The Final Chapter and Renewal of NFTs: How Token Issuance Changed the PFP Landscape

I. The Transformation of the NFT Market

Pudgy Penguins changed everything. Their token issuance marked a pivotal moment in the PFP world. Doodles followed with barely a ripple on Solana. Even Yuga Labs is repositioning, affecting Cryptopunks. Those once-hot Bitcoin NFTs? Mostly worthless now. Nobody cares about PFP narratives anymore.

The 10k PFP dream was beautiful, really. Small communities backing grassroots IP to reach global audiences. No massive upfront investment needed. Disney spends years and millions developing IPs. NFTs flipped this model entirely.

The barriers were so low. Just pay gas fees. List on marketplaces. Done. No galleries needed. No toy manufacturers. No production companies. Instant IP creation. We saw several grassroots projects break into major entertainment circles. For Gen Z anime fans, this was kind of revolutionary - investing in IP creation! That used to be just for industry insiders.

But things got messy after BAYC's expansion and Azuki's problematic Elemental drop. NFTs weren't really equity. More like expensive luxury items with perks. Yet teams kept expecting communities to fund development by buying sub-series. This contradiction feels fundamental. Teams know content creation costs money, but they keep releasing collections that drain original holders. Communities waited for content that might take years. Or never appear at all. Floor prices crashed. Dreams shattered. Conflicts erupted.

II. Learning from Physical World Success - PoP MART

Seeing NFTs as Gen Z luxury collectibles makes their appeal clearer. In today's fast-consumption world, maybe content isn't everything? Visual appeal matters. Azuki resonated with Asian aesthetics. It became the third-largest blue chip. Look at Bearbrick and Molly - hugely popular with minimal story backing.

Trends fade though. Without core value from actual content, IPs get outdated fast. Crypto culture pushed project teams to keep iterating around initial IPs. Without solid foundations, these trends just... vanish.

Japanese-style NFT projects seemed promising. They had content backing! But they missed something big. Anime fans aren't necessarily crypto collectors. And regular anime merch is everywhere. It's cheap. Why buy expensive digital images? Most importantly, these NFTs offered little real empowerment. No stake in IP development. No revenue sharing.

The PFP concept seems played out now. Only pragmatic projects like Pudgy Penguins survive. For alternative approaches? PoP MART shows the way.

This Beijing retailer transformed after representing Sonny Angel. When they lost those rights, founder Wang Ning developed their own IPs. They created Molly with designer Wang Xinming in 2016. It exploded through the blind box model. By 2019, Molly generated 456 million yuan annually.

It's not unlike the NFT strategy. Artists design elements. Elements become series. Series get sold. Both struggled with sustained success. But PoP MART found growth through diversification. They now have 12 proprietary IPs, 25 exclusive licensed IPs, and over 50 collaborations.

This strategy acknowledges something important. Consumer preferences change. Individual IPs have limited lifespans. With hundreds of options, PoP MART stays relevant as collections rise and fall. Web2 companies accomplished what many NFT projects dreamed of. Makes you wonder about our fundamental approach to digital IP development.

III. The Pudgy Penguins Approach

I attended a Pudgy Penguins event recently. The community's still enthusiastic. Their secret? Pragmatism. NFTs themselves aren't technologically special. They're just digital images. The real challenge is IP realization. That's exponentially harder than making 10,000 PFPs.

Yuga Labs and Azuki announced grand metaverses and anime productions. These require massive investment. Community members end up paying.

Crypto markets move fast. Holders want quick profits. Teams want immediate success. Few blue-chips demonstrate patience. This leads to spectacular failures. The original Pudgy team followed this pattern before selling at a discount.

Enter Luca Netz. Physical marketing experience. He approaches the project as genuine brand building. His company benefits both NFT holders and the business itself. From marketing to plush toys to game development. Each step deliberate. Substantive. This shows bottom-up IP development can work in Web3 when teams prioritize execution over narratives.

It seems dismissing certain approaches as "falsification" might be shortsighted. Electric vehicles, voice assistants - they all evolved from rudimentary beginnings. Many paths currently dismissed in Web3 might succeed with proper execution.

IV. Future Directions

We need to move beyond crypto's frameworks. Building the next Web3 Disney requires significant asset accumulation. Is NFT scarcity hindering mass adoption? If they're collectible consumer goods, maybe 10,000 pieces is too many. If they're unique assets for fundraising, IP must eventually become physical products. Not endless derivative collections.

Crypto culture is unique. NFT properties are special. Building sustainable value needs new approaches. We should consider extracting more value from PFPs. Expand projects into IP factories through innovative technologies and engagement.

Is token issuance the ultimate destination? Not entirely clear. Often feels like upper tiers exploiting lower tiers while diluting original NFT value. APE, DOOD - these function like standard cryptocurrencies. Limited unique utility beyond staking, metaverse purchases, or governance rights. The theoretical cycle between holders, stakers, and developers? In reality, often a death spiral. Declining NFT prices. Reduced mining income. Falling token values.

Original holders get substantial airdrops at token generation. This minimizes immediate complaints. But long-term dilution of rights and dividends is a form of value extraction. Some approaches seem like outright appropriation of community value. Short-term excitement matters. Long-term sustainability requires tokens to enhance projects, not terminate them.

Conclusion

In our dopamine-driven era, Web2 has produced numerous successful emerging IPs. NFTs should have thrived. Many viewed them as digital blue-chip investments. Most followed tulip-mania patterns instead. Despite widespread abandonment, beneath the ruins lies potential. For those willing to build methodically and pragmatically.