Boring Monkey NFTs like the Digital Age’s Beanie Babies?
Bored Ape NFT, Cyberpunks and others could become the Beanie Babies of the 21st century.
That is unless they pivot their business models to capture real, diverse and recurring revenue streams.
But to get there, the question remains: What is a non-fungible token good for, really?
To that end, and as told by the Financial Times, a number of digital token issuers are trying to straddle the digital and physical realms, where art, music, videos, toys and more are based on NFTs and vice versa.
This omnichannel approach, for lack of a better term, may be a last gasp. For the NFT industry as a whole, the decline has been strong and financially punishing during the crypto winter. Monthly spending on digital offerings has fallen 87% to $442 million, measured in November.
At the same time, the volume of “stamped” NFTs has plunged by 60%, and the volume of active buyers and sellers is a third of the levels at the beginning of 2022.
Investors look at celebrity endorsers and creators with a jaundiced eye.
For example, as reported in this place earlier in the month, a lawsuit filed in California by investors has accused Yuga Labs, the $4 billion company behind NFT collections Bored Ape Yacht Club (BAYC), CryptoPunks and Meebits – of using celebrity endorsements to goose sales without disclosing their financial ties.
Beanie Baby Parallels
The parallels to Beanie Babies are strong, and the timelines are about the same. Back in the 1990s, the stuffed animals appeared in 1993, began to be “retired” on a case-by-case basis, emerged as very popular items traded on online platforms (eBay made its “legs” with Beanie Babies) and had largely flamed out by the end of the decade.
Similarly, NFTs were first created around 2015, became arguably high-profile with the “cryptokitties of 2017”, and seven years later now appear to be less disruptive to commerce than a fad in the digital age. The staying power is just not there, which is evident from the drastically reduced activity on the stock exchanges in the aforementioned statistics. The shelf life of the NFT and Beanie Baby cottage industry has been about five to seven years.
What is it about?
It turns out that scarcity value is not enough to underpin a real business. Non-fungible assets (NF in NFT) are unique, yes, and exist as holdings that cannot be replicated.
But again, we see time and time again that the art, or the cartoons, or the tweets that are packaged and sent are actually visible pretty much anywhere on the web. For that purpose, the exclusivity aspect is slightly reduced – and an NFT can be thought of as being designed so that it cannot be distinguished from the “original” NFT. And, just like any other offering not backed by a discernible “standard” unit of measurement, the price is determined solely by what someone says it’s worth, by the fact that digital certificate signaling is enough. The days of $69 million Beetle creations seem long gone and far away.
As for the digital/physical tie-ins, the idea of making toys and books based on NFTs (as Pudgy Penguins is rumored to be doing, according to the FT) also seems to diminish the value of “scarcity” and heralds an abundance of physical inventory on eBay and other product pages sometime in the future.
Shades of Beanie Babies, indeed.
PYMNTS data: Why consumers are trying digital wallets
A PYMNTS study, “New Payments Options: Why Consumers Are Trying Digital Wallets” finds that 52% of US consumers tried a new payment method in 2022, with many choosing to try digital wallets for the first time.
