Recently, Avatar-like NFT projects represented by CryptoPunks have been particularly popular, with the average transaction price even reaching hundreds of thousands of dollars.
Coingecko analyst Benjamin Hor wrote an article on the recent trend like CryptoPunks, Bored Ape Yacht Club, Pudgy Penguins and other typical projects and the reasons behind them and examined why they can become a new cultural paradigm.
People have always compared the past few weeks to DeFi Summer 2020. In addition, NFT is a new hotspot. We have seen explosive growth in many projects in the NFT space. In the beginning, Axie Infinity led the play-to-earn revolution. This is followed by a series of NFT Avatars art (sometimes affectionately / maliciously called JPEG) that echoes the iconic avatar-based style of CryptoPunk.
You may be wondering: what happened here? Are People Really Spending Thousands of Dollars on Profile Pictures (PFP)? Well, when you talk about CryptoPunks (punks) it is not very specific. People spend millions of dollars.
The top two auctions took place in March 2021 and sold for up to $ 7.6 million each, but many other punks were bought for millions of dollars last month – that doesn’t even include the June 2021 punk a public auction for $ 11.8 million. The question then is why are people investing life changing money in JPEG?
Answering this question is not easy as it covers many different areas. We can try to sort out something that works, but pretending we have all the answers is a delusion at best. Instead, we will try to share our observations, be it as observers or as active participants.
We will first record the journey of three projects: CryptoPunks, Bored Ape Yacht Club and Pudgy Penguins. Then we will discuss the cultural implications of these cryptocurrency projects. Finally, we’ll examine why they caught on and what they mean for this new digital age.
Punk has a long and glorious history. In 2017, co-creators John Watkinson and Matt Hall released 10,000 punks, all of which were generated by the program and received for free (recipients only need to pay a small casting fee).
According to the planning elements of the creator, the features are randomized and compiled via the generator. Various features are like bamboo shoots shot out of the ground after a rain, some are rarer than others. Some are aliens (only 9 such punks) and monkeys (only 24 such punks), and most are common humanoids.
Despite being one of the earliest NFT projects on Ethereum (even months before CryptoKitties), there is almost no activity. According to Hall, fewer than 30 punk people were claimed within a few days of its release. As time went on, more and more people began to understand this project, especially the items from Mashable, and all of the punks were eventually evicted.
The community is small but full of enthusiasm. However, punk owners have slowly but surely become status symbols. Provenance always brings value to any collectors’ market, and blockchain technology is no exception. Take punk to get two things across: you are either an NFT / Ethereum OG (veteran) or you are part of history. The owners realized the social status associated with it and started changing their profile pictures to punk on social media platforms (like Twitter, Discord, etc.).
Fast forward a few years and punk is still flying under the radar. At the same time, the NFT hype is already picking up speed in 2020. Virtual worlds like Decentraland and The Sandbox (often referred to as Metaverses) have increased the focus on NFT. However, the real catalyst came with the launch of the Top Shot NFT market in October 2020.
Top Shot is a joint project between Dapper Labs (the team behind CryptoKitties) and the NBA. The basketball game video collection packaged in collectible “moments” is a product and has seen great demand. Officially authorized by the NBA, the NFT has received great recognition and was the first successful participation of a sports organization in the NFT.
As the NFT hype grew, we’ve seen a lot of sales of other artistic NFTs. Sotheby’s, a top auction house founded in 1744, legitimized the move by auctioning NFT artworks, including Beeple’s historic $ 69 million auction. Although the indigenous people of the cryptocurrency have started increasing their holdings, real attention turns to punk when celebrities, venture capitalists, and business people join the hype.
That is why there are users who do everything in their power to get a blue tick next to their name on Twitter, for example, which identifies them as a verified user. There is phone calls and contacts are tried, everything, just for a small distinguishing feature that says: “Look at me, I’m better than the rest!” Most other social media portals now also have badges, buttons or other optical markers that people can use to prove their exclusive status.
This initial situation explains well why a volatile trade in so-called NFT avatars has started in recent months. As a reminder, NFTs are certificates of authenticity for digital files. What could be copied any number of times and was therefore a priori without value, is now becoming a valuable, because it is rare or even unique good.
The avatars include pixel men, cartoon monkeys, ducks and bonsais
You can think of it as a kind of Dadaist art top, only that there is a lot of money involved. Among the avatars there are pixel men that look like from video game primeval times, comic monkeys or ducks, fashion mannequins or stylized bonsai trees. There are only a limited number of files in each series, usually a few thousand – and all of them are in great demand, especially among cryptocurrency enthusiasts.
Contrary to what was originally prophesied, NFTs by no means lead to a democratization of the art market. A few months ago it was said that thanks to NFTs, the spheres of Sotheby’s and Christie’s would soon be accessible to the general public. On the contrary: The international art establishment does not give the Avatar dealers the slightest care. They are more of a strange combination of a closed society and a small investor association.
The only practical use of the pictures is that they can be used as a profile photo. Some also give you access to a private chat server. The most expensive files now sell for eight-digit dollars, and every time the images change hands, their value increases. A dearly bought sign of belonging to a more or less illustrious circle.
The sudden appearance of such bubbles is not even the most remarkable phenomenon. After all, there have been enough situations in the past in which previously worthless things suddenly became the subject of speculative hysteria, regardless of whether they were tulips or cuddly toys filled with plastic grains such as the “beanie babies” from the nineties, which some collectors in to ruin. Much more astonishing, on the other hand, is the lack of imagination of the people. We can’t think of anything better than using every new technology for the accumulation and traceability of property.