In 2021, we saw an explosion of NFTs, and the biggest impact came from PFP collections. This is one of the NFT categories that is closely connected to cultural activities on the current Web3 space. This article will explain PFP NFTs and why they are growing in popularity.
What are PFP NFTs?
- PFP (profile picture) is a popular acronym on social media.
- NFTs are non-fungible tokens, assets that exist primarily on the Ethereum blockchain with unique digital identities.
Combining these two terms, PFP NFTs are a unique type of digital Non-Fungible Token (NFT) used to make avatars on social platforms or online platforms. Twitter is a hotspot for PFP NFTs, most notably collections like Bored Ape Yatch Club (BAYC), Yuga Labs’ CryptoPunks, Meebits, Doodles, and Cool Cats.
PFP has always been the NFT category with the highest capitalization, trading volume, and liquidity ever.
Basic characteristics of PFP NFTs
Display: PFP is commonly known as a static, 2D NFT profile picture created to represent a social media account to identify the profile while retaining its decentralization. However, as blockchain technology continues to evolve, new trends emerge that create creative opportunities for developers with full-body PFP images and even animated projects.
Properties: The majority of these assets are creative works of art. Computers generate these pieces usually through a common algorithm (however hand-drawn PFP NFT collections are also quite common). Synthetic PFP projects often consist of thousands of NFTs with content that is often anthropomorphic characters with unique characteristics of each project.
What sets PFPs apart are the characteristics including background, outfits, accessories, hairstyles or even changes in the character’s expressions. Each PFP NFT usually has a rarity rating that depends on the properties and those characteristics will increase the value of the NFT. All help make each piece unique.
Origins of PFP NFTS
CryptoPunks introduced the concept of NFTs as digital avatars, a PFP of the first in the NFT space, and played a key role in the later explosion of NFTs. CryptoPunks launched in 2017, consisting of 10,000 NFTs in the form of 24 x 24 pixel images, 8-bit style released by Larva Labs and is the first NFT project on the Ethereum blockchain.
Shortly after its launch, NFT holders made waves of movement using CryptoPunks as avatars on Discord and Twitter. After that, NFT avatars started to gain immense popularity as celebrities, music stars, and other members of the NFT community joined in. The popularity of CryptoPunks is the precursor to the future of many PFP NFT projects, such as Bored Ape Yacht Club (BAYC).
Why can PFP NFT be successful?
Community Power
The most obvious benefit of owning PFP NFTs gives users a voice and access to the project’s exclusive community activities. The benefits of being part of the PFP NFT community that not everyone can easily access have tremendous appeal to those active on Web 3. In the beginning, users often wanted to own NFTs rather than join a community of fellow NFT owners in that collection. However, the essence of PFP is still just monotonous 2D images along with an increasing number of NFT projects over time. If the project doesn’t have a product to retain users, the preference will diminish and they will leave.
Therefore, at this time, NFT projects enhance the value of PFP NFT owners by allowing users to participate in a separate exclusive community. The cohesion, mutual interaction and network effect of the community is what makes users stick with the project, proudly use their PFP NFTs everywhere on social networks, assert themselves from a potential PFP community and will attract more new users to join.
Unique utilities and benefits
Like so many businesses trying to create a competitive advantage or create exclusive values that competitors cannot replicate, PFP NFT collections are also looking to create exclusive benefits for members that go beyond the community value that the project provides. Being a community member of a PFP NFT project means gaining access to a plethora of events and utilities, not just social media chats.
- BAYC is at the forefront of this model, the owners have access to a private Discord channel along with several NBA stars, famous singers who are titular members of that channel. BAYC NFT holders can also participate in The Bathroom where members can create art ideas and assert themselves.
- Or another example of Azuki where the owner has access to The Garden – a Metaverse of Azuki, owns souvenirs such as clothes, participates in events organized by Azuki…
- As for CryptoPunks, there is not a long list of utilities but the reputation and recognition gained from owning this NFT is a coveted privilege. A Rolls-Royce or Gucci of NFT PFP, where holders can establish their reputation and position in the Crypto market.
Expanding demand
The project that creates the best conditions for the community to create value will have a great advantage in development because the core of NFT is the community. IP or intellectual property rights were born to solve this problem. IP will provide users with the following basic intellectual property rights:
- Right to re-release products.
- The right to create secondary products based on the main product.
- Right to distribute copies of products.
- Right to use the product.
- Right to display products.
- Right to play audio products.
Now, the value of current NFTs lies not only in the image quality, the cohesion of the community but also in the profit potential they can create. However, the development of IP caused contradictions in the community. From the perspective of NFT holders, they want to actually own NFTs, not just .jpeg images, but the project side still wants to control so that the brand is not diluted and can serve an optimal roadmap in the future.
But 2023 has been a completely different year, IP already has an important place in each NFT project. Pudgy Penguins is a bright spot in the market, having successfully developed a sustainable business model with recurring sales in the toy industry. With sales of over $500k in just the first two days, more than 20,000 products were sold. This feat surpassed established brands such as Disney, Transformers, Pokemon, Barbie and Legos. In addition, a few other prominent names such as Doodles, StonedApeCrew, Invisible Friends… is also evolving in line with the Penguins’ direction.
Some outstanding PFP projects this season (according to his portfolio)
– Azuki, Beanz (OG)
– KPR (new)
– Valhalla (new)
– Nakamigos (new)
– The grape (new)
– A Kid Called Beast – AKCB (new)
– Ether (new)
– Cool Cats, Shadow Wolves (OG)
– Moonbirds (OG)
– Cyberkongz (OG)
Wrapping Up
PFP NFT is the tradition and culture closely tied to the web3 space that is difficult to separate. While 2023 is the first downtrend year for the NFT market with dismal trading volumes, many projects have left from day one. But it is often at such times that products with great potential are really born. Leveraging IP, generating sustainable revenue, and expanding the community are core in this NFT downtrend season, projects that know how to take advantage and promote will definitely have an explosive bullrun season in the future.