
In 2020, “fungible” became one of the most searched-for words on Google
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2022 saw NFT values all but wiped out. Just ask Justin Bieber, whose $1.3m (500 ETH) Bored Ape NFT is now valued at less than $60k, in one of the most well-publicized examples. Blockchain data providers suggest that the NFT crash saw the whole NFT market volume drop by 97%, contributing to an overall crypto crash that wiped around $2tn in value off the industry.
Reflecting on the Crash & Why Penguins Were Important
When I look back at everything, it’s pretty clear what happened. Hype pushed up the prices, and the “Greater Fool” theory prevailed (there’s always a greater fool to pay more for an overpriced asset – until there isn’t). JPEGs of 8-bit characters without any utility were almost doomed to see steep decreases, as was forewarned by experts like Gary Vaynerchuck. However, there were glimpses of hope from some progressive projects that NFTs would eventually find their place in society. Now, I’m pleased to say that they have done so.
Pudgy Penguins was one project that set itself apart from all the hype, managing to avoid extreme price volatility. While other collections were in chaos, CEO Luca Netz was busy accelerating the brand, forging exciting retail partnerships, and proving the utility. That’s not to say Pudgy Penguin’s story doesn’t feature hurdles and setbacks, but the brand’s appeal and adaptability has led it to thrive all year long.
In 2023, Pudgy Penguins announced the launch of a physical toy line that is available in Walmart
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Pudgy Toy Clip Ons
Luca told me, “Much of the NFT market left me frustrated and disappointed. The community and venture capital had raised so much money for so many NFT projects, and the output was weak, comprised of too many buzzwords and not enough utility. It seemed like many of the projects were riding the high and not really innovating. Instead of standing idly by, we decided to take a more driven approach to NFT project development, and the results speak for themselves. In fact, we’ve surpassed NFTs and are working on new areas that will foster greater utility and value for our community.”
What’s Driving the NFT Market Boom?
Throughout most of the NFT market’s lifespan, OpenSea has been the biggest and most active NFT marketplace. In 2023, however, it was surpassed by a new rival called Blur
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I believe the recent rise in NFT activity is about more than just coin prices; It’s down to the rise of utility-based NFTs.
Distilleries, Charities, and Female Empowerment
There are myriads of NFT projects offering real utility, tangible rewards, and even working toward the greater good. A prime example is the Umoja Foundation. If utility is rooted in making our lives a little better or easier, shouldn’t there be major projects targeted at helping those with the hardest lives? That’s part of Umoja’s mission, working with schoolchildren in Uganda to create digital art NFTs that can then be sold to help local orphanages. Their most recent collection is up for auction on Rarible now. The NFTs then boast four utilities – early access to future NFT drops, VIP entry to virtual and IRL events, discounts and giveaways, and governance in future projects with the Umoja Foundation.
Maliha Abidi (Photo by Anna Webber/Getty Images for Twitter)
I have a soft spot for Women Rise, an NFT project focused on inclusion and diversity and launched by Maliha Abidi. This computer-generated 10,000-piece NFT collection features female artists, professionals, scientists, coders, and many more from around the world. Some of the utilities include airdrops of Abidi’s book “RISE: Extraordinary Women Of Colour Who Changed The World,” surprise giveaways, and hand-drawn traits of the Women Rise NFTs. The project reports that around 40% of the approximately 5,600 Women Rise holders have purchased Women Rise as their first NFT.
“There were few women-led NFT projects when Women Rise first launched, and it was important for us to take up space in a busy and competitive crypto space, I was keen to establish Women Rise as a woman and Pakistani-led team with a global community that could leverage NFTs to represent women and also campaign for girls’ education on many different platforms and stages. To that end, NFTs have been very supportive of our mission,” Maliha Abidi, Founder of Women Rise NFT, and a member of the 100 Most Inspirational Women of Web3.
Women Rise
Next up is Degen Distillery. This is a crowd-created and community-driven spirits brand that has partnered with Scotland’s BrewDog brewery and Google. Their first NFT collection contained 721 NFTs – 360 Day, 360 Night, and 1 unique. The Unique NFT winner received a trip for 2 to Las Vegas for three nights, with a $750 tab at the BrewDog BrewPub in LV. All 721 NFT holders could exchange or burn their NFT for a collector’s edition bottle of 721 Vodka. Only 721 bottles were made.
Those who held onto Degen’s NFTs received membership pricing for life, access to events & some guest lists, priority access to future drops, and more. I love how this project blends the digital and physical, leverages a passionate community, and makes holding the NFT more appealing than selling. As part of Google’s involvement, Degen will have access to Google Cloud credits, a Web3 business community, funding, Google’s unparalleled network, and Google’s technical support team.
Degen Distillery
Other utility-backed projects in real estate, carbon credits, fractionalized Bitcoin
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2021’s NFT Boom Was a Proof-of-Concept
When I zoom out and look at the entire lifespan of NFTs, I realize that 2020 and 2021 were just proof of concept. So many people were dismissive of them, but I remembered that novelty typically precedes utility and was confident that with time, they’d come good.
The first NFT boom might never have happened had it not been for the pandemic, lockdowns, and the state of art, popular culture, and technology at the time. So many factors contributed to the first NFT boom, and I’m starting to see a similar pattern now. There are established marketplaces, a Bitcoin ETF looks to be on the way, crypto prices are rising, Web3 is flowing nicely, tokenization is getting ready to become a multi-trillion dollar industry, and there are new dynamics with AI and spatial computing that will irrevocably change culture as we know it. The setup for a 2nd NFT boom looks like it is in motion.
Of course, now the NFT market is saturated with cartoons and renderings, and AI has only propagated that, so it’s the responsibility of utility NFTs to distance themselves from non-utility-backed NFTs to carve out their success. Making NFTs useful rather than flex-worthy will elevate this new generation of digital assets.
One company that has loudly, proudly, and defiantly continued its march in the NFT world despite all market upturns, downturns, corrections, and complications is Nike
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In 2024, NFTs are going to be relevant again
That’s good news for everyone. The space will finally move away from flexing and speculative trading to push for genuine utility and progress. I’m all for it and can’t wait to see what happens! NFT marketplaces being competitive, innovative new NFT utilities making headlines, and the rise of Web3 will all stir up demand.