The future of NFTs: why PFP projects are the new trend
Despite what can be described as a brief period of declining interest, given that cryptocurrency prices have dropped compared to the beginning of this year, the NFT market is bustling. Key actors from the entertainment and music industries, as well as developers of the digital world, are redefining the relationship between creators and consumers thanks to the new opportunities brought by the blockchain.There is one particular trend at the center of this renewed buzz: NFTs used as profile pictures (PFP).
What are PFP NFTs?
PFP NFTs are a generative art form, in fact they are a combination of traits that are automatically generated, resulting in unique outcomes. It all started in 2017 with CryptoPunks from Larva Labs, the quintessential example of PFP.
It must be said that the 10,000 CryptoPunks that make up the collection were never marketed as social media avatars, this happened naturally. For much of its existence, the CryptoPunks project was seen as a novelty without much worth or was simply noticed by everyone except those in the digital and cryptocurrency industries. That all changed in the late 2020s, a period in which CryptoPunks began selling at increasingly higher prices.
The popularity of CryptoPunks has coincided with other developments in the NFT world, bringing more attention to the industry. In October 2020, Dapper Labs launched NBA Top Shot. The product has attracted a larger audience than is usually the case with blockchain applications. In terms of daily trading volume, it quickly rose above $1 million in February 2021. Around the same time, NFTs representing artwork ownership began to draw attention. One of the first ETH investors, Kang, paid more than $777,000 in December 2020 for a work by digital artist Mike Winklemann, known as Beeple. Christie’s auctioned off nine CryptoPunks on May 11 for a grand total of nearly $17 million, reinforcing the position of pixel portraits even more.
At first glance, a PFP of a cute cartoon animal or pixelated character doesn’t look like a big deal. However, with NFT projects finding more and more space in virtual worlds, those looking for the next CryptoPunks have made prices go through the roof. The PFP craze certainly has all the features of a rapidly expanding bubble. However, thanks to the growing use and strengthening of NFT avatar communities, we could witness the rise of an entirely new artistic and social phenomenon.
The first to spark interest in PFP NFTs was JAY-Z, who changed his Twitter profile picture to a CryptoPunk #6095 image in late June, a few weeks before his NFT sale hosted by Sotheby’s auction house.
The Bored Ape Yacht Club
Nowadays, another important role in this field is occupied by the Bored Ape Yacht Club, which has launched hundreds of new NFT collections in recent weeks. Although fans and speculators rush to coin new NFT projects, few achieve success.
The Bored Ape Yacht Club took a different approach than the CryptoPunks in terms of both art style and pricing. BAYC used a fixed price: all members paid 0.08 ETH for their Ape on the primary market. The project launched on April 23 with very little artwork and no finished NFT images. During the first week, about 200 were minted. Then, the remaining 9,800 sold out in about 12 hours.
BAYC quickly found a strong following, especially after influential NFT traders rushed to mint the collection. The average price continued to increase all through July. Before 3AC began purchasing PFP NFTs, it was around $18,320. By August 11, it had surpassed $88,000. With BAYC proving the market’s hunger for more high-value PFP NFTs, several avatar projects saw similar — though less impressive — price increases.
The success of PFP NFTs
CryptoPunks was the first NFT design to be adopted as a social media avatar. Even before the massive sales, for which the collection became famous, showing a Punk as PFP meant having a certain status. The community that forms around such designs is tied to the idea of PFP NFT as a status symbol. Their generative design not only creates scarcity within the set, making some pieces more desirable than others, but also gives the collection a unified look.
Some of the PFP-based projects experiencing great success include the Modz, the G’Evols, the Doge Pound, and the Sup Ducks.
Many projects that came after Larva Labs embraced the idea of a PFP NFT that would serve as a sort of online club membership card. With BAYC, for example, members receive several exclusive benefits, such as the ability to draw on the clubhouse bathroom sketchpad. Also, only proven BAYC holders can join the official Discord server.
Many PFP avatar projects have an even greater vision. Meebits, for example, are 3D characters with a full body, not just a head. Thereby, they can easily serve as avatars in virtual worlds such as Decentraland or The Sandbox. There are more and more efforts to bring the communities formed around PFP NFTs into virtual online social spaces. For example, there is Digimental, working to animate characters from popular collections.
The future of PFP NFTs
Considering the level of speculation in today’s market, it seems likely that many of today’s NFT avatar projects will be gone. However, some of the more innovative projects will surely survive. With virtual worlds like Decentraland and The Sandbox offering new forms of online social and economic interaction, having a digital identity will become more and more important.
Rarecubes believes that PFP NFTs have a great future ahead and that they will become essential to people’s virtual presence in the online world. Having a unique profile image that can only belong to you would avoid the risk of having fake profiles, preventing the problems associated with online identity theft.
Follow us to stay up to date on this topic, because there’s something cooking!