2021 is the first year of NFT. The NFT market reached a peak of US$4.8 billion in trading volume in early 2022. In June of this year, there was a cliff-like decline, and the monthly trading volume of Opensea was only US$690 million. Whether it is NFT players' feedback from the community or analysts' analysis of data on the chain, they all say that the NFT winter is approaching. By referring to the number of NFTs sold by NFTs on opensea every month, the total monthly transaction frequency of the NFT market after March has not changed to the same extent as the transaction volume has shrunk.
Reasons for the shrinking transaction volume:
A large part of the shrinkage of transaction volume is affected by external factors. For example, the withdrawal of liquidity at the macro level and the more intuitive drop in ETH prices. The entire crypto market is going through a bear market, with many assets falling by varying degrees. Just looking at the NFT market alone, blue chips cannot survive the bear market. BAYC fell by about 50%, and Azuki, Clonx, and Coolcats all fell by more than 60%. Learn IT entrepreneurship projects with stable income✢ \ / : CszCsdn
Another part of the reason for the shrinking of NFT's overall transaction volume is that NFT players are no longer paying for the community's narrative, and they are not optimistic about the community's subsequent future development. This period really tests the player's ability to investigate the project. Some projects are directly rug when they go online, some are blatant "cloned sheep" that imitate hot projects and run away after cutting them, and some are infinitely delaying the progress on the roadmap. They seem to be doing things every day but never deliver results. The three characteristics of Freemint are very innocent during this period. I don’t want you to pay for mint, but I also have no roadmap, no discord, no practicality, and all rely on finding value in price increases. The empty glove golden dog has become the best narrative in the freemint community.
In fact, looking back at the frequency of transactions, it is not difficult to find that it is not that everyone has reduced their enthusiasm for collecting, trading, or even speculating on NFTs, but that fewer people in the market are willing to buy and collect some "junk pictures" with real money.
Existing solutions on the market:
1. Expand the community and attract new users to join
1.1 PFP project issues ERC20
APE token is the governance token of the blue-chip big brother BAYC and the native token in the ape universe. The most notable feature of blue chips is that the price is high, the consensus is strong, and there are many diamond hands. On the one hand, the high floor price is a shot in the arm to stabilize the community, and on the other hand, it limits the liquidity of NFT. The floor price of 75ETH has become a threshold, not every player can buy BAYC's NFT. Due to the fixed total amount of NFT issuance, 8888 monkeys can no longer accommodate the user base that Yuga labs should have with a valuation of 4.4 billion. The issuance of ERC20 tokens effectively realizes the means of expanding the community.
Long-term holders of BAYC received airdrops of mutating potions, dogs, land, and APE tokens via HODL. The dividends generated by the airdrop essentially still require new funds to pay for it, thereby promoting the increase of each NFT. In the case of a bear market, the airdrop method is unsustainable. Taking otherside's land as an example, its profit-making effect has been greatly reduced. Unlike ERC20 tokens, ERC20 has a simpler and rougher consensus and stronger liquidity than NFT. At present, the community voting of BAYC on snapshot is mainly through APE for governance voting, and the utility of NFT is gradually returning to the sense of self-identity of the community.
1.2 Problems in NFT project airdrop ERC20:
Over time, NFT holders and FT holders have a sense of separation and fragmentation. Recently, Paradigm has proposed a progressive Dutch auction and a new token issuance mechanism for GOO in response to this phenomenon. Art Gobblers is an on-chain experimental PFP project using the above two mechanisms. To put it simply, it is to maximize the output of tokens by adjusting the ratio of NFT and the number of tokens to ensure that users holding tokens and NFTs are a community of interests. Although Paradigm proposes an innovation in the token issuance mechanism and explores the positive cycle of NFT's internal economy, this should be a self-playing game for users on the chain.
1.3 Fragmented NFT of the NFT project party
Bobu is a decentralized IP governance experiment officially launched by Azuki. Decentralized IP management is implemented through the ERC1155 protocol, so that more people can participate in the azuki ecosystem and realize the vision of universal governance.
2. Narrative and gameplay
2.1 Games
After the concept of P2E exploded last year, many PFP projects have added a line to their roadmap that they will make a game based on PFP in the future. Many projects use the different traits of each NFT to create the combat value of the corresponding character for PVP or PVE gameplay. For example, the P2E placement game based on Ethereum developed by raidparty. Players need to pledge NFT and break through the dungeon to get $CFTI token rewards. Whether it is from the burning design of heroes and warriors or the gameplay of changing combat values through tokens, raidparty was an anti-inflation and quite game-playing chain game at that time. In fact, the most well-known name of raidparty should be delayparty. Warrior has been out of mint for several weeks, and the game's launch plan has been postponed again and again. The full mood of the community was exhausted in the endless delay.
The narrative of the game cannot satisfy the vast majority of NFT holders, and maintaining the enthusiasm of the community is the job that a PFP should do. There were also many projects that pursued hot spots during that period and made simple 3v3 NFT battle games. However, the simple and rough gameplay and uncontrolled token output were far below the expectations of community members for the game, which accelerated the development of the community. The collapse of consensus and panic brought about a downward spiral.
2.2 IP commercialization
Every successful IP needs a good story behind it. Disney builds itself into a brand company that is happy for everyone and continues to grow and subdivide the layout of its industrial chain. By imitating and learning from Disney, the NFT community can explore in the direction of licensing IP to commodity consumer products. The earliest combination of NFT and business was to exchange NFT for socks in unisock, deposit NFT for sake, but these were all one-shot deals and could not expand the community. The new model may need to be co-created by the community. cc0's NFT project nounsDAO created its own coffee brand and donated the profits to Ukrainian refugees through community voting.
BAYC portrays to the community the retirement life of a middle-class retiree who takes his dog to Miami to buy a yacht and fish. BAYC's IP authorization ranges from web2 to web3, from music, fashion, toys to education.
IP is essentially a dissemination of cultural concepts, and people implant classic memes into various scenes of life. The progress of the NFT project towards IP commercialization has given community members greater confidence. Investing in NFT is no longer buying small junk pictures but buying original shares of the future business empire.
2.3 Substantial function exploration
Getting traffic and funds to web2 outside of the crypto world has become the means by which many NFT projects scale. Changes in the process of flipping by community members drove an influx of more new NFT players. Bilibili made cheersup and entered Opensea shouting the slogan that it is worth cheering to meet friends. Their NFT is brewed to obtain points exchange-related rights, such as Bilibili's big members, endowing NFT with intuitive and usable intrinsic value.
2.4 Establish positive externalities while introducing funds and users from Web2
Tengoku's 3D-NFT is used to redeem virtual human customization services. NFT holders need mint to participate in the incubation game on the same day. After the game is over, the original Mint 2D PFP NFT will be converted into a 3D virtual human NFT, and the complete source file download of the 3D virtual human will be obtained at the same time. Through the game competition of the in-game mechanism, the first 2,000 3D virtual humans will be hatched, and these 2,000 3D virtual humans will become Genesis 3D virtual humans, which are higher than the other 3,555 ordinary 3D virtual humans in all rights and interests in the later stage.
Source files are the most important path to commercialization of the project. At present, the traffic of accounts with avatars as the protagonists on various short video platforms is rapidly increasing. Many content creators are eager to use avatars to obtain ultra-high traffic like Liu Yexi, so as to capture more brand advertising opportunities and live broadcast opportunities. NFT holders can capture facial expressions and movements through the front camera of the mobile phone, and input them into the source file to generate an exclusive virtual human video, which is used to replace the real person as the protagonist in the video or live broadcast process.
NFT holders purchase shuttle services by paying tokens to generate virtual human images and provide them to creators of video and live broadcast platforms. Creators of video and live broadcast content use virtual humans as differentiated positioning of content services, and actively distribute traffic through short video platforms And the audience's novelty-seeking psychology, at a purchase cost far lower than normal traffic, get more attention users and video playback volume. Because of the high traffic cost and content homogeneity on the video platform, you can pass the cost of less than a thousand RMB (0.1E) Tengoku high-fidelity 3D virtual human to solve the problem. There is a huge cost-benefit gap between the two markets, which will inevitably drive a large number of creators of various video platforms to seek Tengoku's 3D virtual human image Shuttle service.
The inflow of external funds becomes the motivation for players to incubate more virtual people and purchase and use governance tokens. It is equivalent to the NFT holder becoming the "landlord" of the image and the middleman of the industrialization of virtual people. Content creators who purchase avatar images do not need to bear the high development costs of avatars, and brands can also use Tengoku's 3D avatars as their brand spokespersons. It can reduce the risk of negative news brought by the use of artists, and there is enough time to cooperate with the brand side to shoot videos, print advertisements, participate in various programs, and become the protagonist of live broadcasts. Fengchao, and Tengoku has a total of 5,555 3D virtual people, which can meet enough brand-related needs. NFT holders enjoy the substantial functions and potential benefits brought by NFT, and the application value of this NFT will also bring long-term holding confidence to NFT holders.
Summarize
It’s not just the image NFT projects that need to find new narrative gameplay and expand users when they are cold. The entire encryption market is looking for new concepts in the bear market to detonate the next wave of bull market. It may be developing in the direction of financialization. The newly established decentralized trading market, NFT derivatives market and structured products promote the liquidity of NFT. It may be that it develops in the direction of film and television game IP to form the cultural communication and precipitation of various communities. It may also be NFT as a component of the Metaverse, subscription service, ticketing, and proof of stake. New projects are emerging one after another, keep thinking about NFT, and find the hot spot for the next user to buy-in.