pseudo-proposition, with only Pudgy Penguins' pragmatic spark still making efforts. So, do these small images have another way out? I believe PoP MART might have provided a different answer.
(Translation continues in the same manner for the rest of the text)The success of Pudgy Penguins lies in being practical, practical, and practical again. Non-Fungible Tokens themselves don't create significant technical differences; no matter how clever the Mint process is designed, it's ultimately just a JPG. The challenge with NFTs is IP implementation, which is hundreds of times more difficult than creating a 10K PFP. Yuga Labs wants to do Metaverse, Azuki wants to create anime. OK, these are cool, but these projects starting with costs in the hundreds of millions are just looking for community members to pay.
This extremely compressed world is too impetuous, with everyone wanting to succeed quickly. Holders want to make big money, project teams want to reach the top in one step. Few blue-chip projects are willing to humble themselves, and the more impatient they are, the harder they fall. The original Pudgy Penguins team was once such an impetuous grassroots team, and after being damaged in public opinion, they sold the little penguins at a low price.
At this point, the little penguins met their true owner Luca Netz, a worker with years of physical marketing experience who brought the penguins back to their proper height. Luca Netz is truly building a brand, operating a company for Non-Fungible Token holders. From marketing to plush toys to future games, every step of the little penguins is solid, with the company able to profit, and holders able to profit too. There's nothing special about this; it's just doing what it should do. Therefore, it's proven that bottom-up IP can exist in Web3, it's just that too many project teams are unwilling to lower their stance.
So, I really dislike the word "falsification", as if some things should never have existed. Electric cars were once stupid, and Siri on my phone was stupid too. But this doesn't prevent green-plated cars from now filling entire cities, and don't even get me started on AI.
Many so-called falsified tracks will still be attempted by Web3 in the future, it just lacks a matching project team.
IV. Path
The path to success is simple, and the path to success is also difficult. The next stop for PFP will ultimately need to break out of some inherent crypto logical frameworks, and becoming the next Web3 Disney requires extensive accumulation. I've previously discussed whether NFT scarcity has been counterproductive in the process of reaching the masses. If defined as a trendy consumer good, perhaps the 10K limitation is too large; if defined as a Web3-specific asset and fundraising method, the IP ultimately needs to be converted into physical consumer goods to fulfill the community's promise, rather than a bunch of weird sub-series.
Based on the unique culture of crypto and the attributes of Non-Fungible Tokens, clinging to an IP until old age is also unavoidable. How to do more with these PFPs? How to expand a project into an IP factory? This may require us to accept some new concepts and introduce more technologies and gameplay.
V. Is Token Issuance the Final Stop?
I still don't understand the significance of Non-Fungible Token token issuance. This situation seems more like exploitation of lower-level members by upper-level members, and a dilution of OG Non-Fungible Token value. I can only understand it as the project seeking a convenient liquidity exit method.
From APE to DOOD, they all seem like variants of air tokens. Their empowerment often involves staking to obtain some on-chain transaction dividends, purchasing items in Metaverse, governance rights, and so on. In an ideal scenario, it's a perfect cycle of holder → staker → developer. But from a realistic perspective, it's more like air, caught in a death spiral of Non-Fungible Token price decline, play-to-earn income decline, and token price decline.
For OG Non-Fungible Token holders, while the Token divides some dividends and rights, they mostly receive a large airdrop at TGE, so no one complains. But in the long term, as mentioned in the fourth paragraph, this is a dilution, and distributions like Azuki's Anime are even more like outright theft.
Short-term heat is important, but the project's longevity is more important. Don't let token issuance become the final stop.
Conclusion
In this fast-paced, dopamine era, we've witnessed the rise of many Web2 emerging IPs. Non-Fungible Tokens should have grown well in this era, with many irreplaceable characteristics. Four years ago, I viewed it as a cyber Maotai, but reality is more like a cyber tulip. Few are willing to manage the ruins, but I believe that beneath the ruins, the next Labubu is certainly hidden.
