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

1. The Decline of NFTs

The last boom of the NFT market came to a halt with the token issuance of Pudgy Penguins. Recently, the token issuance of Doodles on Solana only caused a weak response. Yuga Labs continues to shrink its business, even involving its core IP Cryptopunks. Bitcoin NFT projects, which were once the focus of attention during the last wave of NFT revival, are also nearly at zero, and these once-crazy narratives have fallen into decline and are no longer receiving attention.

The initial concept of the 10k PFP project is quite attractive - a moderately sized community facilitates a bottom-up IP project to go global, which is in stark contrast to the traditional IP project model that requires massive upfront investment to create content. Traditional IPs like the Marvel Universe and Star Wars often take years of accumulation and huge financial investment to resonate with people and ultimately become a cash cow.

The threshold for NFT is extremely low, allowing for the quick creation and monetization of IP. Creators only need to pay a small Gas fee to sell their works on trading platforms, without the need for galleries, toy companies, or professional teams; an IP and an artist are thus born.

Three to four years ago, we witnessed some grassroots IPs becoming popular in the top entertainment circles of Europe, America, Japan, and South Korea. Ordinary artists can also achieve a comeback through NFT. For the Generation Z that grew up watching Japanese anime, being able to participate in IP investment and incubation that were previously hard to access through cryptocurrency is a dreamlike experience.

However, after the "Crazy Matryoshka" of BAYC and the disastrous sub-series Elemental of Azuki were released, the positioning of NFTs gradually became clearer. It is not a form of equity or investment, but rather an expensive luxury good with associated membership rights. The project parties also hope that we will continue to purchase sub-series to support their subsequent IP development plans. This creates a contradiction, as the project parties understand that content development is costly, but without developing content IP, they will perish. Releasing a sub-series every few months continuously drains the patience of the original series holders, tormenting everyone in the community. The wait for returns from content may take years, or may never come at all. The divergence gradually expands, beautiful fantasies are shattered with the decline in floor prices, leaving only various disputes.

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

If NFTs are regarded as luxury trendy toys for Generation Z, the reasons for their rise and fall become clearer. In a fast-paced era, lack of content is not necessarily a bad thing; mere appearance can quickly attract buyers. For example, Azuki's artistic style conforms to Asian aesthetics, and under this consensus, this grassroots-produced NFT series can follow BAYC to become the third major blue chip. In the real world, well-known trendy toys like Bearbrick, B.Duck, and Molly also became popular solely due to their unique appearances, without any content support.

However, trends are fleeting, and without content as a value support, these IPs may become obsolete at any time. Limited by the culture of the cryptocurrency circle and the extremely low success rate of NFTs, project parties often launch derivatives around a single IP. But the reality is that the core has not yet taken shape, and this trend has already passed.

Of course, there are also some content-rich PFP projects, such as Japanese NFTs. In recent years, I have seen several well-known Japanese anime IPs hoping to make a big splash in the NFT market, but they seem to have not considered the almost complete incompatibility between the IP fan base and the NFT circle. Secondly, Japanese anime peripherals are already abundant; why would fans spend hundreds of times the price to buy a small picture? The key point is that this small picture is limited to the image itself, and there is zero imagination space for future empowerment. Even if you purchase a Gundam NFT, you can only gain access to the "SIDE-G" of the Gundam metaverse. The community will not become part of the IP incubation, and in the entire Gundam fan base, it even seems out of place. In this regard, the pain points of GameFi are also very similar.

It can be seen that the PFP project has become a false proposition, and only the pragmatic spark of Little Penguin is still striving. So, does the small image have another way out? PoP MART may provide a different answer.

This small store originating from Beijing turned around by代理Sonny Angel. This single series contributed nearly 30% of PoP MART's sales at that time. A year later, the envious copyright owner reclaimed the exclusive agency rights, which instead facilitated the birth of an IP empire.

The founder Wang Ning's idea is very simple: to create proprietary IP that cannot be taken away by others. In 2016, PoP MART collaborated with Hong Kong designer Wang Xinming to launch the first self-owned trendy toy series, Molly, and this pouting little girl image instantly became popular nationwide. Through the uncertainty stimulation of the blind box gameplay, PoP MART began its first round of rapid growth. By 2019, the annual sales of Molly as a single IP had reached 456 million yuan, becoming PoP MART's core source of revenue.

This model that combines Japanese gachapon with high-end trendy toys has also become quite common in the recent NFT boom. Basic elements are designed by artists and then combined by the project team into a series of images for sale and operation. The NFT launch phase usually also adopts a blind box format, where the project team releases various rare combination images to stimulate players' purchasing desire.

The two only differ in the form of issuance, but thousands of NFT projects have generally failed alongside major blue chips. However, PoP MART is now迎来第二春, what is the reason?

I used to attribute the reasons to difficulties in landing and high buying thresholds. The former indeed seems to have problems at present, but the latter is not the case. There was also a grassroots period of free minting for NFTs, with Goblintown and MIMIC SHHANS being star projects of that time, where creators made a fortune just from transaction fees. Many NFTs of the inscription era are more decentralized on this basis, but this also cannot prevent the decline of NFTs. It is easy to form or join an IP community, but the challenge lies in sustainable development.

Therefore, I believe the issue may lie in the model. After the first round of rapid growth, Molly did not let PoP MART soar; the company's stock price, like NFTs, fell from 2021 all the way down to 2024. However, PoP MART ultimately turned profitable, relying on a whole wall of IPs. Now, PoP MART has 12 proprietary IPs, including Molly, DIMOO, BOBO\u0026COCO, YUKI, and Hirono, 25 exclusive IPs including THE MONSTERS(, Labubu), PUCKY, and SATYR RORY, as well as over 50 non-exclusive co-branded IPs such as Harry Potter, Disney, and League of Legends.

People's preferences are always unpredictable, and the lifecycle of an IP is limited, but what if I have hundreds of options? Nowadays, Labubu is booming in Europe, America, and Southeast Asia, and the value retention ability of its surrounding dolls is regarded as "plastic Moutai." The ideals of Yuga Labs were ultimately realized in Web2, and none of this is by chance.

We need to rethink what the IP business is, what the development path of NFTs is, and why PoP MART can achieve such heights in the absence of content support.

3. The Success Path of Pudgy Penguins

Last year I also participated in the Little Penguin event in Hong Kong, and this NFT project has always been enthusiastic towards the community.

The success of Pudgy Penguins lies in practicality, practicality, or practicality. NFTs themselves are difficult to create a technological gap; no matter how cleverly the minting process is designed, it ultimately comes down to an image. The difficulty of NFTs lies in the implementation of IP, which is hundreds of times more challenging than creating a 10K PFP. Some platforms want to build a metaverse, while some projects want to create anime. These ideas are cool, but these projects, which have costs starting in the hundreds of millions, will only raise funds from community members.

This highly compressed world is too impetuous, and everyone wants to achieve fame overnight. Holders want to make a fortune, while project teams want to reach the top in one step. Few blue-chip projects are willing to be grounded, and in the end, the more impatient they are, the worse they fall. The original team of the little penguin was also so impetuous that after their reputation was damaged, they sold the project at a low price.

At this time, the little penguin met its true owner, Luca Netz. This practitioner, who has years of experience in physical marketing, brought the little penguin back on track. Luca Netz is truly 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 and steady. The company can be profitable, and holders can also profit. This is all very ordinary; it is just doing what needs to be done. It has been proven that bottom-up IP is viable in Web3, but there are too many projects that can't humble themselves.

Therefore, I am very averse to the term "falsification", as if certain things should never have existed. Electric vehicles were once very immature, and the voice assistants in mobile phones were also quite clumsy. But this does not prevent new energy vehicles from being seen everywhere in cities today, and AI is even more ubiquitous.

Many so-called discredited tracks will still be tried in the future of Web3; it just lacks a suitable project party.

Four, The Road Ahead

The path to success is simple yet difficult. The next step in the development of PFP must break through the inherent logical framework of cryptocurrency; to become the next Web3 version of Disney requires long-term accumulation. Has the scarcity of NFT always hindered its approach to the masses? I discussed this issue in my previous article. If it is defined as a trendy consumer product, then a scale of 10K may be too small; if it is defined as a Web3-specific asset and fundraising method, then the IP ultimately still needs to be converted 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 cryptocurrency space and the inherent attributes of NFTs, it is difficult to avoid the situation of sticking to a single IP. How can we further innovate 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. What is the significance of token issuance?

The significance of issuing tokens for NFTs remains unclear to this day. It resembles more of an exploitation of the lower tiers by the upper tiers, as well as a dilution of the intrinsic value of NFTs. I can only understand it as a means for projects to seek convenient exit liquidity.

From APE to DOOD, without exception, they all resemble variants of air coins. Their empowerment often involves staking to obtain on-chain trading dividends, purchasing rights for metaverse items, governance rights, and so on. Ideally, it is a perfect cycle for holders, stakers, and developers. But in reality, it resembles a kind of air, caught in a vicious cycle of NFT devaluation, declining mining yields, and token depreciation.

For native NFT holders, although the tokens have taken away some dividends and rights, they usually receive a large airdrop during the initial token distribution, so no one complains. However, in the long run, this is indeed a form of dilution, and the animated version allocation of certain projects is even more blatant in its plunder.

While short-term hype is certainly important, the long-term survival of a project is even more crucial. Don't let the issuance of coins become the final destination.