The Final Chapter and Restart of NFT: Reflections from Prosperity to Silence

1. The Decline of the NFT Craze

The prosperity of the NFT market seems to have come to an end. The token issuance of Pudgy Penguins became the last climax of NFTs, while the token issuance of Doodles on Solana only sparked a weak response. Even giants like Yuga Labs are constantly scaling down, and even their most representative project, Cryptopunks, has not been spared. The Bitcoin NFT projects that were highly regarded in the last wave of NFT revival have also almost all been wiped out, and the once-crazy narrative has become a fleeting memory.

10,000 PFP( Profile Picture) as a standard scale for an NFT series has been regarded as an ideal choice. It can support a moderately sized community and help a bottom-up IP project achieve success. This model is fundamentally different from traditional IP projects, which typically require significant upfront investment and years of accumulation to create a deeply resonant IP image.

In contrast, the threshold for NFTs is extremely low. Creators only need to pay a small amount of Gas fees to sell their works on platforms like Opensea. There is no need for support from galleries, toy companies, or film studios; a brand new IP and artist can emerge. This allowed some grassroots artists to rise to fame in the top entertainment circle a few years ago and also gave ordinary people the opportunity to participate in what was once an unattainable investment and incubation of IP.

However, with projects like BAYC continuously launching sub-series and the disastrous release of Azuki's Elemental series, the positioning of NFTs has gradually become clearer. They are more like expensive luxury goods with membership benefits rather than equity or investment. Project teams hope that holders will continuously purchase new series to support their long-term development plans, but this practice is depleting the enthusiasm of original series holders. The cost of content creation is high, yet it's difficult to survive without creating content IP. Issuing a new series every few months is akin to draining the original series holders, leaving community members exhausted. Waiting for content to bring returns may take years, or it may never come at all. The contradictions are intensifying, and beautiful fantasies are shattered by the falling floor prices, leaving only various controversies.

2. The Ace MCN in the Trendy Toy World - PoP MART

If NFTs are considered luxury trendy toys for Generation Z, the reasons for their rise and fall become clearer. In this era dominated by fast-food culture, a lack of content support is not a fatal weakness. The appearance alone can quickly attract buyers; for example, Azuki's art style aligns well with Asian aesthetics, allowing it to become the third largest blue-chip NFT project after BAYC without a strong background. Popular trendy toys in the real world, such as Bearbrick(, the B.Duck, and Molly, also lack rich content support but became a sensation due to their unique appearances.

However, trends are always fleeting. Without content as a core value support, 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 teams often launch derivatives around an IP continuously. But the reality is that before the core of the IP has taken shape, this wave of enthusiasm has already passed.

Although there are some NFT projects with rich content support, such as certain Japanese NFT projects, these projects often overlook a key issue: the IP fan base is almost completely incompatible with the NFT community. In addition, the merchandise of Japanese anime is already abundant, and fans have no reason to spend hundreds of times the price to purchase a small image. Most importantly, these NFTs are merely images, and the future application space is almost zero. Even if you purchase a Gundam NFT, you can only gain access to the Gundam metaverse "SIDE-G," and cannot share the profits that Bandai earns from models, games, and animations. Within the entire Gundam fan community, NFT holders may even be regarded as outliers.

In this case, PFP projects seem to have become a false proposition, and only pragmatic projects like Pudgy Penguins are still making continuous efforts. So, do small images really have any other way out? PoP MART may offer a unique answer.

This small box store that started in Beijing has transformed through the agency of Sonny Angel. This one series alone contributed nearly 30% of PoP MART's sales. After the copyright holder reclaimed the exclusive agency rights, PoP MART instead embarked on the journey of building an IP empire.

In 2016, PoP MART collaborated with Hong Kong designer Wang Xinming to launch the first自主潮玩系列Molly. This pouting little girl character quickly became popular nationwide, stimulating consumers' dopamine secretion through the uncertainty of blind box play. PoP MART thus began rapid growth, and by 2019, the annual sales of the single IP Molly had reached 456 million yuan, becoming the company's core source of revenue.

This combination of Japanese gashapon and high-end trendy toys in a co-branding model became quite common during the subsequent NFT craze. Artists design the basic elements, which are then combined by the project team into a series of images for sale and operation. NFTs typically adopt a blind box format during the initial launch phase, where the project team showcases various rare combinations of images to stimulate purchasing desire.

The main difference between the two lies in the form of release, but why have tens of thousands of NFT projects and various blue chips generally failed, while PoP MART has welcomed a second spring?

The previous attribution may be the difficulty in landing and the high purchasing threshold. The former does exist, but the latter is not the main reason. NFTs also had a period of Free Mint, where projects like Goblintown and MIMIC SHHANS achieved great success, with creators earning a fortune solely from transaction fees. The NFT era of inscriptions took decentralization a step further, but none of this could stop the decline of NFTs. It is easy to form or join an IP community, but the challenge lies in how to sustain it.

Therefore, the issue may lie in the model. After the first round of rapid growth, Molly did not allow PoP MART to soar; the company's stock price has been declining from 2021 to 2024, similar to the situation with NFTs. However, PoP MART ultimately achieved a rebound, relying on a complete wall of IPs. Currently, PoP MART owns 12 proprietary IPs including Molly, DIMOO, BOBO&COCO, YUKI, and Hirono, 25 exclusive IPs including THE MONSTERS) with Labubu(, PUCKY, SATYR RORY, and more than 50 non-exclusive co-branded IPs with Harry Potter, Disney, League of Legends, etc.

People's preferences are always unpredictable, and the lifecycle of a single IP is limited. But what if you have hundreds of options? Nowadays, Labubu has become popular in Europe, America, and Southeast Asia, and the value retention ability of its surrounding dolls can be termed as "plastic Moutai." The ideals of Yuga Labs have ultimately been realized in the Web2 space, which is not a coincidence.

We need to rethink what the IP business is, what the development roadmap for NFTs looks like, and why PoP MART has achieved such a high level of success despite the lack of content support?

3. The Success Formula of Pudgy Penguins

The success of Pudgy Penguins lies in practicality, practicality, and more practicality. NFTs themselves are difficult to differentiate technically; no matter how cleverly the minting process is designed, what ultimately presents itself is still a JPG image. The real challenge of NFTs lies in the implementation of the IP, which is hundreds of times more difficult compared to creating 10K PFPs. Yuga Labs wants to build a metaverse, Azuki wants to create anime, and while these ideas are cool, these projects with costs often exceeding hundreds of millions will ultimately seek funding support from the community.

In this highly compressed world, impatience is rampant. Everyone is eager for quick success; holders want to make big money, and project teams want to reach the top in one step. Very few blue-chip projects are willing to be grounded, and the more impatient they are, 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 project at a low price.

At this time, Pudgy Penguins encountered the true helmsman, Luca Netz. This practitioner, with years of experience in physical marketing, has brought the little penguins back to their deserved heights. Luca Netz is genuinely building a brand and running a company for NFT holders. From marketing to plush toys to future games, every step of Pudgy Penguins is solid and steady, allowing the company to be profitable and the holders to benefit as well. There is nothing particularly special about it; it is simply doing what should be done. It has been proven that the bottom-up IP model is feasible in Web3, but there are too few project parties willing to lower their stance.

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4. Future Path

The road to success seems simple, but in reality, it is difficult. The next stage of development for PFP must break through some inherent logical frameworks of the cryptocurrency circle. To become the next Disney of Web3 requires significant accumulation. The question of whether the scarcity of NFTs has acted as a counterforce in the process of becoming mainstream has been discussed in previous articles. If NFTs are positioned as trendy consumer products, then a scale of 10K may be too limited; if defined as assets and fundraising methods unique to Web3, then IP ultimately needs to be transformed into tangible consumer products to fulfill promises to the community, rather than a bunch of strange sub-series.

Based on the unique culture of the cryptocurrency community and the attributes of NFTs themselves, a long-term focus on a single IP is also a helpless move. How can we 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.

V. Issuing Tokens: End Point or New Starting Point?

The significance of issuing tokens for NFT projects remains unclear to this day. This practice resembles an exploitation of the lower tiers by the upper tiers, and it also 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, these tokens are all variants of air coins without exception. Their functions usually include staking for on-chain trading dividends, purchasing rights for items in the metaverse, governance rights, and so on. Ideally, it should create a virtuous cycle among holders → stakers → developers. However, the reality is that it resembles a type of air, caught 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 receive a large airdrop during the token generation event )TGE(, so few people complain. However, in the long run, this is indeed a form of dilution, and the distribution method like Azuki's Anime is a blatant plunder.

Short-term popularity is certainly important, but the long-term survival of the project is even more crucial. Do not let the issuance of tokens become the endpoint of the project.

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 characteristics. Four years ago, I regarded it as "Cyber Moutai," but reality has proven it to be more like "Cyber Tulip." Although there are few willing to cultivate in the ruins, I firmly believe that beneath this rubble lies the next Labubu.

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