The darkest hour of NFT has not yet come, but it will not die either

0x13(Sleepy)

23-07-03 14:31

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First of all, I would like to gather some alternatives to Twitter. The trick of limiting tweets by Jack Dorsey is making us Web3ers who spend every day on Twitter feel uncomfortable. If anyone has a better platform to use, let's migrate together!

The recent events do not need to be reviewed again, and I have privately discussed the views of a certain team with many friends, so I will not "kick them when they are down" here. The market situation does not need me to summarize for everyone. The purpose of writing this article is actually to talk about my expectations and understanding of NFT from the perspective of an ordinary practitioner. If possible, I also hope that everyone will not lose hope for the industry.

How to categorize NFTs?

On the internet, people generally classify PFP and equity-based NFTs into two categories. However, as a practitioner in the industry, I would like everyone to think carefully about whether or not we should make this distinction. Because of this statement, there was a time when I didn't want to refer to small ghosts as PFP NFTs.

In the end, a picture is just a form of expression, and it does not necessarily mean that it can only be a representation of a cryptocurrency logo. It also does not mean that it has to be a boring and uniform card if it wants to have functionality.

The basis for empowerment is the behavior of "holding NFT", and whether to empower and what to empower depends entirely on the team behind it. Little Ghost is an avatar, but it can also bring benefits to holders such as whitelist, Alpha information, music festival tickets, and discounts on physical goods. I have also seen many projects that claim to be "rights NFTs" but only bring white lists of some projects to holders. (P.S. I will always praise Little Ghost, after all, I am the founder haha, but I try not to criticize others.)

First of all, here is my point of view: PFP is a financial product that can consolidate cultural consensus. It may become a consumer product in the future, but in the current Web3 environment, PFP cannot be treated according to the logic of consumer products.

Once I also avoided discussing the financial attributes of NFT, but everything has two sides. If used properly, financial attributes may not be a bad thing. Bored apes changed people's perception from "will be killed by Meebits" to "the number one IP in Web3" through a wave of hype, and Azuki survived the first crisis thanks to the soaring price. To give a very practical example, it was difficult for Little Ghost to discuss brand collaborations when the floor price was 0.1+, but when it rose to around 0.3-0.5, things became much simpler.

Since PFP is a financial product that can condense cultural consensus, the "accumulation" work before the project is launched becomes crucial. To be honest, Little Ghost did not consider this issue at all when it was launched, and did not find a group of whales or market makers in advance, which to some extent led to the fact that the price after the launch did not skyrocket like other projects in the same period. However, we also regard this as a good thing. Not using financial leverage during the unstable foundation has become a key factor in protecting us during the bear market.

However, there is a significant difference between Web3 IP and traditional Web2 IP. Most Web2 IPs capture a large number of fans through content output and then monetize through derivatives, but Web3 IP currently lacks the ability to output content. If you say, "But isn't Hasbro selling Transformers toys before making Transformers animations?" Well, at least Hasbro has the ability to make toys. However, this does not prove that there is a problem with the track, but only proves that the team's ability is not good enough.

I understand why they are not optimistic about the development path of NFT IP. We have gone through the entire process of product design, production, and logistics ourselves, and it is a very tiring thing. But we don't have to completely deny the entire track, after all, Pudgy Penguins has given us a good demonstration. In addition to Pudgy Penguins, I have had some exchanges with the Karafuru team recently. They also have decent income in Web2 in Southeast Asia, enough to cover the team's operating costs.

It seems that NFT IP-ization is not as difficult as many people expected, but the process doesn't seem as "spectacular" as many Crypto projects.

Except for the commercial closed loop, the development of IP means that more people must be involved. Improper handling will greatly dilute the value of OG Holder, which is also a major reason for this incident. However, there are only a few people in the Web3 community, and it is unrealistic to expand the audience relying on users within the community. As mentioned above, project parties generally lack content creation and channel expansion capabilities. Without content creation and channel expansion, it is difficult to expand the audience. Therefore, the only way to expand the audience is to issue more NFTs. However, currently, no one regards NFTs as consumer goods, and continuous issuance of bonds will inevitably cause the bubble to burst.

Bubble Mart's revenue in 2022 was 4.62 billion yuan, with a net profit of 570 million yuan. What can Web3 bring to them? Issuing Molly NFT to make money is not necessary, as there are only a few people in the Web3 community. From a productivity perspective, it is difficult for Web3 to bring them significant growth. But what if we change our perspective? Currently, Bubble Mart's self-owned IP is mainly acquired, which often means a larger upfront investment, including financial investment and betting on its future success. Web3 can help Bubble Mart quickly build a new self-owned IP from scratch and capture early seed users quickly. As for why Bubble Mart hasn't done it yet, I guess it may be because they are concerned about the proportion of financial attributes in it and the risk outweighing the benefits.

A while ago, I had a conversation with a friend who works in the fashion industry. He wanted to help empower Web3 IP by assisting these Web3 teams in creating physical products that they may not have the expertise to produce. However, after discussing with investors, they found it to be impractical due to the short lifespan of most Web3 IPs, while designing and producing physical products takes time.

Actually, after staying in the Web3 industry for a long time, it's necessary to lift our heads and take a look at the world. For a while, I would point to the geometric paintings of Mondrian and say "they look very similar to the artworks on Art Blocks", and I would point to the paintings of Keith Haring and say "they look very similar to that silly NFT". Web3 is a comprehensive discipline that requires us to constantly draw nutrients and broaden our horizons from a wider world. In the end, Web3 is still a small circle, but every honest practitioner has a vision to change the world, and the world is not changed by bowing our heads.