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

1. The Collapse of NFT

The last boom of the NFT market came to a halt with the token issuance of Pudgy Penguins, while Doodles' token issuance on the Solana chain only caused a slight ripple. Yuga Labs continues to streamline its business, this time even involving its most core IP—Cryptopunks. The Bitcoin NFT projects that were once the focus of attention during the last wave of NFT revival are now nearly at zero, and those once-crazy narratives have quietly come to an end, no longer drawing attention.

10,000 PFP once depicted a beautiful vision: a moderately-sized community supporting a bottom-up IP project to go global, which is in stark contrast to the traditional IP project model that involves investing a large amount of money to create content upfront. For example, Disney's Marvel Universe, Star Wars, and various animated characters typically require years of accumulation and massive investment to make these IPs resonate deeply with people, ultimately turning them into profitable gold mines.

NFT is completely different; it has a very low entry threshold, and the creation and assetization of IP is quite fast. Creators only need to pay a small amount of Gas fees to sell their artwork on digital platforms, without the need for galleries, toy companies, film companies, or any professional teams. An IP and a new artist are born.

Three or four years ago, we also witnessed some bottom-up IPs gaining popularity in the top entertainment circles of Europe, America, Japan, and South Korea. Ordinary artists can also achieve a comeback through NFTs. For Generation Z like me, who grew up watching Japanese anime, being able to participate in IP investment and incubation that was once difficult to access through cryptocurrency is an extremely dreamy thing.

However, with the "crazy nesting dolls" of BAYC and the disastrous sub-series Elemental of Azuki being released, the positioning of NFTs has gradually become clearer. They are not a form of equity or investment, but rather more like an expensive luxury item with accompanying membership benefits. The project parties also hope that we will continuously purchase sub-series to support their subsequent sustained investment in building the core value of the IP roadmap. The seeds of contradiction have thus been sown; the project parties are well aware that the cost of content production is high, but without creating content IP, they will lose vitality. Issuing a sub-series every few months continuously drains the enthusiasm of the original series holders and torments every member of the community. Waiting for returns from content may take many years, and this return may never come. The cracks begin to widen, and the beautiful fantasies start to shatter with the decline in floor prices, leaving behind only various controversies.

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

If we see 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 isn't entirely a bad thing, as it can quickly attract buyers based solely on appearance. For example, Azuki's art style aligns well with Asian aesthetics, and under this consensus, this grassroots-made NFT series can follow BAYC to become the third largest blue chip. Similarly, well-known trendy toys in the real world, like Block Bear, Little Yellow Duck, and Molly, also lack content support but have become popular due to their unique appearances.

However, trends are always fleeting, and IPs without content as their core value may become outdated at any time. Limited by the culture of the cryptocurrency circle and the extremely low success rate of NFTs, project parties often continue to derive around an IP. But the reality is that the core hasn't even taken shape, and this trend has already passed.

Of course, there are some types in PFP projects that have sufficient content support, such as Japanese-style NFTs. In the past, I have seen at least four or five projects holding well-known Japanese manga IPs hoping to make a splash in the NFT market, but they seem to have not considered that the fan base of the IP is almost completely incompatible with this circle. Secondly, there are already so many peripheral products related to Japanese anime that it's overwhelming to choose from; why would fans spend hundreds of times the price to purchase a small image? Most importantly, this small image is just an image, and the potential for future empowerment is zero. Even if you purchase a high-grade NFT, you can only gain access to the "SIDE-G" entry of the Gundam metaverse. The profits from Gundam in models, games, and animations have nothing to do with you, and the community will not become a part of IP incubation; you may even be regarded as an outsider within the entire Gundam fan base. In this regard, the pain points of game financialization are actually very similar.

At this point, the PFP project has become a false proposition, and only the pragmatic little penguin is still striving tirelessly. So, does the small image have another way out? I believe PoP MART may provide a different answer.

This small shop that originated in Beijing turned its fortunes around by partnering with Sonny Angel. This single series accounted for nearly 30% of PoP MART's sales at the time. The envious copyright holder reclaimed the exclusive agency rights a year later, but this move instead facilitated the birth of an IP empire.

Wang Ning (founder of PoP MART) had a very simple idea at the 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 its first self-owned trendy toy series - Molly. This little girl with a pouting image instantly became popular nationwide, stimulated by the uncertainty of the blind box gameplay and driven by dopamine. PoP MART began its first phase of rocket-like growth, and by 2019, the annual sales of the single IP Molly had reached 456 million yuan, becoming the core source of revenue for PoP MART at that time.

This model, which combines Japanese gachapon with high-end trendy toys for collaborations, became quite common during the NFT craze in the following years. The basic elements are designed by artists and then combined by the project parties into a series of images for sale and operation. NFTs are generally released in blind box form during the initial phase, where the project parties will release 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 chips have generally failed. So why is PoP MART迎来第二春?

I once attributed the reasons to the difficulties of landing and the high purchasing threshold. The former seems to have no issues at present, while the latter is not the case. NFT also had a period of small projects with free minting, and some projects performed excellently during that time, with creators earning a considerable amount just from transaction commissions. Many NFTs from the inscription era are even more decentralized on this basis, but that does not prevent the decline of NFTs. Forming and joining an IP community is very simple; the challenge lies in how to sustain it.

Therefore, I think we may be making a pattern error. After the rapid growth in the first phase, Molly did not turn PoP MART into a myth either, as the entire company's stock price fell from 2021 all the way down to 2024 just like NFTs. However, PoP MART eventually turned around, 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 (including Labubu), PUCKY, and SATYR RORY, and over 50 non-exclusive co-branded IPs with Harry Potter, Disney, League of Legends, etc.

People's preferences are always fickle, and the lifecycle of an IP is limited. But what if you have hundreds of choices? Today, Labubu is gaining popularity in Europe, America, and Southeast Asia, and the value retention of its surrounding toys can be compared to that of plastic Moutai. The ideals of a well-known project were eventually realized in Web2, and all of this is not a coincidence.

We should rethink what the IP business is, what the development route of NFT is, and why PoP MART can reach such heights without content support?

3. Pudgy Penguins

Last year, I also participated in the little penguin's event in Hong Kong, and this NFT project has always been very enthusiastic towards the community.

The success of Pudgy Penguins lies in being pragmatic, pragmatic, or pragmatic. NFTs themselves are technically difficult to differentiate, no matter how cleverly designed the minting process is, it ultimately comes down to a JPEG image. The challenge facing NFTs is the realization of IP, which is hundreds of times more difficult than creating 10,000 PFPs. Some projects want to build a metaverse, while others want to create anime. These ideas are all cool, but these projects with costs starting in the hundreds of millions will only seek funding support from community members.

This extremely compressed world is too restless, and everyone is eager for quick success. Holders want to make big money, while project teams aim to reach the top in one step. Very few blue-chip projects are willing to lower their stance, and the more impatient they are, the harder they fall. The original team of Pudgy Penguins was also such a restless grassroots team, and after their reputation was damaged, they sold the little penguin project at a low price.

At this time, the little penguin met the true leader Luca Netz, a worker with many years of experience in physical marketing, who brought the little penguin back to its rightful height. Luca Netz is genuinely building a brand; he runs a company for NFT holders. From marketing to plush toys to future games, every step of the little penguin is solid, allowing the company to be profitable and the holders to profit as well. There is nothing particularly special about all this; it is just doing what it is supposed to do. It has been proven that bottom-up IP can exist in Web3, but there are too many project parties unwilling to lower their stature.

Therefore, I am quite averse to the term "falsification", as if certain things should never have existed. Electric vehicles were once very immature, and the voice assistant on my phone was also very clumsy. But this does not prevent new energy vehicles from filling the entire city today, and the development of artificial intelligence goes without saying.

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

4. Development Path

The path to success may seem simple, but in reality, it is fraught with difficulties. The next stage of development for PFP will ultimately require breaking out of some inherent logical frameworks of cryptocurrencies, and accumulating a lot to become the next Web3 version of Disney. I have previously discussed whether the scarcity of NFTs has been counterproductive in the process of becoming mainstream. If defined as trendy consumer goods, then a limit of 10,000 may be too small; if defined as a unique asset and fundraising method in Web3, then IP must ultimately be converted into physical consumer goods to fulfill commitments to the community, rather than a bunch of strange sub-series.

Based on the unique culture of the cryptocurrency space and the attributes of NFTs themselves, it is indeed unfortunate to focus long-term on a single IP. How can we innovate on these PFPs? How can we expand a project into an IP factory? This may require us to accept some new concepts and introduce more technologies and gameplay.

5. Is issuing coins the end?

What is the significance of issuing NFT tokens? I still do not understand. This situation resembles an exploitation of the lower tiers by the upper tiers, and it also dilutes the original value of the NFTs. I can only understand it as this project seeking a convenient way to exit liquidity.

From the tokens of certain well-known projects to those of other projects, without exception, they all seem like variants of air coins. Their empowerment often involves staking to earn some on-chain trading dividends, purchasing items in the virtual world, and governance rights, among others. Ideally, it represents a perfect cycle among holders → stakers → developers. However, in reality, it resembles a kind of air, caught in a vicious cycle of falling NFT prices, declining mining profits, 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. But in the long run, as mentioned earlier, this is a kind of dilution, and the distribution in certain projects, like animations, is an even more obvious form of plunder.

Short-term popularity is important, but the long-term survival of the project is more crucial; do not let issuing coins be the final destination.

Conclusion

In this fast-paced, dopamine-driven era, I