Overview of NFT Collection | Competition of Jpeg lands
The land of Jpegs is beautiful but also full of competition from NFT collections. Is there an opportunity for those who want to challenge the position of the giants?
Competition of Jpeg lands
The birth of NFT has revolutionized the way of owning book assets and occupies a large market share in the crypto market. NFT Collections are a measure of:
· Community size of a network: The more NFT collections used as avatars, the larger the community.
· Financial status of the community on a network: The higher the value of the collection, the higher the financial potential of the community that owns that NFT.
· User preferences for NFT images: pixels, anime, cartoons,...
· User preferences for development around collections: Making games, DeFi projects, toys, movies,...
Understanding the full landscape of NFT collections will help us understand a significant portion of the community on a network. From there, users and projects can understand what are the popular trends to make investment and product development decisions.
NFT collectibles are quite similar to other branches in the crypto market as the number of new networks is increasing but the value is concentrated mainly in just a few networks. A map of the Jpeg world also appears with the division largely belonging to Ethereum, Bitcoin and Solana. Other lands such as Polygon and Base are still insignificant when compared to the market shares of the top three.
So what are the differences that have helped Ethereum, Solana and Bitcoin attract value? Is there hope for other challengers?
Ethereum pioneer and the pie has been divided
Ethereum is the pioneer network of the crypto market, its support for smart contracts has paved the way to create a series of groundbreaking applications today. Every Ethereum update and product is learned by other ecosystems, and NFT is one of them.
Kicking off with the launch of Crypto Punks in June 2017, the collection of 10,000 8-bit pixelated NFTs was one of the world's first popular NFT projects and has inspired many. artists, even promoting the future development of the ERC-721 token standard.
The pioneer paved the way to make NFT collectibles what they are today. During many years of development, the market share has gradually been divided as prominent and earlier developed projects have attracted the community for themselves.
Yuga Labs and the rest
Among the 12 projects with the current top trading volume, there are 5 collections developed or acquired copyright (IP) by Yuga Labs including: Bored Ape Yacht Club, Mutant Ape Yacht Club, Crypto Punks, Moonbirds , Meebits. Not to mention other famous NFT collections such as Otherside, TwelveFold, Bored Ape Kennel Club. With powerful resources and ownership of famous collections, Yuga Labs is a powerhouse of the NFT branch on Ethereum.
Currently, Yuga Labs is focusing on developing Otherside, a metaverse game where players can freely create content like Minecraft. PFP NFT holders in the Yuga ecosystem and partners can bring characters into the Otherside universe.
However, developing a quality game capable of satisfying a large number of players requires time and a lot of resources. The mini games that were released first while developing the main game Otherside such as Donkey Dash, HV-MTL, Legend of the Mara after a while failed to retain the community. Players spend too much money to participate in mini games but the rewards are not much.
The collection representing Yuga Labs, Bored Ape Yacht Club (BAYC), is also continuously discounted. In the previous cycle, owning BAYC helped users receive a lot of related airdrops. However, after the airdrop trend ended, the value of BAYC also decreased sharply. BAYC price from the current peak of 152E has dropped to the 10E area. Other collections in the Yuga system also suffer from a similar situation. Last February, Yuga spent about 250 million USD to acquire Proof, the studio behind the Moonbird collection, which also raised concerns about whether Yuga Labs is overspending.
Some financial figures of Yuga Labs:
· Raising capital of 450 million USD with a valuation of 4 billion USD in the seed round
· Earn 410 million USD from minting NFTs
· Earned 158 million USD from royalties
With that amount of money, it can be surmised that Yuga Labs' financial situation is quite good. Yuga Labs also owns many of the top NFT collections on Ethereum. If the strategy game Otherside can develop as expected, Yuga Labs still has many opportunities to attract value in the future.
New directions
With less resources, a limited community ownership, and no experience and team to develop real products, many of Ethereum's top NFT collections have chosen other directions instead of developing products like Yuga Labs.
A typical example is Pudgy Penguins selling toys with their NFT images. Pudgy Penguins is one of the hot toys on Amazon and sold more than 500,000 USD in the first 2 days of launch.
Another example is Azuki, with the release of an anime film themed around characters possessing elemental powers (see the movie trailer here). Following that development direction, Doodles also announced the launch of a cartoon featuring the character Doodles.
It should be noted that in addition to the collections mentioned above, not all collections inform the next development direction, such as Milady, CloneX,... This is also a criterion to consider for those who want to Join the NFT ecosystem on Ethereum.
Solana, resurrected strongly from the ashes
In November 2022, the FTX exchange collapsed. This incident seriously affected the Solana ecosystem, SOL price decreased by more than 50% and reached $10/SOL. The consequences continue to spread to other projects in the ecosystem when many projects leave money to call for capital on the FTX exchange. Solana's image at that time hit rock bottom, users gradually left the ecosystem. Even many top projects were not optimistic about the future of Solana, the leading PFP collection at that time, Degods and y00ts, also left Solana for Polygon and Ethereum.
However, in that dark hour, there were still many products being cherished and developed in the ecosystem. Mad Lads with continued development on Solana has received a well-deserved reward. With a reputable team, beautiful PFP and products, Mad Lads has naturally replaced the void left by Degods and y00ts to become the top collection on Solana.
The success of Mad Lads also fueled the growth of many PFP NFT collections such as Tensorians, Claynosaurz,...
Not only did Mad Lads succeed by not leaving Solana when other competitors did, NFT marketplace Tensor also succeeded in the same way. While Magic Eden focuses on multi-chain support, Tensor continues to perfect products for NFT players on Solana. To date, the trading volume on Tensor's Solana has surpassed that of Magic Eden and has become the most popular NFT exchange on Solana. The value of Tensor's NFT collection, Tensorians, has also grown accordingly.
The top NFT collections on Solana tend to grow with products:
· Mad Labs: Wallet + exchange
· Tensorians: NFT marketplace
· Solcasino.io: Betting platform
· Portals: Metaverse Game
· Famous Fox Federation: NFT-related product suite
· Aurora: Game
· Sharky: NFT Lending
Solana's low transaction fees and fast transaction confirmation speed are factors that encourage the continuous circulation of value across the ecosystem. NFT projects therefore need other factors to retain users instead of just holding NFTs. The product or product set that brings the most value to users will have an advantage in the NFT branch on Solana.
Bitcoin dark horse
Since its launch, Bitcoin has always been the representative face of the crypto market. $BTC is the coin with the largest market capitalization and is considered "digital gold". However, for a long time, the Bitcoin network almost stood still while other ecosystems developed rapidly.
Faced with that situation, many developers have tested solutions to bring new breeze to the Bitcoin network. Prominent among them are inscriptions with the ability to engrave data into sats, Bitcoin's smallest currency unit.
Bitcoin from a network that does not support smart contracts and cannot develop related features, thanks to inscriptions, has opened up new development directions when it is possible to create tokens, NFT collections, games and even smart contracts. on the network.
NFT collectibles on Bitcoin gradually appeared and quickly attracted value. Due to limitations related to fees and transaction processing speed of the Bitcoin network, the frequency of NFT transactions above is lower than other networks. Comparing user distribution with trading volume, Bitcoin NFT has a lower number of users but trades at a higher volume. From there, it can be deduced that the current Bitcoin NFT segment belongs to the high value segment.
Each collection has its own special features such as Ordinal Maxi Biz, Bitcoin Frogs engraved on rare sats, NodeMonkes running Bitcoin nodes, Runestone developed from the Ordinals team,...
The number of new Bitcoin NFT projects is gradually increasing as the Bitcoin Ordinals trend grows. This leads to demand for rare sats and trading of rare sats is also happening in the market.
Recently, the value of NFT collections on Bitcoin has grown strongly due to information related to the airdrop from Runes Protocol, a new token standard that promises to replace the old BRC-20 standard. After the halving event that took place on April 20, many airdrops were completed and the value of NFT collections decreased rapidly.
In the long term, NFT collections on Bitcoin still have a lot of potential to attract cash flow due to belonging to the largest value network in the market. Collections with outstanding features such as having revenue from running nodes, being engraved on rare sats, etc. will be more likely to receive attention than other collections.
What opportunity for challengers | The future situation in the Jpeg world
NFT collections are a measure of a network's community. Networks with strong communities will almost certainly have valuable NFT collections. Therefore, choosing the right network is very important if you want to have a significant market share in today's JPEG world.
In addition to the community factor, we also have to pay attention to the development direction of the ecosystem. If that ecosystem's strengths or development direction does not focus on NFTs, it will be difficult for NFT collections to attract cash flow. For example, Tron was created mainly for USDT transfers, Arbitrum focuses on DeFi development, BNB Chain has a rather mixed ecosystem and lacks a loyal community,...
In contrast to the above examples, we can see chains that are quite suitable for developing NFT collections such as Base with a strong community and user base from Coinbase, Ton Network with a community element. available from Telegram,...
Chains that have differences in platform and support NFTs are also worth noting. This development method will be similar to the way Solana developed the NFT ecosystem previously. Currently, there is a Starknet network that has the above characteristics with strengths in Fully-on-chain games (FOCG) and FOCG-related NFTs.
Conclusion
The NFT market is currently quite concentrated with value mainly belonging to Ethereum, Solana and Bitcoin. There is still an opportunity for other networks to take market share from the market, but the opportunities will not be equal across ecosystems. This will be a factor to consider if you want to invest in or develop NFT collections.
