How do PFP NFT projects dominate the NFT market?

On Ethereum, profile picture NFTs ( PFP ) account for 70% of the total NFT market value, far exceeding other types. Generative art and virtual land rank second and third with shares of 13.5% and 8%, respectively. The popularity of PFPs is mainly due to their easily understandable nature and market speculation.

News and announcements often trigger excitement among people, driving up the floor price and attracting the attention of traders and collectors. After its successful launch in April 2021, BAYC inspired many projects to follow suit. BAYC dominates the PFP ecosystem, with a market value more than four times that of its main competitors combined. This success can be attributed to its strong community-building capabilities and its ability to attract celebrity attention.

However, relying solely on speculation makes it difficult to maintain long-term value. BAYC realized this and took proactive steps to stand out. They launched the $APE token and the Otherside metaverse project in the first quarter of 2022, expanding their ecosystem. Other PFP projects also began to build unique ecosystems in hopes of standing out from the competition. Top PFP teams have also attracted funding support from well-known venture capital.

Azuki has achieved success through community-centered ecosystem development. The launch of Hilumia is likely to further enhance its ecosystem, becoming a virtual hub with gaming elements. RTFKT focuses on multiple airdrop activities, each targeting different application scenarios. The Animus project is expected to be the key that connects various parts of its ecosystem.

Doodles recently launched DoodleMap, showcasing its ambition to become a major brand in entertainment and lifestyle. They are expanding to mainstream audiences, starting with the Doodles 2 project. Doodles has chosen to launch the Doodles 2 wearable devices on the Flow blockchain, officially stepping into multi-chain development.

2023 will be a pivotal year for PFP projects, as they attempt to break out of the Web3 circle and expand to a broader audience. Successful PFP projects not only need to provide financial incentives but also need to establish an emotional connection with the brand through storytelling and unique value propositions. While there is uncertainty in expanding to mainstream audiences, it also holds tremendous opportunities.