What gives value to a particular NFT?
It doesn’t seem fair to me to put all the NFTs in the same bag. If I buy a unique XCOPY NFT for around €750,000, it is because I know that XCOPY is the Banksy of the NFT generation. He’s like every great artist, but I can’t collect his work any other way because he has a particular style of animation that can’t be reproduced non-digitally.
Profile photos (PFPs) also help understand how value is accrued. Before, if you were a fan of a Disney movie, you could get hold of merchandise. But only as a consumer, because the culture was defined by a corporation from above. I believe that the next Disney will be built from the bottom up, and that individual intellectual property (IP) holders will be the big winners, because they will have more interest in making the project work than anyone else. This is a unique property investment.
5. What are NFTs Blue chip?
They are the NFTs with the greatest staying power: the projects with the highest reserve funds and the most plausible plans to grow, grow, grow. Right now, the undisputed market leader is Yuga Labs.
During its first year, Yuga Labs’ flagship collection, Bored Ape Yacht Club (BAYC), snatched the top-selling PFP podium from CryptoPunks, which it later acquired the IP rights to. BAYC is so attractive because it grants rights to owners: they can turn a copy into NFT and monetize it, giving rise to curious spin-off projects, like the group of Bored Apes signed by Universal Music.
Currently, Yuga’s NFTs have reached 40% of the sector’s trading volume. The company receives royalties for each sale and is diversifying. He launched merchandise only for owners of NFTs. He helped create ApeCoin, an open-exchange cryptocurrency that he gave away to owners that almost instantly achieved a diluted market capitalization of $10 billion. It’s no wonder BAYC inspires so much loyalty among owners of NFTs, whether they’re the lucky ones who minted them in April 2021 for around $200 each, or the celebrities who have bought them for six-figure figures. Does BAYC’s dominance of trading platforms benefit anyone else? Well at least the next David NFT already has the Goliath of it. —DC
6. Who are these potential contenders, the Davids of Yuga the Goliath?
Aspiring to become the “next BAYC” appear all the time, but if there is one thing that never changes about NFTs blue chips is its transmedia mentality: events, merchandise, derived products. When cool cats signed for CAA, one of its creators promised that it would be “more of an experience than just a JPEG”. The website of Azuki promises “exclusive collaborations of streetwear” in your digital universe. Nike acquired RTFKT, the signature of virtual sneakers and avatars for the metaverse. If an NFT brand’s IP is good for selling hoodies, they say, it might as well be worthy of a Netflix project. —DC
7. Can the cost of an NFT be divided with
someone else?
If possible. It is called fractionalization, and it is a way of achieving participation in very high-cost projects without having to acquire them in their entirety. The owner of a particular NFT can issue as much as he wants of tokens fungible and let other people buy and sell fractions of your assets. It’s a lot like buying stock in a company, except now you can split anything up with ease. In essence, you do it to (1) make money investing or (2) because you like art in NFT format. Or, perhaps, a bit of both at the same time. Alternatively, to sell an NFT in the traditional way, a group of collectors can use platforms like PartyBid where they contribute ETH and buy as a group, so that each one would receive a proportional part of their tokens expendable. —DC
SECTION 2: SO YOU WANT AN NFT…
8. How long do NFTs last?
As long as life has the blockchain, as there is no way to delete an NFT once it is registered. However, it is possible to dispose of an NFT by “burning” it, that is, sending it to a wallet called a null address, from where it can no longer be retrieved.