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

1. The Collapse of NFTs

The final boom of NFTs came to a halt with the issuance of coins for Pudgy Penguins, and the recent token issuance of Doodles on Solana only sparked a weak response. Yuga Labs continues to scale down, this time even involving its core IP Cryptopunks. The BitCoin NFT, which was once the center of attention during the last wave of NFT revival, has also nearly returned to zero; these once-crazy concepts have quietly faded away and are no longer in the spotlight.

The initial vision of the 10k PFP project was quite beautiful, with a moderately sized community supporting a grassroots IP project to reach the world. This is in stark contrast to the traditional IP project model, which typically involves investing huge sums to create content. For example, Disney's Marvel Universe, Star Wars, and various animated characters usually require years of accumulation and significant investment to deeply resonate with audiences and ultimately become profitable projects.

NFT is completely different; its entry barrier is extremely low, and the speed of IP creation and assetization is very fast. Creators only need to pay a small amount of Gas fees to sell their works on online platforms, without the need for galleries, toy companies, film companies, or any professional teams. An IP and a new artist are thus born.

Three or 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 NFTs. For Generation Z, who grew up watching Japanese anime, being able to participate in IP investment and incubation, which was once difficult to access, through cryptocurrency is truly a dream come true.

However, after the "Crazy Matryoshka" series following BAYC and the disastrous sub-series Elemental release of Azuki, the vague positioning of NFTs gradually became clearer. It is neither an equity nor an investment, but rather more like an expensive luxury item with accompanying membership benefits. The project team still hopes that we will continuously purchase sub-series to support their ongoing investment in building the core value of the IP roadmap. This creates a contradiction, as the project team is well aware that the cost of content creation is high, but without creating content IP, it is difficult to sustain. Releasing a sub-series every few months continuously drains the enthusiasm of the original series holders, tormenting every member of the community. Waiting for the returns from content may take years, and it is even possible that one may never see them. The cracks began to widen, beautiful fantasies shattered as the floor price dropped, leaving only various disputes.

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

If NFTs are viewed 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 external appearance can quickly attract buyers. For example, Azuki's art style aligns well with Asian aesthetics, and driven by consensus, this grassroots NFT series quickly became the third-largest blue chip after BAYC. In the real world, well-known trendy toys like Brick Bear, Little Yellow Duck, and Molly also lack content support but have become a sensation due to their unique appearances.

However, trends are always fleeting, and without content as the core value, these IPs may become outdated at any time. Limited by the culture of the cryptocurrency space and the extremely low success rate of NFTs, project parties often continuously launch derivatives around an IP. But the reality is that the core has not yet formed, and this wave has already passed.

Of course, there are some types in PFP projects that are well-supported by content, such as Japanese-style NFTs. In the past, I have encountered at least four or five projects with well-known Japanese anime IPs, hoping to make a mark in the NFT market. However, they seem to overlook the fact that the IP fan base is almost completely incompatible with this circle. Secondly, there are already a plethora of merchandise related to 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 an image, and the future empowerment potential is zero. Even if you purchase a Gundam NFT, you can only gain access to the Gundam metaverse "SIDE-G". The profits that Bandai earns from models, games, and animations have nothing to do with you, and the community will not become part of the IP incubation, and may even be seen as outcasts within the entire Gundam fan base. In this regard, the pain points of GameFi are actually quite similar.

At this point, PFP projects have become a false proposition, with only the pragmatic spark of the little penguin continuing to strive. So, does the little picture have another way out? I believe PoP MART may have provided a different answer.

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

The founder Wang Ning had a very simple idea at that time: to create proprietary IP that others cannot take away. In 2016, PoP MART collaborated with Hong Kong designer Wang Xinming to launch the first self-owned trendy toy series, Molly. This pouting little girl character instantly became popular nationwide, driven by the uncertainty of the blind box gameplay and dopamine stimulation. PoP MART began its first round of explosive growth, and by 2019, the annual sales of the single IP Molly had reached 456 million yuan, becoming the core source of revenue at that time.

This collaboration model that combines Japanese gashapon with high-end trendy toys has also been quite common during the NFT boom in the following years. Basic elements designed by artists are then combined by the project team into a series of images for sale and operation. NFTs during the initial launch phase usually adopt a blind box format, where the project team releases various rare combinations of images to enhance the players' purchasing desire.

The two only differ in the method of issuance, but tens of thousands of NFT projects and various blue chips have generally failed. So why is PoP MART迎来第二春?

I once attributed the reasons to difficulties in implementation and high purchasing thresholds. The former seems to have no issues at the moment, while the latter is not the case. NFTs also went through a grassroots period of Free Mint, with Goblintown and MIMIC SHHANS being the standout names of that era, where creators earned a fortune just from transaction fees. Many NFTs in the inscription era are even more decentralized based on this, but that hasn't stopped the decline of NFTs. It's very easy to form or join an IP community, but the challenge lies in how to sustain it.

Therefore, I think we might have made a mistake in the model. After the first round of explosive growth, Molly did not make PoP MART famous in one go, and the company's stock price, like NFTs, has fallen from 2021 all the way to 2024. However, PoP MART eventually turned profitable, relying on a whole wall of IPs. Now, PoP MART has 12 proprietary IPs, including Molly, DIMOO, BOBO&COCO, YUKI, and Hirono, 25 exclusive IPs including THE MONSTERS( containing Labubu), PUCKY, SATYR RORY, and more than 50 non-exclusive co-branded IPs with Harry Potter, Disney, League of Legends, and others.

People's preferences are always changing, and the lifecycle of an IP is limited. But what if I have hundreds of options? Nowadays, Labubu is popular in Europe, America, and Southeast Asia, and the value retention ability of its surrounding dolls is comparable to plastic Maotai. Yuga Labs' ideals were ultimately realized in Web2, and this is not a coincidence.

We should rethink what an IP business is, what the development path of NFTs is, and why PoP MART can achieve such heights 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. The NFT itself is difficult to create a technical gap, no matter how cleverly the Mint process is designed, it ultimately remains a JPG image. The difficulty of NFTs lies in the implementation of IP, which is hundreds of times more difficult than creating 10K PFPs. Yuga Labs wants to build a metaverse, and Azuki wants to create anime. These ideas are all very cool, but these projects, which start with costs in the hundreds of millions, will ultimately only seek funding support from the community.

This extremely compressed world is too restless, and everyone wants to achieve success 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 humble themselves, and the more impatient they are, the worse they fall. The original team of Pudgy Penguins was once such an impatient grassroots team. After their reputation was damaged, they sold the little penguin project at a low price.

At this time, the little penguin met the true talent, Luca Netz. This practitioner, with years of experience in physical marketing, brought the little penguin back to the height it deserved. Luca Netz is indeed building a brand, operating a company for NFT holders. From marketing to plush toys to future games, every step of the little penguin is solid and steady; the company can profit, and the holders can also gain. There is nothing particularly special about this; it is just doing what should be done. It has been proven that bottom-up IP can exist in Web3, but there are too few project parties willing to humble themselves.

Therefore, I really dislike the term "falsification", as if certain things should never have existed. Electric cars were once quite foolish, and Siri on my phone was also quite foolish. But that does not prevent the entire city from being filled with green license plate cars today, and the development of AI goes without saying.

Many so-called discredited tracks, Web3 will continue to attempt in the future, but it lacks a suitable project party.

4. Path

The path to success seems simple, but in reality, it is difficult. The next stop for PFP will ultimately require breaking through the inherent logical framework of cryptocurrency, and a significant accumulation will be necessary to become the next Web3 version of Disney. Whether the scarcity of NFT has played a counterproductive role in the process of becoming mainstream is a question I have discussed in my past articles. If it is defined as trendy consumer goods, then the 10K limit may be too large; if it is defined as a unique type of asset and fundraising method in Web3, then the IP still needs to be transformed into tangible consumer goods to fulfill its promises to the community, rather than a bunch of strange sub-series.

Given the unique culture of the cryptocurrency community and the characteristics of NFTs themselves, the long-term development of an IP is indeed a challenge. How can we further innovate based on these PFPs? How can we expand a project into an IP factory? This may require us to embrace some new ideas and introduce more technologies and gameplay.

5. Is issuing coins the final stop?

The significance of issuing NFT coins is still puzzling. This practice seems more like an exploitation of the lower tiers by the upper tiers, and it dilutes the original value of 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 variations of air coins. Their empowerment often includes staking for on-chain trading dividends, purchasing rights for metaverse items, governance rights, and so on. Ideally, it should be a perfect cycle among holders → stakers → developers. But the reality is, it resembles a kind of air, trapped in a vicious cycle of falling NFT prices, declining mining yields, and decreasing token prices.

For original NFT holders, although the tokens have taken away some dividends and rights, most of them will also receive a large airdrop when the tokens are generated, so no one complains. However, in the long run, as mentioned in the fourth paragraph, this is a form of dilution, and the distribution method like Azuki's Anime is even more blatant plunder.

Short-term popularity 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 rise of many emerging Web2 IPs. NFTs should thrive in such a context, as they possess many irreplaceable characteristics. Four years ago, I regarded them as the Maotai of the digital age, but reality has proven they are more like digital tulips. Those willing to sort through the ruins.