The NFT market that continues to be divided: a new pyramid is forming
The NFT market that continues to be divided: a new pyramid is forming
NFT Market
After more than a year of development, the NFT market, a new segment with over $50 billion in transaction volume, has a large enough sample of projects. In order to differentiate the quality of individual NFT projects, the traditional market concept of "blue chip" has been introduced to the NFT market to label the best NFT projects.
In most people's conception, 'blue chip' describes a number of commonalities.
- High Market Cap
- Long life cycle
- Have a large and active user base
- Investors continue to receive returns on their holdings
But for the new and fast-changing NFT market, this label seems too general and vague.
In mid-to-late March, Yuga Labs pulled off a powerful combo that almost single-handedly knocked the bears off their feet. Since then, there has been a quiet divergence among the 'blue chips': BAYC's floor price is back above 100ETH, Azuki keeps setting new all-time highs, while CyberKongz and the land sector have been eclipsed in the frenzy.
The differentiation of each NFT project in terms of its own capability and development direction is dynamic, and the classification of projects by "blue chips" is not only vague but also time-delayed. From the recent differentiation among "blue chips", a clearer hierarchy has emerged, and a new pyramid is being formed: whether "meta-universe ecology" will be at the top of the pyramid, "meta-universe brand" will be second, and the remaining projects will be on their own path of evolution, with some standing out and some falling out...
In this article, Rhythm BlockBeats attempts to re-stratify the "blue chip" segment, looking at what the current pyramid of blue chip projects should look like in terms of operations, marketing and development routes.
"Meta-Universe Ecology" - Yuga Labs, the "ecological builder" and the return of the "infrastructure provider" land board
Yuga Labs has arrived at the top of the new pyramid of the NFT market - the "Meta-Universe Ecology" - and has taken the throne all to itself.
Yuga Labs has shown the market its ambition to build its own metaverse ecosystem. To build something that has never really existed in the market, Yuga Labs not only dared to say it, but also did it in a way that made people believe it.
To build a "metaverse ecosystem", it is necessary to have both a deep enough project portfolio (PFP) and a reliable enough integration platform (land). Land is always just an "infrastructure", just like the iOS/Android ecosystem is just an empty talk if only the technology base provided by Apple/Android is missing countless application development. However, in the initial environment, PFP projects were eagerly looking for new narratives to open up new imagination for investors, and "meta-universe integration" was springing up on the roadmap of each PFP project, while PFP projects themselves lacked sufficient resources to build their own "infrastructure", so land projects with strong resource support such as Sandbox and Decentraland Projects with strong resource support such as Sandbox and Decentraland are more powerful in the two-way run and are widely considered as "ecological builders".
A large number of projects have acquired their own land, but the formation of the "meta-universe ecology" has been very slow.
1. A significant portion of the projects are purchased for marketing purposes only, and the subsequent development progress is slow or even non-existent.
2. The actual interactivity is not strong. The imagination of a PFP is endless, and providing them with only a thematic environment or allowing them to use their PFP as an image in the metaverse to wander around the game map is far from satisfying the need for interactivity.
3. It is difficult to form the connection of projects within the ecosystem. Each PFP has a unique community culture, but it cannot be shown on the meta-universe integration platform with the current low degree of freedom and limited functional landing, and good interaction cannot be formed within the meta-universe integration platform.
In the midst of these existing problems, some land projects are showing investors new possibilities and are emerging as new 'eco-builders'. February's land segment leader, NFT Worlds, is backed by MineCraft, which has the potential to attract a large number of non-Crypto circle users and thus jump out of the circle to compete for volume users, and has a proven SDK and development experience to call upon. There is more room for imagination in terms of the exit circle and interactivity. In addition, many projects based on NFT Worlds have already gained market attention, such as Gray Boys, Property's, The Doge Pound and so on.
These projects are doing more to promote NFT Worlds than NFT Worlds itself. For WorldWideWebb3, the number of projects acquiring land exceeds 50, and more importantly, some of the incoming projects have begun to interact with each other, providing new potential holders.
WorldWideWebb3: A spontaneous "street fight" between projects within the ecosystem
But the NFT market is a magical place after all. From the birth of BAYC to today, just close to 1 year, they have grown from a PFP project to a giant with enough resources to build their own ecology, bringing all the lords of the PFP segment to declare war directly on the land segment.
Yuga Labs, which intends to wrap its PFP with land, has more possibilities to convince the market.
1. strong soldiers, deep ecological project lineup
After swallowing the elephants CryptoPunks and Meebits, and highlighting Cool Cats, World of Women, CrypToadz and Nouns in the "Otherside" promotional video, the number of PFP-based NFT projects that can be labeled as "Yuga Eco" has reached nine. Of these nine projects, all but Nouns have a total market cap of over $100 million. Among the top 12 PFP projects in terms of total market capitalization, "Yuga Eco" projects occupy 8 seats. Azuki, Clone X, Doodles and CyberKongz, which occupy the remaining 4 seats, are on their own.
Heavyweight Yuga Spaceship
On top of that, Yuga Labs' humble stance in respecting the project culture and listening to the community gives enough confidence in their ability to exploit the potential of their various vassals. After acquiring CryptoPunks and Meebits, Yuga Labs did not choose to move quickly, but rather chose to slow down and deepen their understanding of project culture through spontaneous community action. The projects within a meta-universe ecosystem should not be fragmented, but should be seen and drawn to each other for their unique appeal. A deeper understanding and traction can form an effective tandem between projects and make the connection within the ecology stronger.
Yuga Labs is not rushing to do something with CryptoPunks and Meebits, choosing instead to see what their community does first
2. sufficient food and sufficient funds for product development
In March, Yuga Labs closed a $450 million funding round at a $4 billion valuation with a star-studded investment lineup.
A major confusion for investors in the current metaverse integration platform is that what is implemented is just one mini-game after another, which does not give the users the feeling of "metaverse originals". The flow of these mini-games is convergent and less interesting, and cannot reinforce users' social needs for the whole big platform through games. After the novelty of the users has passed, they find that there are only a few things they can do except shopping and enjoying the scenery inside the game. This is not only a technical level problem, but also a problem in the planning of the product form. Having enough money means having enough professional teams to plan and implement the product, so that users can really "settle" in the ecology.
Judging from the total amount of land to be released by Yuga Labs (200,000), they do not want to play closed with a group of PFP circle top streams, but more likely to create an open ecology where numerous PFP projects can move in and create prosperity together. The land board members, who are back to being "infrastructure providers", must strengthen their ties with PFP projects as soon as possible to provide more support for their development and guide the formation of cultural connections within the ecosystem.
Azuki is the first of its kind in the "Geniverse Branding" competition
Under the highest rank of "meta-universe ecology", Azuki's breakout appears to be very dazzling. Since March 17, Azuki's floor price has been hitting all-time highs, peaking at nearly 30ETH, up more than 200%.
Attack of the Azuki
"Azuki has a deep understanding that "meta-universe brands" are not brands that live in the meta-universe, but brands that are born in the meta-universe and are known outside of it, which is often referred to as "out of the circle". Not only "out of the circle", but also to stand firmly outside the circle.
Azuki's vision on the official website
To do this, one must have the following foundation.
1. Unique aesthetics. Aesthetics is one of the value bases of PFP. Different aesthetics will attract potential consumers with different characteristics, and a unique aesthetics can really accumulate "diamond hands".
2. A strong community. Brand nurturing is an ambitious vision that requires holders to "trust the process". Each holder is a billboard, they communicate like friends and create like artists inside the community, and the culture is fleshed out little by little in the process and radiates outward.
3. Mature operation. For many projects, the moment of selling out is the final glory. When the game of hunger marketing is over, the project side becomes a headless fly in the subsequent operation. Physical goods, access to the meta-universe, the provision of free data analysis tools, the opening of offline parties... These operational tools are repeatedly used by countless projects is actually a reflection of the weak operational capacity of most projects - homogeneous content is difficult to precipitate the stock, more unable to attract incremental.
The above three foundations determine the ranking of NFT projects in the brand evolution race. The more solidly they are built, the bigger the hill in the NFT circle will be. The more it becomes the top stream in a circle, the greater the possibility of radiation to the outside of the circle. Among the blue-chip projects under the "meta-universe ecology" ranking, Azuki has squeezed to the front of the race towards brand evolution.
1. unique Asian animation style
Before Azuki, the NFT market had not seen a single blue chip of this style, and Asian NFT players actually lacked an art creation that they were really drawn to. zzzagabond, the head of Azuki, was born in China and has said, "my gut feeling is that they [buyers] are Asian and are seeing art that really resonates with them for the first time. I've talked to Asian investors a few times and they tell me that this is the first NFT they've bought."
In addition, this art style gives the holder a lot of room for imagination and a strong sense of immersion, which is not only good material for secondary creation, but also inspires the holder to continuously create a wild imagination for their own Azuki, laying the foundation for a strong creative community of Azuki.
2. Strong communities
Even before Azuki was released, Twitter was full of secondary creations, and after the release, the enthusiasm for such creations didn't subside because of "liver and white", but continued.
Cosplay of Azuki holders played with flying
On top of the high community activity, the strong consensus of the Azuki community has been on display with the recent airdrop, where Azuki's new NFT series BEANZ was just a pile of dirt when the drop box was opened, yet almost no Azuki holders thought it would just be a pile of dirt, with pending orders consistently under a horrible 350. Without a consensus base, whatever is dropped is probably only worth a real pile of dirt in the real world, but with a strong consensus, selling out will only make the holders think more.
The historical trend of BEANZ's market pending orders shows the confidence of Azuki holders in the "pile of dirt"
3. textbook operation
Some project owners are afraid of hurting the consensus by "over-promising", so they fall into the dilemma of "the wine is too good to be true". Azuki, on the other hand, has got it just right.
First of all, they gave a big vision - "Web3 Tide", a vision that was made clear at the beginning so that holders could both understand the direction of the project and leave enough room for the holders' imagination.
Second, they show reassuring care in details, such as their attitude towards game development: the
We know it's hard, but we're capable of doing it. We'll do it and we'll do it right
In addition to online activities such as art creation, they also held offline theme parties. Not only did they invite big names like Wiz Khalifa, but they also announced the airdrop on the spot. The moment they opened their wallets at the party to check out the drop, the interplay between Web3 and reality directly filled the participants with a sense of experience.
The race to evolve brands is heating up. The projects that have the potential to evolve into brands have their own logic that the market is betting on: Clone X is a 3D PFP leader, and its project RTFKT Studio, a leader in virtual sneakers, was acquired by Nike last December. Doodles recently brought itself to SXSW, exploring new paths for both 2D and 3D expression through Space Doodles. The mfers, who have already had a number of spontaneous offline community events, will bring DAO offline...
Ambitious projects are also exploring ways to expand their reach, especially offline, and Karafuru held an offline themed exhibition at the end of March that attracted over 200,000 people in 10 days. Shortly after NFT LA, a number of projects went offline to preach. These are all new ideas - theme parties, art shows, sporting events and other offline events gather a large number of people with different interests, could it be a new idea to move to the forefront of the brand evolution race by using their interests as an entry point to get more people attracted to virtual small pictures from the real world? The ambitious PFP project is racing to "connect Web2 and Web3".
Karafuru's offline themed exhibition is a success
The Falling 'Appist'
Amidst this wave of headline PFP frenzy, one headline blue-chip project has been a major disappointment: CyberKongz.
CyberKongz Continues Downside Amid Yuga Labs-Induced Headline PFP Surge
At a time when PFP was first caught up in the traditional scoreboard of art style, identity, social attributes, etc., CyberKongz managed to break through and establish itself by releasing its own Token BANANA and empowering it with breeding and name changes.
Compared to the other head PFP blue chips, CyberKongz is like a parochial student, overshadowed by the other head PFP blue chips in terms of art style, community culture and operations. While they do keep exploring the meta-universe - the Sandbox plot development, the purchase of Worldwide Webb3's Penthouse... the main focus, in terms of the results of their work, is on refining the economic mechanisms within their own projects. This is the path to their success, but sometimes failures come from past successes, and the future of CyberKongz, the pioneer of the "app school", is becoming less and less imaginable.
1. CyberKongz is getting DeFi
CyberKongz actually has three series, Genesis CyberKongz, Baby CyberKongz and CyberKongz VX. These three series are like three different levels of miners: Genesis CyberKongz is the most premium miner and has the highest floor price, staying in the 50-70 ETH range and earning 10 BANANA per day. The floor price of Baby CyberKongz is currently around 4ETH, and you can get 10 SHARDZ per day, which are not tradable and are used for casting gain items in their game Play 2 Kollect. CyberKongz VX is currently at a floor price of 1.1 ETH, and can be used as a character model in Sandbox, and as an entry ticket to Play 2 Kollect. Participating in Play 2 Kollect is the only way for Baby CyberKongz and CyberKongz VX holders to earn BANANA, and the more points you get in the game, the more BANANA you can get.
The project owner seems to want to attract more potential holders by lowering the cost of entry, which is very different from the development idea of "metaverse ecology" and "metaverse brand". This may not be the project owner's intention, but it will inevitably make the first reaction of more potential holders to consider buying "calculate the payback period".
2. BANANA application is weak, confined within the project and strongly tied to the project value
In the beginning, BANANA's most important application was to breed Baby CyberKongz. With the end of the Baby CyberKongz breeding and the delay in the implementation of the BANANA SHOP (a store for buying wearable gear in Sandbox), BANANA was for some time only used to rename its monkeys, write autobiographies and secondary market trading.
To solve this problem, CyberKongz launched the KONGZ TANK program to drive new projects to the ground through community voting and team screening, and to circulate BANANA among these new projects. So far, the KONGZ TANK program has successfully incubated two projects, The Littles and ZenApe. But the problem remains the same: besides reproduction, applications such as name change, autobiography writing, feature modification, etc. are not enough to consume BANANA, and the holders prefer to dump BANANA in the secondary market for cash rather than taking it for DIY madness.
The launch of the Play 2 Kollect game added a new way for BANANA to be consumed, but its use remained limited within its program. The project must find ways to maintain the value of BANANA and avoid the backlash of its collapse on its NFT.
Yuga Labs' combination has siphoned off a lot of money from the land sector in the short term, but it has given the land sector a clearer idea of what it should do to meet the market's demand for a "meta-universe ecology", and since the products in the land sector are all different and have different forms, there is still a lot of room for these "appists" in the long run. But for the CyberKongz-led PFP "app faction", it's hard to break through by focusing on DeFi-like play, and it's time to consider making changes to change the market's interest in them from investment to consumption.
Concluding remarks
A new pyramid is forming in the NFT market, and "blue chip" is too general as a label for project ranking. At the top of the pyramid, the Yuga line of "meta-universe ecology" stands alone. At the bottom of the pyramid, the Yuga line of "meta-universe brands" is alone, and at the "meta-universe brand" level, while no notable project has yet established a foothold here, there are promising projects that are making headway.
The new tier is ultimately the result of a divergence in operations, marketing and development paths, and it will become increasingly important to provide a diverse experience for holders. Truly captivating NFT projects will continue to widen the gap from ordinary projects and bring more real consumers to the market as the metaverse evolves, completing the true maturation from speculative to consumer transformation.
In the ever-changing NFT market, will new projects emerge with new development ideas to recast the pyramid? For example, the recent explosion of the concept of "cross-chain", we can expect new forms of applications for PFPs such as Gh0stly Gh0sts, tiny dinos, etc., and "infrastructure provider" land projects must also be fist-pumping on cross-chain integration.
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