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

1. The Collapse of NFTs

The NFT craze seems to have reached its end. The token issuance of Pudgy Penguins became the last highlight in this field, while the token issuance of Doodles on Solana only stirred up some small ripples. Yuga Labs continues to contract, this time even involving its most core IP—Cryptopunks. Those Bitcoin NFT projects that were the focus of attention during the last wave of NFT resurgence are now nearly worthless. The once-crazy narratives have lost their appeal, and no one is paying attention anymore.

The original vision of the 10k PFP project was promising. It aimed to help a grassroots IP project reach the world through a moderately sized community. This is completely different from the traditional model of IP projects, which often involve a huge investment in content production upfront. Traditional IPs like Disney's Marvel Universe, Star Wars, and various animated characters typically require years of accumulation and substantial investment to become deeply ingrained in people's hearts and ultimately turn into a gold mine.

In contrast, the entry threshold for NFTs is extremely low, allowing for the rapid creation and monetization of IP. Creators only need to pay a small amount of Gas fees to sell their works on Opensea, without the need for galleries, toy companies, film companies, or professional teams, giving birth to a new IP and artist.

Three or four years ago, we also witnessed some bottom-up 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 Gen Z who grew up watching Japanese anime, being able to participate in IP investment and incubation that was previously difficult to access through cryptocurrency is a very dreamy experience.

However, after the "Crazy Matryoshka" series following BAYC, and the disastrous sub-series Elemental from Azuki, the positioning of NFTs has gradually become clearer. They are not like equity or investments, but rather expensive luxury items with membership benefits. The project parties also hope that we will continue to buy sub-series to support their ongoing investment in building the core value of the IP roadmap. This creates a contradiction: the project parties know that content production costs are high, but without creating content IP, they will perish. Releasing a sub-series every few months continuously drains the enthusiasm of the original series holders, tormenting everyone in the community. Waiting for the returns from content may take years, or it may never come at all. The rift begins to widen, and the beautiful illusions shatter with the decline of the floor price, leaving only various controversies.

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

If we regard NFTs as luxury trendy toys for Generation Z, the reasons for their rise and fall become clearer. In an era dominated by fast-food culture, a lack of content is not necessarily a bad thing, as mere appearance can quickly attract buyers. For example, Azuki's art style aligns well with Asian aesthetics, and under this consensus, this grassroots NFT series can follow BAYC to become the third largest blue-chip collection. Similarly, well-known trendy toys in the real world such as Bearbrick, B.Duck, and Molly also lack content support, yet they all became popular due to their unique appearances.

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

Of course, there are also types in PFP projects that have sufficient content support, such as Japanese-style NFTs. I have seen at least four or five projects with well-known Japanese anime IPs that hope to make a big splash in the NFT market. However, they seem to overlook a fact: the fan base of the IP is almost completely incompatible with this circle. Secondly, there are already countless peripheral products of Japanese anime; why would fans spend hundreds of times the price to purchase a small image? The key point is that this small image is just that, an image, with zero potential for future empowerment. Even if you purchase a Gundam NFT, you can only gain entry rights to the Gundam Metaverse 'SIDE-G'. The profits Bandai earns from models, games, and animations are naturally unrelated to you, and the community will not become a part of IP incubation; it may even be seen as an outlier within the entire Gundam fan base. In this respect, 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 continuously. So, does the little image have another way out? I believe PoP MART may have provided a different answer.

This small cubicle store, originating from the Beijing Euro-America Shopping Center, turned around its fortunes by relying on the代理Sonny Angel. This single series contributed nearly 30% of PoP MART's sales at the time. The envious copyright holder reclaimed exclusive agency rights a year later, but this move instead facilitated the birth of an IP empire.

Wang Ning(, the founder of PoP MART), had a very simple idea at that time: 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. This little girl with a pouting image quickly became popular across the country. Through the uncertainty of the blind box gameplay and dopamine-driven stimulation, PoP MART began its first round of rapid growth. By 2019, the annual sales of the single IP Molly had reached 456 million yuan, becoming PoP MART's core source of income at that time.

This model of combining Japanese capsule toys with high-end trendy toys for collaboration has also been quite common in the NFT craze in the following years. Basic elements are designed by artists and then assembled into a series of images for sale and operation by the project team. NFTs typically adopt a blind box format during the initial launch phase, where the project team releases 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-chip projects have generally failed. So why is PoP MART experiencing a second spring now?

I once attributed the reasons to difficulties in landing and high purchasing thresholds. From the current perspective, the former does indeed pose a problem, but the latter does not. NFTs also went through a grassroots period of Free Mint, with Goblintown and MIMIC SHHANS being the star projects of that time, where creators earned a fortune solely through transaction fees. Many NFTs in the inscription era are more decentralized based on this foundation, but this cannot stop the decline of NFTs. Forming and joining an IP community is very simple, but the difficult part is how to sustain it.

Therefore, I think we may have adopted the wrong model. After the first round of rapid growth, Molly did not make PoP MART famous overnight, and the company's stock price fell from 2021 all the way to 2024, just like NFT. However, PoP MART eventually turned around, relying on a whole wall of IPs. Today, PoP MART has 12 proprietary IPs including Molly, DIMOO, BOBO&COCO, YUKI, and Hirono, 25 exclusive IPs including THE MONSTERS( with Labubu), PUCKY, and SATYR RORY, as well as more than 50 non-exclusive co-branded IPs with Harry Potter, Disney, League of Legends, and others.

Human preferences are always unpredictable, and the lifecycle of 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 ability of its surrounding dolls is comparable to plastic Maotai. The ideals of Yuga Labs were ultimately realized in Web2, and all of this is not a coincidence.

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

3. Pudgy Penguins

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

The success of Pudgy Penguins lies in being pragmatic, pragmatic, and pragmatic. NFTs themselves are difficult to differentiate technically, no matter how cleverly the minting process is designed, in the end, it's still just a JPG image. The real challenge for NFTs is the realization of IP, which is hundreds of times more difficult than creating 10K PFPs. Yuga Labs wants to build a metaverse, while Azuki hopes to create anime. These ideas are cool, but these projects, which start at over a hundred million in costs, will ultimately seek financial support from community members.

In this highly compressed world, people want to succeed quickly. Holders want to make big money, and project teams want to reach the top in one step. Few blue-chip projects are willing to lower their stance, and the more eager they are for success, the harder they fall. The original team of Pudgy Penguins was once such an impatient grassroots team, and after their reputation was damaged, they sold the little penguin project at a low price.

At this moment, the little penguin met its true owner, Luca Netz. This practitioner with years of experience in physical marketing brought the little penguin back to its rightful height. Luca Netz is indeed building a brand; he operates a company for NFT holders. From marketing to plush toys, and then to future games, every step of the little penguin is solid, allowing the company to be profitable and the holders to gain profits as well. There is nothing particularly special about all of this; it is just doing what it is supposed to do. It has been proven that bottom-up IP can exist in Web3; it’s just that there are too many project parties that cannot lower their status.

Therefore, I really dislike the term "falsification," as if certain things should never exist. Electric vehicles used to be quite foolish, and Siri on my phone was also quite foolish. But that does not prevent the entire city from being filled with new energy vehicles today, and AI goes without saying.

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

Four, Path

The path to success seems simple, but is actually difficult. The next phase of PFP must break through some inherent logical frameworks of cryptocurrencies; to become the next Web3 version of Disney requires a substantial accumulation. Whether the scarcity of NFTs has played a counterproductive role in the process of becoming mainstream is a question I discussed in my previous articles. If defined as trendy consumer goods, then a scale of 10K may be too small; if defined as a unique asset and fundraising method in Web3, then IP ultimately needs to be converted into physical consumer goods to fulfill its promises to the community, rather than a bunch of strange sub-series.

Based on the unique culture of the cryptocurrency circle and the attributes of NFTs themselves, focusing on a single IP for a long time is also a helpless move. How can we innovate based on these PFPs? How can we expand a single project into an IP factory? Perhaps this requires us to embrace some new concepts and introduce more technologies and gameplay.

5. Is issuing coins the final destination?

The significance of issuing tokens for NFTs remains unclear to this day. This practice resembles an exploitation of the lower tier by the upper tier, and it also dilutes the original value of the NFTs. I can only understand it as the project team seeking a convenient way to exit with liquidity.

From APE to DOOD, without exception, they all seem like variants of air coins. Their functionalities usually include staking for on-chain transaction dividends, purchasing items in the metaverse, governance rights, and so on. Ideally, it should be a perfect cycle among holders → stakers → developers. But the reality is, it resembles more of a bubble, caught in a vicious cycle of falling NFT prices, declining mining yields, and dropping token prices.

For original NFT holders, although the tokens have taken away some dividends and rights, most of them received a large airdrop during the token generation event (TGE), so no one complained. However, in the long run, this is a form of dilution, and the distribution method like Azuki's Anime is even more blatant plunder.

Short-term hype is certainly important, but the long-term survival of the project is even more crucial. Don't let issuing coins be the final stop.

Conclusion

In this fast-paced, dopamine-driven era, we have witnessed the emergence of many new Web2 IPs.