The Final Chapter and Reboot of NFT

NFT once carried the dream of IP equality and community co-construction, but gradually fell silent amid empty narratives and capital Arbitrage.

Written by: YBB Capital Researcher Zeke

1. The Ruin of NFT

The final cry of NFTs ends with the token issuance of Pudgy Penguins, while the recent token launch of Doodles on Solana has only made a few ripples. Yuga Labs' subtraction continues, this time even involving its most soulful IP, Cryptopunks. The BitCoin NFTs from the last wave of NFT revival are nearly at zero, and those once-crazy narratives have indeed fallen into desolation, no longer attracting any attention.

10k PFP The vision was once beautiful, 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 used to spend money to support content. For example, the Marvel Universe, Star Wars, and various animated characters under Disney 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.

In contrast, NFTs are completely different; they have a very low barrier to entry, and the speed at which an IP is created and IP is assetized is quite fast. Creators only need to pay some Gas to list their artworks for sale on Opensea, without galleries, toy companies, movie studios, or any professional teams—an IP and a new artist are born.

We witnessed, three to four years ago, how some grassroots IPs became popular in the top entertainment circles of Europe, America, Japan, and South Korea. A grassroots artist can also achieve a turnaround through NFT. For me, as a member of Generation Z who grew up watching Japanese anime, being able to participate in IP investment and incubation that ordinary people could not access before through Crypto is also quite a dreamy thing.

But later, after the "crazy trap" of BAYC and the disastrous sub-series Elemental of Azuki were released, the status of NFT gradually became clearer. It no longer resembles a form of equity or investment; instead, it feels more like an expensive luxury item with membership benefits. The project team also hopes that we will continue to purchase sub-series to support their ongoing spending on the Roadmap for the core value of IP. The seed of contradiction was sown here; the project team knows that creating content is expensive, but without content, the IP will die. The sub-series released every few months continues to drain the OG series holders, tormenting everyone in the community, waiting for feedback from content that may take many years to arrive, or perhaps that feedback will never come. The cracks continue to widen, and those beautiful illusions begin to shatter as the floor price drops, leaving only various conflicts.

2. The Ace of IP - MCN-PoP MART

If we consider NFTs as luxury trendy toys for Generation Z, their causes of success and failure become clearer. In the fast-food era, lacking content is not necessarily a bad thing, as the appearance alone can quickly attract buyers. 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. In the real world, well-known trendy toys like Bearbrick, B.Duck, and Molly also lack content support, yet they became wildly popular solely based on their unique appearances.

However, the trend is always a gust of wind, and without content as the core of value, these IPs can become obsolete at any time. Limited by the culture of the cryptocurrency circle and the ultra-low success rate of NFT, project parties often continue to derive around an IP. But the reality is that the kernel has not yet made a prototype, and this gust of wind has passed.

Of course, there is also a type of PFP project that is supported by sufficient content, Japanese-style NFTs. In the past, I have seen at least four or five projects with well-known Japanese comic IPs hoping to make a big splash in the NFT market, but they don't seem to have thought that the fan base of the IP is almost completely incompatible with this circle, and the second point is that there are too many Japanese anime peripherals to choose from, why should fans pay hundreds of times the price to buy a small picture? Of course, the most important thing is the third point, this small picture can only be a picture, and the imagination space for future empowerment is 0. Even if you purchase a Gundam NFT, you will only be able to access the Gundam Metaverse "SIDE-G". Wanda's profits from models, games, and animations naturally have nothing to do with you, and the community will not be a member of the IP incubation, and the entire Gundam fan base will even be considered an outlier. At this point, GameFi's pain points are actually very similar.

At this point, the PFP project has become a false proposition, and only the pragmatic spark of Little Penguin is still making continuous efforts. So, does the small image really have another way out? I believe PoP MART may offer an alternative answer.

This small square store originating from Beijing's OUMEIHUI Shopping Center turned around thanks to the agent Sonny Angel. This single series 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 the first self-owned trendy toy series—Molly. This little girl with a pouting image quickly became a nationwide sensation, driven by the uncertainty of the blind box play and the dopamine rush. PoP MART began its first phase of rocket-like rise, and by 2019, the annual sales of the single IP Molly reached 456 million yuan, becoming the core source of income for PoP MART at that time.

This approach, which combines Japanese gacha with high-end trendy toys for collaborations, became quite common during the NFT craze in the following years. Basic elements designed by artists are then handed over to the project team to be combined into a series of images for sale and operation. NFTs are generally released in blind box form during the launch phase, where the project team will release various rare combinations of images to enhance players' purchasing desire.

The two are only different in the form of the offering, but tens of thousands of NFT projects with various blue chips have generally failed. And PoP MART is now ushering in its second spring, why?

I once attributed the reasons to the difficulties of landing and the high purchase threshold. The former has no issues from the current perspective, while the latter is not entirely true; NFTs also had their Free Mint period with meme coins, where Goblintown and MIMIC SHHANS were the golden dogs of that time. Creators earned substantial profits solely from trading commissions. Many NFTs from the inscription era have an even more thorough level of decentralization based on this, but this does not stop the decline of NFTs. Forming or joining an IP community is very simple, but the challenge lies in its continuation.

So, I think we might have the wrong model. After the initial rocket-like rise, Molly did not make PoP MART a legendary success; the company's stock price has dropped from 2021 to 2024 just like NFTs. However, PoP MART has turned around, relying on a whole wall of IPs. Currently, 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 more than 50 non-exclusive co-branded IPs such as Harry Potter, Disney, and League of Legends.

People's preferences are always fickle, and the life of an 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 an IP business is, what the roadmap for NFT is, and why PoP MART can achieve such height without content support.

3. Pudgy Penguins

I also participated in the Little Penguin Hong Kong event last year, and this NFT project is always so enthusiastic towards the community.

The success of Pudgy Penguins lies in pragmatism, pragmatism, and more pragmatism. There is no technical distinction in the NFT itself, no matter how cleverly designed the Mint process is, it ultimately results in a JPG. The difficulty of NFTs lies in the implementation of IP, which is hundreds of times more challenging than creating 10K PFPs. Yuga Labs wants to create a Metaverse, and Azuki wants to create anime. OK, that's all very cool, but for these projects that start with costs in the hundreds of millions, they will only ask the community members to shell out money.

This extremely compressed world is too restless, and everyone wants to achieve success quickly. Holders want to make big money, and project teams want to reach the top in one step. Few blue-chip projects are willing to bow down, and in the end, the more impatient they are, the worse they fall. The original team of Pudgy Penguins was once such a restless grassroots team, and after suffering from bad reviews, 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 should be at. Luca Netz is really building a brand; he operates a company for NFT holders. From marketing to plush toys to future games, every step of the little penguin is solid, the company can make a profit, and the holders can also benefit. There is nothing particularly special about this; it is just doing what it is supposed to do. Thus, it has been proven that bottom-up IP can exist in Web3, but there are too many project parties that cannot lower their stance.

So, I really hate the term "falsifiability," as if certain things should never exist. Electric cars used to be silly, and Siri on my phone was also silly. But that doesn't prevent green license plate cars from filling the entire city now, and there's no need to say much more about AI.

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

Four, Path

The path to success is simple, yet very difficult. The next stop for PFP will eventually have to break out of some of the inherent logical frameworks of Crypto; becoming the next Web3 Disney will require substantial accumulation. Whether the scarcity of NFT has been counterproductive in the process of reaching the masses is something I have discussed in my previous articles. If it is defined as trendy consumer goods, then the limitation of 10K may be too great. If it is defined as a type of asset and fundraising method unique to Web3, then IP ultimately needs to be converted into tangible consumer goods to fulfill its promise to the community, rather than a bunch of strange sub-series.

Given the unique culture of the cryptocurrency world and the attributes of NFTs themselves, it is indeed helpless to hold onto an IP and gnaw on it for life. How can we make further developments on 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 issuing tokens for NFTs? I still don't understand. This situation seems more like an exploitation of the lower tier by those in a higher position, and it also dilutes the value of OG NFTs. I can only interpret it as this project looking for a convenient way to exit its liquidity.

From APE to DOOD, without exception, they all seem like variants of air coins. Their empowerment often involves earning some on-chain trading dividends through staking, purchasing items in the Metaverse, and governance rights. Ideally, it represents a perfect cycle among holders → stakers → developers. But in reality, it resembles a kind of air, caught in a dead cycle involving NFT price declines, gold mining profit declines, and token price declines.

For OG NFT holders, although the Token has taken away some dividends and rights, most of them will receive a large airdrop during the TGE, so no one complains. However, in the long run, as stated in the fourth paragraph, this is a form of dilution, and the distribution like Azuki's Anime is even more of a blatant robbery.

Short-term hype is important, but the long-term survival of the project is more important; don't let issuing tokens be the final stop.

Conclusion

In this fast-paced, dopamine-driven era, we have witnessed the rise of many emerging Web2 IPs, and NFTs should thrive in this age 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 tend to the ruins, but I believe that beneath the ruins lies the next Labubu.