NFT, called Non-Fungible Token in English, is a non-fungible token, which has the characteristics of indivisibility, irreplaceability, and uniqueness. NFT is essentially a type of cryptocurrency. Compared with traditional cryptocurrencies, the biggest difference is uniqueness. For example: A and B each have a banknote with a denomination of 100. What if they exchange the banknotes? Just look at the value of the paper currency, then the assets owned by the two have not changed; from the perspective of the paper currency number, because the number of each paper currency is different, the paper currency in the hands of A and B has changed, and this use is unique The method of sex recognition is NFT.
NFT was born in 2017 based on Ethernet Square in called CryptoPunks pixel picture project. To this day, countless NFT works have been born in the blockchain world, the most famous of which is the NFT work “Everydays: The First 5000 Days” by crypto artist Beeple, which was sold at the world’s top auction house Christie for $69.34 million. . There are more NFTs that sell high value on the blockchain: for example, the highest daily sales of CryptoPunks reached $122 million, and Loot, which has recently risen in popularity, and so on.
NFT transaction ranking
Many people are wondering, why is a picture worth so much money? Will it become a bubble? This article will explain the value of NFT from three aspects, so as to analyze whether NFT is a bubble or an important part of the future of Web3.0.
Consensus value: collectibles
Everydays: The First 5000 Days
There is a saying that encrypted avatar NFTs continue to be popular due to scarcity, background culture, and community influence. However, people’s doubts about the value of NFTs are basically derived from the doubts caused by the core view of transaction value ≠ use value. What is the value of NFT avatars? Let’s start from the perspective of collectibles and talk about its value.
There are three types of NFT players. The first type is players who are looking forward to the appreciation of NFT and the purpose is to trade value; the second type is those who simply like and appreciate NFT, which is just a hobby; and the third type is players who coexist with the first two ideas. . From this perspective, NFT seems to be very similar to the familiar “tide brand” kernel.
Trendy brands in the real world: From the cartoon images of KAWS to Bearbrick and Bubble Mart, the “blind box” market once created incredible trading value. The cartoon image of KAWS has X-shaped eyes, big ears like pods, a head like a bulb, no mouth but 4 exposed big teeth, and big pants like Mickey Mouse. If it is just a doll with a high-priced IP, then its target can be a Disney doll; but according to the public’s definition of it, it is not only a cartoon doll, but an artwork created by an artist. Excluding the IP and the cost of the item, it is more expensive What is the value of it as a work of art. But Bubble Mart is almost irrelevant to art. Through the blind box gameplay, it has an extremely high transaction value in a short period of time.
Bubble Mart’s highest annual income in history: RMB 2.513 billion
The highest monthly income in CryptoPunks history: US$631 million (approximately RMB 4.078 billion)
So why can’t an image with artistic value be sold as expensive as KAWS? It only possesses the value of “trend”, which is completely separated from the value of the item itself, and belongs to the value that has been given. From this point of view, NFT has a better value than the above-mentioned “trend” products that can demonstrate its characteristics: NFT itself has no entity, and the acquired value (transaction value) for “trend” is much higher than its value. For items with inherent cost (cost + brand cost), it has the advantage of being more convenient to store and not generating excess added value. If you simply consider from the perspective of art and market economy, then NFT is better than all trendy brands.
However, if NFT collectibles still follow the line of “tide brand blind box” hype, its characteristics will make it more quickly dissipate heat and fall into a bubble. “Rareness” is a valuable attribute, but its value does not lie in transaction value. After the NFT “tide brand blind box” is in vain in the future, people may seek the next stage of NFT-props.
Consensus value: props
Loot official website interface
So, how does NFT become a prop? In the market where avatar NFT or collectible NFT continues to be hot, the public does not expect and pay much attention to the NFT’s prop function. However, Loot, which has exploded recently, has experimentally built NFT props through a bottom-up approach.
Props, in essence, serve the needs. For example, a pair of scissors can only appear and become props when the function of “cutting” is needed. However, the props created by Loot are bottom-up. The props are created first and then the requirements are generated according to the definition of the props. This situation is mixed. The superior is because Loot’s uniqueness makes it successfully out of the circle. On the surface, it is still a collectible NFT, but it attracts more people to interpret the tricks of these words. The inferior is also because of the out-of-circle, as a bottom-up style. Props, if they cannot create demand and transform the demand into content that can generate benefits and value, it will eventually become a bubble and become a “crazy bubble of NFT deformity” in people’s mouth afterwards. The most direct and easily understood value of props should be continuously produced under the demand framework. For example, a plot of Decentraland , or an NFT card based on a certain theme (mythology, fantasy, etc.), the easiest way to convert from collectibles to props is to become a card game.
The value of NFT as a prop is that it can participate in a wide variety of gameplays. Whether DeFi or GameFi, NFT can be used as a tool to bring more convenience or expand functions. However, existing projects that use NFT as props are still difficult to get rid of the “scarce value” feature of NFT collections. This has to be vigilant. The premium brought by scarcity value will destroy the liquidity value of NFT as a prop. Eventually it will lead to the collapse of NFT.
If the function of various decentralized designs is the superstructure, then NFT is the cornerstone of these buildings. In the world of blockchain, compared to the cornerstone, NFT propsization should be said to be a kind of building blocks-from one gameplay to another, NFT holders can use these “building blocks” to build a variety of novel and interesting buildings , It also adds more liquidity to NFT.
The value that can be obtained in the future: the tools of the meta-universe
After NFT becomes a prop, the further expansion of functionality is to become a tool of the meta universe. The most important part of the metaverse is to make the products in the metaverse have transactional value, so as to encourage users to produce more creations in the metaverse, and to continuously expand and maintain the activeness of the metaverse. If there is no tradable value and user-based creation, even with extremely top technical support, what you create is just a large-scale game.
Loot is considered “advanced” to build tools outside the meta-universe: Loot NFT does not have a complete construction by artists or core developers. Anyone can combine it into various projects such as on-chain games and meta-universe. Developers can Build it the way you want. Following this wave of enthusiasm, there will be many NFT projects that imitate Loot. If one of the meta-universe projects makes NFTs with similar functions, it can be smoothly integrated into the meta-universe and become a hot tool.
The explosion of Loot may drive the function of NFT from collectibles to props and even meta-universe tools. Up to now, there are more than 10 Loot-like projects on the market. These imitation projects have made more changes on Loot’s shoulders: some have complemented the game story and design on the basis of Loot NFT, and some have launched NFTs that are gradually released over time. Various interpretations of Loot can make people more clearly realize that NFT can be used as a tool for blockchain games or meta-universes. It can be integrated with other protocols and has independence across protocols. It only belongs to them. The owner of the NFT.
In summary, if NFT does not derive in function and its value attribute is still in the stage of collectibles, it will inevitably become a bubble in the future; only when people have a new consensus on the function of NFT, can NFT be more practical. The value of sex is thus revitalized.
- Wang, Q. , Li, R. , Wang, Q. , & Chen, S. . (2021). Non-Fungible Token (NFT): Overview, Evaluation, Opportunities and Challenges.
- Ondrejka, C. . (2004). Escaping the gilded cage: user created content and building the metaverse. New York Law School Law Review, 49.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/hyperpay-nft-bubble-controversy-and-its-evolution/
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