Behind the explosion of the NFT utility concept: human greed or the pursuit of innovation?

The term Utility has recently become a hotly debated point in the NFT market. The fuse came from the famous NFT photographer Drift’s sale of the open version of the NFT “First Day Out” (First Day Out). This photo NFT successfully sold more than 10,000 within 24 hours, with a total sales of more than 6 million US dollars.

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After the sale, some collectors began to ask Drift about the next development plan of the project, including the utility of the work itself, as an incentive for the holder. However, Drift responded that art itself is utility and doesn’t need to have any utility, so it doesn’t owe anyone who bought his work anything.

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The remarks immediately blew up a cauldron on Twitter. Artists and big Vs in the Twitter circle came out one after another, and the line of demarcation between teams was so clear. Artists are basically on Drift’s side, arguing that the only concern of artists is to create art itself, not to provide utility. Many collectors said that since you choose to play in the world of Web3, please respect the rules of Web3.

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In Gongmaru’s view, behind this debate, the NFT market and ecology have been constantly changing. This friction between artists and collectors reflects that the crypto collectible market is entering a phase of exploration of the true value of NFTs. Compared with the NFT world at the beginning of 21, the NFT world only focuses on the image itself, so it also brings a lot of time dividends to the artists. As the NFT space becomes more and more saturated, the collectors now begin to seek the application of the NFT technology itself. greater potential.

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In recent months, we have seen tremendous changes and innovations in the NFT field, both at the social and technological levels. Many communities have begun to reach a consensus that the current method of arbitrarily valuing Crypto collectibles based on images alone is not sustainable in the long term, and needs to be based on benefits, rights, participation opportunities, and access criteria, etc. Build more utility to bring a new attraction for NFT collectors (new and old alike).

The following 2 cases represent a creative team and an artist respectively, explaining how to create different types of rights for collectors on the basis of the usual collectability and scarcity of NFTs, including event tickets, special VIP treatment, redeemable Sex, voting rights, incubation, free airdrops, and charitable purposes, etc., but also bring success to the project itself. Essentially, these actions are to encourage holders to participate in various activities on the basis of purchasing Crypto assets, build exclusive communities with creators and enjoy an unprecedented immersive experience, and improve collectors’ loyalty and attraction More new collectors become “logger tired”.

  • BAYC 

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The great success of the Boring Monkey Project (the floor price of a monkey has exceeded 124 ether at the time of writing this article) is inseparable from the pioneering nature of the creative team to continuously seek the value of NFT. It can be said that while other projects are still discussing the artistry of image presentation, the team is already exploring the practicality of NFT itself, exploring how to turn the project into a life-time exclusive membership community full of privileges such as events and parties. Practices include collaborative projects with member artists, the ability to mutate ape NFTs, free airdrops, exclusive merch, voting and gaming, and an upcoming land sale. Additionally, the BAYC team and its exclusive members voted to make a generous donation of $850,000 to a number of ape-related animal charities. This brand not only has a positive impact that ultimately benefits those in need, but also proves to collectors that the NFT utility they launch brings more value for the money they spend.

  • Takashi Murakami

As a well-known contemporary artist, Takashi Murakami has always been at the junction of traditional art and popular culture. His representative series of smiling sunflowers has won the common favor of the traditional art circle and the fashion trend circle. In addition, he keeps holding exhibitions and co-branding products with big brands, so that his works themselves continue to generate huge market value. Last year, he joined forces with Crypto studio RTFKT to launch the NFT project Clone X. In addition to being used as a collection, these 3D NFT avatars can also be used by collectors for platforms such as games and Zoom meetings. The current floor price of the project is 17.3 ether.

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Following the great success of Clone X, Takashi Murakami just officially launched his own NFT project “Murakami.flower2022” in April this year, which consists of 11,664 sunflowers of different shapes and colors generated in a 108*108 pixel grid. Each wallet can buy only one NFT sunflower, which is sold in the form of seeds, and users will not know the specific shape of the flower until the public sale. In addition to the disclosed roadmap, it is said that there will be related games, offline games and physical collectibles as additional benefits for Sunflower NFT holders. Therefore, although the specific form of the flower was only slowly revealed on the 21st, the floor price of NFT in the form of a seed has now risen to nearly 7 ethers. After more interesting utility news is confirmed, it may only be a matter of time before the market performance of Clone X is exceeded.

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Of course, not all artists have the same exquisite business acumen as Takashi Murakami. They have their own artistic pursuits and strive to pursue a purer art form and aesthetics. In this regard, Gongmaru expressed great admiration and respect. However, if it is because of this, it is believed that the art works issued in the form of NFT should not be affected by the so-called objective factors of the market, and they choose to continue to emphasize the uniqueness of Crypto artwork “images”. Then, as the market becomes more and more competitive but the liquidity has not improved, it may be more questioning or even abandonment to welcome artists. After all, ART is always about BUSINESS.

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Compared with the relationship in the traditional art market, this level of buying and selling relationship is actually not much different. What’s more, there are still a large number of intermediaries in the traditional art market, such as galleries, brokerage companies, and media companies, to jointly promote the artist’s brand and the market’s public opinion orientation. Although the third party also extracted a lot of benefits from this, it also gave the artist himself a more “quiet” space to focus on his own creation. The art market under Web3 gives artists the opportunity to face collectors and market themselves without resorting to the power of intermediaries. However, how many artists can single-handedly operate themselves as a brand, and have this energy and ability to simultaneously serve as public relations, sales and even customer service?

On the other hand, if art NFTs were embraced before because they could bring provable scarcity, authenticity and ownership to collectors, then after artists have released thousands of NFTs and earned millions Even after tens of millions of yuan in wealth, can collectors continue to enjoy the scarcity of the artwork itself? If not, what’s the point of this so-called “irreplaceable ownership”? If Picasso and Van Gogh can be seen all over the street, which collectors are willing to spend huge sums of money to pay for these paintings? The inevitable result is that collectors hope and demand that in addition to owning works of art, they can obtain additional rewards, so that the Nth version in their hands can be more distinctive, and the economic returns can be more sustainable and stable. Otherwise, in the face of a decline in demand and an increase in supply, there is only one outcome for the price of works—falling. This is the basic common sense taught to many people in the first chapter of economics textbooks.

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Anyway, you can accuse collectors of becoming greedy, not satisfied with the artwork itself, and wanting more added value to make their investment get better profits, or even quick and short-term explosive returns ; You can also scold the artist for becoming greedy, and only focus on making money to “over-publish” works, rather than face the devaluation consequences brought about by the imbalance between supply and demand. But this debate will undoubtedly give a wake-up call to creators or collectors who have entered the NFT market, and the time to truly test “NFT is more than a JPEG” has come.

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