The Final Chapter and Rebirth of NFT: From Bubble Burst to Value Reconstruction

1. The End of the NFT Boom

The last wave of hype in the NFT market has faded. The token issuance of Pudgy Penguins marks the conclusion of NFTs, while Doodles' token issuance on Solana also failed to create much of a stir. Once highly sought-after Bitcoin NFT projects have nearly gone to zero, and the once-crazy narratives have become a thing of the past, with no one paying attention anymore.

10k PFP projects once portrayed a beautiful vision - a moderately sized community helping bottom-up IP projects to go global, which is completely different from the traditional IP project model that relies on substantial financial investment. The entry barrier for NFTs is extremely low; creators only need to pay a small Gas fee to sell their works on OpenSea, without the support of galleries, toy companies, or professional teams, giving birth to a new IP and a new artist.

However, with the excessive derivative development of projects like BAYC and the disastrous release of Azuki's sub-series Elemental, the positioning of NFTs has gradually become clear - they are more like expensive luxury goods with membership benefits, rather than equity or investments. Project teams hope that holders will continuously purchase sub-series to support subsequent IP development, but this practice continually consumes the interests of original series holders, leading to increasing community conflicts. The beautiful fantasy has shattered with the decline in floor prices, leaving only various controversies.

2. New Paradigm of IP Incubation

Viewing NFTs as luxury trendy toys for Generation Z makes the reasons for their rise and fall even clearer. In an era dominated by fast food culture, a lack of content support may not be a bad thing; mere appearance can quickly attract buyers. Well-known trendy toys in the real world, such as Bearbrick, B.Duck, and Molly, also lack deep content support but became popular due to their unique shapes.

However, without content as the core value, these IPs may become outdated at any time. Limited by the cultural characteristics of the cryptocurrency circle and the extremely low success rate of NFT projects, project parties often keep developing derivatives around a single IP. But the reality is that before the core is formed, the craze has already passed.

In contrast, PoP MART offers another development approach for NFT projects. This trendy toy company, which started in Beijing, first rose to prominence by representing Sonny Angel. After losing the agency rights, PoP MART turned to developing its own IP and launched the nationwide popular Molly series.

The success of PoP MART lies in the construction of a complete IP wall. Currently, the company owns 12 proprietary IPs, 25 exclusive IPs, and over 50 non-exclusive co-branded IPs. This diversified IP portfolio effectively addresses the issue of the limited lifespan of a single IP. Today, PoP MART's Labubu series is very popular in the European, American, and Southeast Asian markets, and the value preservation ability of its surrounding dolls is known as "plastic Moutai."

3. The Pragmatic Path of Pudgy Penguins

The success of Pudgy Penguins lies in pragmatism. The difficulty of NFT projects lies in the implementation of IP, which is a challenge hundreds of times more difficult than producing 10K PFPs. Many project teams are too eager for success, wanting to achieve everything in one step, only to end up falling harder.

After experiencing turmoil with the original team, the new leader Luca Netz has brought Pudgy Penguins back on track. Luca leverages years of experience in physical marketing to turn the little penguins into a true brand. From marketing to plush toys and future game development, every step of Pudgy Penguins is steady and solid, achieving both company profitability and benefits for holders. This bottom-up IP incubation model proves to be feasible in the Web3 space, and the key lies in whether the project team is willing to be down-to-earth.

4. The Future Path of NFTs

The next stage of development for NFTs needs to break through the inherent thinking framework of the cryptocurrency circle. To become the Disney of the Web3 era, a significant amount of time is required for accumulation. NFT projects should rethink the role of scarcity in the process of popularization. If NFTs are positioned as trendy consumer goods, a scale of 10K may be too limited; if viewed as unique assets and fundraising methods for Web3, then IP ultimately still needs to be converted into physical consumer goods to fulfill commitments to the community, rather than endlessly launching sub-series.

How to innovate based on the existing PFP? How to expand a single project into an IP incubation factory? The answers to these questions may require the introduction of new concepts, technologies, and gameplay.

5. The Significance and Risks of Token Issuance

The significance of issuing tokens for NFT projects remains questionable. This practice appears more like a dilution of the original NFT value and may simply be a means for project parties to seek quick liquidity exit. From APE to DOOD, these tokens are often endowed with functions such as staking dividends, purchasing rights for metaverse items, and governance rights. Ideally, this should create a virtuous cycle among holders, stakers, and developers. However, in reality, it is more likely to fall into a vicious cycle of NFT depreciation, declining mining yields, and token devaluation.

For original NFT holders, although the tokens dilute some rights, they usually receive a large airdrop at the TGE, so there are few complaints. However, in the long run, this is undoubtedly a form of value dilution, and the distribution methods of certain projects are even blatant encroachments on interests.

Conclusion

In this fast-paced era that seeks instant gratification, we have witnessed the rise of many emerging Web2 IPs. NFTs should have thrived in such an environment, as they possess many irreplaceable qualities. Four years ago, some likened it to "cyber Moutai", but reality has proven it to be more like "cyber tulips". Although there are few willing to rebuild in the ruins, I believe that beneath this rubble lies the next Labubu - an IP with limitless potential waiting to be discovered.