Original Title: "The Final Chapter and Reboot of NFT"

Original Author: Zeke, YBB Capital Researcher

1. The Collapse of NFT

The last call of NFTs ended with the issuance of tokens for Pudgy Penguins, while the recent token release for Doodles only made a small splash on Solana. Yuga Labs' subtraction continues, this time even affecting the most iconic IP, Cryptopunks. Those BitCoin NFTs from the last wave of NFT resurgence are also nearly worthless, and those once-crazy narratives have indeed faded into obscurity, with no one paying attention anymore.

10k PFP The once beautiful vision was a community of just the right size helping a bottom-up IP project to go global, which is completely different from traditional IP projects that first spend money on content support. For example, Disney's Marvel Universe, Star Wars, and various animated characters often require years of accumulation along with countless funds to make these IPs deeply rooted in people's hearts and ultimately become a gold mine.

NFT is completely different, it has a very low barrier to entry, and the speed of shaping an IP and capitalizing it is quite fast. Creators only need to pay some gas to hang their artwork on Opensea and sell, there is no gallery, no toy company, no film company, and no professional team, an IP, a new artist is born. We also witnessed three or four years ago that some bottom-up IPs were popular in the top entertainment circles in Europe, America, Japan and South Korea. A grassroots artist can also rely on NFTs to achieve an amateur counterattack. For me, as a Gen Z who has grown up watching the days go by, it is also a fantastic thing to be able to participate in IP investment and incubation through Crypto, which was once inaccessible to ordinary people.

But later after the release of BAYC's "Mad Matryoshka", Azuki's disastrous sub-series Elemental. The vague status of NFTs is gradually becoming clear, and it is less like an equity or investment, but more like an expensive luxury item with membership benefits. The project team also hopes that we can continue to purchase sub-series to support them to continue to spend money on roadmaps with IP value cores in the future. The seeds of contradiction are planted from here, and the project team knows that it is expensive to make content, but it will die if it does not make content IP. Sub-collections, which are released every few months, continue to suck the blood of OG series holders, torturing everyone in the community, waiting for feedback from the content for years or forever. The cracks began to widen, and those beautiful illusions began to shatter as the floor price fell, and all that remained was all kinds of tearing.

2. The Ace of IP - MCN-PoP MART

If you think of NFTs as a luxury fashion for Gen Z, the causes and failures are clearer. It's not a bad thing to have no content in the fast-food era, after all, the appearance alone can quickly attract buyers, for example, Azuki's art style is quite in line with the Asian aesthetic, and the consensus is that this grassroots-made NFT collection can also become the third largest blue chip after BAYC. In the real world, well-known trendy toys such as Bearbrick, B.Duck, and Molly also have no content support, but they are all popular with their unique appearances.

However, trends are always fleeting; without content as a core value, these IPs may become outdated at any time. Limited by the culture of the cryptocurrency world and the extremely low success rate of NFTs, project teams often keep generating derivatives around a single IP. But the reality is that before the core even takes shape, this trend has already passed.

Of course, there is also a type of PFP project that has sufficient content support, which is Japanese-style NFTs. In the past, I have seen at least four or five projects holding well-known Japanese anime IPs hoping to make a big 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. The second point is that the surrounding merchandise of Japanese anime has long been so abundant that it is difficult to choose, so why would fans spend hundreds of times the price to purchase a small picture? Of course, the most important point is the third one, which is that this small picture can only be a picture, and the future empowerment imagination space is zero. Even if you purchase a Gundam NFT, you can only gain access to the Gundam metaverse "SIDE-G." Wanda's profits from models, games, and animations have nothing to do with you, and the community will not be part of the IP incubation, and in the entire Gundam fan base, it is even considered an outlier. In this regard, the pain points of GameFi are actually very similar.

At this point, the PFP project has become a false proposition, and only the pragmatic spark of the little penguin continues to strive. So, does the small image really have another way out? I believe PoP MART might offer a different answer.

This small cubicle store originating from the Beijing Oumeihui Shopping Center turned its fortunes around by relying on the agent Sonny Angel. This single series alone contributed 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 led to the birth of an IP empire.

Wang Ning (founder of PoP MART) had a very simple idea at that 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 quickly became a nationwide sensation, driven by the excitement of uncertainty in blind box play and dopamine stimulation. 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 PoP MART's core source of income at that time.

This approach, which combines Japanese capsule toys with high-end trendy toys for collaboration, became quite common in the following years of the NFT boom. The basic elements are designed by artists and then handed over to the project team to be combined into a series of images for sale and operation. NFTs are generally released in a blind box format during the initial phase, where the project team releases various rare combinations of images to enhance players' purchasing desire. The only difference is the format of the release, but tens of thousands of NFT projects and various blue-chip ones have generally failed. Yet, PoP MART is now experiencing a second spring, why?

I once attributed the reasons to the difficulties of landing and the high purchase threshold. The former currently poses no issues, while the latter is actually not the case. NFTs also had their Free Mint period, with Goblintown and MIMIC SHHANS being the golden dogs of that era. Creators made a fortune solely from transaction fees, and many NFTs from the inscription era are even more decentralized based on this foundation, but that doesn't stop the decline of NFTs. It's very easy to form or join an IP community; the challenge remains in sustaining it.

So, I think we might be making a mistake in our model. After the first paragraph's rocket-like rise, Molly did not make PoP MART a legend, and the company's stock price fell from 2021 all the way to 2024, just like NFT. However, PoP MART turned around; it relied on an entire 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, and others.

People's preferences are always fickle, and the lifespan of IP is limited, but what if I have hundreds of choices? Nowadays, Labubu is booming in Europe, America, and Southeast Asia, and the value retention of its surrounding dolls is comparable to plastic Maotai. The ideal state of Yuga Labs is ultimately realized in Web2, and all of this is not a coincidence. We should rethink what IP business is, what the roadmap for NFT is, and why PoP MART can achieve such a height without content support?

Three, Pudgy Penguins

I also participated in the Little Penguin Hong Kong event last year, and this NFT project is always so passionate about the community. The success of Pudgy Penguins lies in being pragmatic, pragmatic, and pragmatic. There are no significant technical differences in the NFTs themselves; no matter how cleverly the Mint process is designed, in the end, it’s still a JPG. The difficulty with NFTs lies in the realization of IP, which is hundreds of times more challenging than creating 10K PFPs. Yuga Labs wants to create a Metaverse, and Azuki wants to make anime. OK, that’s all cool, but these projects with costs starting in the hundreds of millions will only ask the community's family members to fork out money.

This extremely compressed world is too impetuous, and everyone wants to rush. The holder wants to make a lot of money, and the project party wants to climb to the sky in one step. Few blue-chip projects are willing to bow their heads, and in the end, the more impatient they are, the worse they fall. And the original team of Pudgy Penguins was also such an impetuous grassroots team, and after Fengping was killed, they sold the little penguins at a low price.

At this time, the little penguin finally met its true owner, Luca Netz, a worker with years of experience in physical marketing, who brought the little penguin back to the height it deserves. Luca Netz is really 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 profit while holders can also profit. There is nothing particularly special about this; it is just doing what it should do. Therefore, it has been proven that bottom-up IP can exist in Web3, but too many project parties are unwilling to lower their status.

So, I really hate the term "falsification," as if certain things should never exist. Electric cars used to be silly, and Siri in my phone was also silly. But that doesn't stop green license plate cars from filling the entire city today, and there's no need to elaborate on AI. Many so-called falsified tracks will still be explored by Web3 in the future, it's just that it lacks a compatible project partner.

Four, Path

The path to success is simple, yet also very difficult. The next stop for PFP will eventually have to break away from some of the inherent logical frameworks of Crypto; to become the next Web3 Disney requires a substantial foundation. Whether the rarity of NFTs has had a counterproductive effect in the process of reaching the mainstream has been discussed in my previous articles. If we define it as a trendy consumer product, then the limitation of 10K might be too great. If we define it as a unique asset and fundraising method in Web3, then the IP must ultimately be converted into physical consumer products to fulfill its promises to the community, rather than just a bunch of strange sub-series.

Given the unique culture of the cryptocurrency world and the attributes of NFTs, it is indeed unfortunate to cling to an IP for a lifetime. How can we further develop these PFPs? How can we expand a project into an IP factory? This may require us to embrace some new concepts and introduce more technologies and gameplay.

5. Is issuing tokens the final stop?

What is the significance of NFT token issuance? I still don’t understand it. This situation seems more like an exploitation of the lower tier by the upper tier, and a dilution of the value of OG NFTs. I can only interpret it as the project seeking a convenient liquidity exit. From APE to DOOD, they are all inevitably variants of air coins. Their empowerment often involves staking to receive some on-chain transaction dividends, purchasing items in the Metaverse, or governance rights. Ideally, it should be a perfect cycle among holders → stakers → developers. But in reality, it resembles a cycle of air, caught in a dead loop of NFT price decline, gold farming revenue decline, and token price decline.

For OG NFT holders, Token has taken away some dividends and interests. However, most of them also receive a large number of airdrops at TGE, so no one complains. But in the long run, as the fourth paragraph suggests, this is a kind of dilution, and distributions like Azuki's Anime are more of a grab. The short-term popularity is important, but the long-term survival of the project is even more important, so don't let the issuance of coins become the last stop.

Conclusion

In this fast-paced, dopamine-driven era, we have witnessed the rise of many emerging Web2 IPs. NFTs should thrive in this environment, as they possess many irreplaceable characteristics. Four years ago, I regarded it as Cyber Moutai, but the reality is Cyber Tulip. Few are willing to manage the ruins, yet I believe there must be another Labubu hidden beneath the rubble.

This article is submitted by a contributor and does not represent the views.

：