The Final Chapter and Reboot of NFT: Issuing Coins is Not the Goal

1. The Collapse of NFTs

The last call of the NFT ends with the issuance of coins from Pudgy Penguins, while the recent token issuance of Doodles on Solana only stirred up a few ripples. Yuga Labs' subtraction continues, this time even affecting the most iconic IP, Cryptopunks. Those BitCoin NFTs from the last wave of NFT revival are also nearly at zero, and the once-crazy narratives have indeed fallen into obscurity, no longer attracting any attention.

The vision of 10k PFP was once beautiful, 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 typically spend money to support content. For example, Disney's Marvel Universe, Star Wars, and various animated characters often require years of accumulation along with countless funds to make these IPs deeply resonate with people, ultimately becoming a gold mine.

NFT is completely different; its entry barrier is very low, and the speed of shaping an IP and assetizing IP is quite fast. Creators only need to pay some Gas to put their artwork online for sale, without galleries, toy companies, film companies, or any professional teams required, an IP and a new artist are thus born.

We witnessed, three to four years ago, that some grassroots IPs became popular in the top entertainment circles of Europe, America, Japan, and South Korea. A grassroots artist can also achieve a turnaround through NFT. For me, as a member of Generation Z who grew up watching Japanese anime, being able to participate in IP investment and incubation that ordinary people could not access through Crypto is indeed a dreamlike experience.

However, after the "crazy nesting dolls" of a certain blue-chip project and the disastrous sub-series launch of a well-known project, the ambiguous status of NFTs gradually became clearer. They don't seem to be a form of equity or investment; rather, they resemble an expensive luxury item with membership benefits. The project team also hopes that we will continue to purchase sub-series to support their ongoing efforts to invest in the IP value core of their Roadmap. The seed of contradiction was planted here: the project team knows that creating content is expensive, but without content, the IP will die. The sub-series, released every few months, continually drains the resources of the OG series holders, tormenting everyone in the community. The feedback from the content may take many years to arrive, or perhaps this feedback will never come. The cracks are starting to widen, and those beautiful fantasies are beginning to shatter as the floor price drops, leaving nothing but various disputes.

2. The Ace MCN in the IP Industry

If we regard NFTs as luxury trendy toys of Generation Z, their causes and failures become clearer. In the fast-food era, lacking content is not necessarily a bad thing; after all, it can quickly attract buyers just based on appearance. For example, the style of a certain well-known project aligns well with Asian aesthetics, and under this consensus, this grassroots-produced NFT series can follow closely behind a major project to become the third largest blue-chip. In the real world, famous trendy toys like Bearbrick, B.Duck, and Molly also lack content support, yet they all became popular due to their unique appearances.

However, trends are always fleeting; without content as the core value, these IPs may become outdated at any time. Limited by the culture of the coin circle and the extremely low success rate of NFTs, project teams often focus on constantly creating derivatives around an IP. But the reality is that before the core has even taken shape, this trend has already passed.

Of course, PFP projects also exist in a type supported by sufficient content, namely Japanese-style NFT. In the past, I have at least seen four or five projects holding well-known Japanese anime IPs hoping to thrive in the NFT market, but they seem to have not considered that the fan base of the IP is almost completely incompatible with this circle. The second point is that there are already so many peripheral products of Japanese anime that people can't choose anymore. Why would fans spend hundreds of times the price to buy a small image? Of course, the most important point is the third one: this small image can only be an image, and the imaginative space for future empowerment is zero. Even if you buy a high-priced NFT, you can only gain access rights to the "SIDE-G" of the Gundam metaverse. Bandai's profits from models, games, and animations naturally have nothing to do with you, and the community will not be part of the IP incubation; it can even be considered an outsider within the entire Gundam fan base. In this regard, the pain points of GameFi are actually quite similar.

At this point, the PFP project has become a false proposition, with only the pragmatic spark of the little penguin continuing to strive. So, does the small image really have another way out? I think a certain well-known trendy toy company may have provided a different answer.

This small box store originated from the Beijing Oumeihui Shopping Center and turned around thanks to the agency Sonny Angel. This single series contributed nearly 30% of the company's sales at that time. The envious rights holder reclaimed the exclusive agency rights a year later, but this move instead led to the birth of an IP empire.

The founder's idea at that time was very simple: to create their own IP, an IP that cannot be taken away by others. In 2016, the company collaborated with a Hong Kong designer to launch its first self-owned trendy toy series - Molly. This little girl with a pouty face instantly became popular across the country, driven by the excitement of uncertainty from the blind box gameplay and dopamine stimulation. The company began its first phase of rocket-like growth, and by 2019, Molly's single IP annual sales had reached 456 million yuan, becoming the core source of income for the company at that time.

This approach, which combines Japanese gashapon with high-end trendy toys for collaborations, became quite common in the following years of the NFT craze. Basic elements designed by artists are then handed over to the project team to be combined into a series of images for sale and operation. NFTs are generally released in blind box format during the initial launch phase, with the project team releasing various rare combinations of images to enhance players' purchasing desire.

The two are just different forms of issuance, but tens of thousands of NFT projects and various blue chips have generally failed. Why is the company now experiencing a second spring?

I used to attribute the reasons to difficulties in landing and high purchasing thresholds. The former seems to have no issues at present, but the latter is actually not the case. NFT also had its Free Mint period, with Goblintown and MIMIC SHHANS being the golden dogs of that time. Creators made a fortune just from transaction fees, and many NFTs from the inscription era are even more decentralized on this basis, but this still does not stop the decline of NFTs. It is very easy to build or join an IP community, but the challenge is in continuation.

So, I think we might have a model error. After the initial rocket-like rise, Molly did not make the company a legend; the entire company's stock price fell from 21 to 24 just like NFTs. However, the company turned profitable, relying on a whole wall of IP. Now the company has 12 proprietary IPs including Molly, DIMOO, BOBO&COCO, YUKI, and Hirono, 25 exclusive IPs including THE MONSTERS (including Labubu), PUCKY, and SATYR RORY, and over 50 non-exclusive co-branded IPs with Harry Potter, Disney, League of Legends, etc.

People's preferences are always fickle, and the lifespan of an IP is limited. But what if I have hundreds of choices? Nowadays, Labubu is booming in Europe, America, and Southeast Asia, and the value retention of its surrounding toys is comparable to plastic Maotai. The ideal state of a large project is finally realized in Web2, but none of this is a coincidence.

We need to rethink what an IP business is, what the NFT roadmap is, and why the company can achieve such a height without content support.

3. Pragmatic Projects

I also participated in the Little Penguin Hong Kong event last year, and this NFT project is always so enthusiastic towards the community.

The success of Pudgy Penguins lies in being pragmatic, pragmatic, or pragmatic. There is no technical distinction in NFTs themselves; no matter how cleverly designed the minting process is, it ultimately boils down to a JPG. The difficulty with NFTs lies in the realization of the IP, which is hundreds of times more challenging than creating 10K PFPs. Some projects want to create a Metaverse, while others want to focus on anime. OK, that’s all very cool, but these projects with starting costs in the hundreds of millions will only look to the community members to cough up the money.

This extremely compressed world is too restless, and everyone is eager for quick success. Holders want to make a fortune, and project parties want to reach the top in one step. Very few blue-chip projects are willing to bow their heads, and in the end, the more impatient they are, the harder they fall. The original team of Pudgy Penguins was also once such a restless grassroots team. After suffering from bad reviews, they sold the little penguins at a low price.

At this time, the little penguin met its true owner, Luca Netz, who has many years of experience in physical marketing and pulled the little penguin back to the height it should be. Luca Netz is really building a brand; he operates a company for NFT holders. From marketing to plush toys to future games, every step of the little penguin is solid, allowing the company to profit and the holders to profit as well. There is nothing particularly special about all of this; it is just doing what it is supposed to do. Therefore, it has been proven that bottom-up IP can exist in Web3, but there are too many project parties that cannot lower their stance.

So, I really hate the term "falsification", as if certain things never should have existed. Electric vehicles used to be very stupid, and Siri on my phone was also very stupid. But that doesn't prevent the whole city from being filled with green license plate cars today, and there's even less to say about AI.

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

4. Path

The path to success is simple yet difficult. The next stop for PFP will ultimately need to break free from some inherent logical frameworks of Crypto. To become the next Web3 Disney requires a significant amount of accumulation. Whether the scarcity of NFTs has been counterproductive in the process of reaching the masses has been discussed in my previous articles. If defined as trendy consumer goods, then the limitation of 10K may be too great. If defined as a unique asset and fundraising method of Web3, then IP must ultimately be transformed into physical consumer goods to fulfill its promise to the community, rather than a bunch of strange sub-series.

Based on the unique culture of the coin circle and the attributes of NFTs themselves, it is indeed a helpless situation to cling to an IP until old age. How can we further elaborate on these PFPs? How can we expand a project into an IP factory? This may require us to accept some new concepts and introduce more technology and gameplay.

5. Is issuing coin the final stop?

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

From one coin to another, without exception, they all seem like variants of air coins. Their empowerment often involves staking to earn some on-chain transaction dividends, purchasing items in the Metaverse, or governance rights. Ideally, it is a perfect cycle among holders → stakers → developers. However, in reality, it resembles more of a cycle of air, caught in a death spiral of NFT devaluation, diminishing mining profits, and token devaluation.

For OG NFT holders, although the Token has taken some dividends and rights, most of them will also receive a large airdrop during 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 that of a certain project's animation is even more of a blatant robbery.

Short-term hype is important, but the project's longevity is more important; don't let issuing coins be the final stop.

Conclusion

In this fast-paced, dopamine-driven era, we have witnessed the rise of many emerging Web2 IPs. NFT should thrive in this era, as it possesses many irreplaceable characteristics. Four years ago, I regarded it as cyber Moutai, but the reality is that it is cyber tulip. Few are willing to tend to the ruins, however.