If one-of-a-kind cryptomedia enables digital art, then collections enable digital community. PFP (“profile picture”) collections are the most popular, and are composed of similarly-themed cartoon avatars. All the avatars together represent an internet collective, yet each avatar is unique in appearance from all others in the collection.
Users signal their membership to the overall collective by owning an avatar, often setting the avatar as their social media profile picture (hence “PFP”). So the avatar is their individual identity within an internet collective. Some of the most popular PFP collections are shown above.
By far, CryptoPunks and Bored Ape Yacht Club (BAYC) are the two most popular collections. This can be seen by filtering OpenSea for top NFTs based on trading volume and floor price. Floor price is a common metric in this space – it’s the lowest price to purchase an avatar in the collection. Yes, the avatars are priced differently from one another – this has to do with their rarity in the collection, which we’ll come to in a bit.
CryptoPunks was the first ever PFP collection. It was created by a company called Larva Labs, and features pixelated avatars with stylistic inspiration coming from London’s 1980’s cypherpunk scene. The collection is made up of 10,000 individual Punks, each made unique by different combinations of attributes.
CryptoPunks can be one of 5 types: male, female, ape, zombie, and alien. Other attributes include things like hair and accessories like hats, sunglasses, and pipes. Each attribute has a certain rarity within the collection. In other words, what percentage of Punks exhibit that attribute? For example, there are only 9 of 10,000 Alien Punks in existence. This is the most rare attribute, making Alien Punks highly coveted and some of the most expensive to buy.
CryptoPunks were free to mint when they first launched in 2017. Users just had to pay an Ethereum network fee to mint the NFT from the CryptoPunk smart contract. Since then, CryptoPunks have been available for resale on secondary marketplaces like OpenSea.
OpenSea provides users with filtering options so they can narrow their search to Punks with specific attributes. Also, OpenSea displays the attribute present in each Punk and shows the rarity of the attribute. For example, 3% of all Punks are smoking a pipe.
At their height, Punk #5822 – an alien wearing a bandana – sold for almost $24M. Currently the floor price is 77 ETH, so it costs around $80k to purchase one of the cheapest Punks on the market. You may start to see how owning a Punk grants you membership to an elite group.
Now let’s talk about another highly successful PFP collection, this time created by Yuga Labs: Bored Ape Yacht Club (BAYC). It’s highly similar in concept to CryptoPunks. A collection of 10,000 Ape avatars, each exhibiting a unique combination of attributes.
Yuga Labs has been active in building out the BAYC community. Holding an Ape NFT gives you access to exclusive Telegram and Discord servers with other Ape holders, as well as exclusive merchandise stores and IRL events (e.g. Ape Fest). This is called “token-gated access” where users connect their wallet to an application to prove ownership of an NFT and gain access to exclusive content/services. It exemplifies the “programmability” of cryptomeida, and NFTs in general.
Ownership of these PFPs, or any cryptomedia for that matter, says something about the individual. And all this ownership information exists on the public blockchain. The right query will output every wallet address that currently owns, or has previously owned, an Ape, for example. This is an open-source contact list that could be used for marketing or product onboarding. Once we can send email-like messages to wallet addresses, we will see the advent of NFT-targeted advertising.
Yuga Labs sends Ape holders additional items and characters, expanding the scope fo the project. For example, Ape holders have received a companion dog NFT (i.e. Bored Ape Yacht Kennel), and a serum that creates a mutant ape NFT from their original Ape NFT. Receiving tokens like this is called an “airdrop”, and is used by other Web3 projects to rewards their users. Also, Yuga Labs has airdropped BAYC and MAYC holders ApeCoin, a cryptocurrency intended for use in BAYC’s Otherside metaverse.
I’m writing about BAYC at a special time. Yuga Labs recently acquired CryptoPunks IP from Larva Labs, and distributed these IP rights to the Punk holders. This had already been done for the Yuga Labs’ other PFP projects. The holders of any of these projects own commercial licensing rights for their individual avatars.
Holders can do things like create media or sell swag related to their avatars. For example, two Bored Ape holders created a music video featuring their apes as DJs in an animated video, which, by the way, could be purchased as limited edition NFTs on Glass Protocol.
Yuga Labs has plans to create a metaverse game around these assets, called Otherside. Ape holders can claim land to own in the Metaverse and their avatars will become in-game characters. ApeCoin will be used in-game, and land plots were also sold in a public sale to onboard others into the BAYC ecosystem.
Let’s take a step back and talk about intellectual property (IP). IP embeds itself in global culture when it becomes popular enough. Think of the universal familiarity of the following cartoons. When you see Buzz Lightyear, you think “Disney”. When you see Batman or Superman, you think “DC Comics”. When you see Iron Man, you think “Marvel”. This IP is worth billions because movies and other products can be spun off of it, and attract fans into perpetuity. Soon, when you see an Ape, you may think “BAYC”.
The unique thing this time is that Web3 gives individuals the ability to directly own this IP. Holding an Ape gives someone partial ownership of the BAYC “brand” as a whole. Not only do they get to leverage the recognizability of the BAYC brand when commercializing their individual avatars, but it’s likely that BAYC revenues (from movies, metaverses, and video games) will get streamed to Ape holders. This is groundbreaking stuff.
Most collections will not reach mainstream, ultra-famous status, but decentralized brand ownership can be used by communities of any size. This gets into the idea of micro-economies, which Web3 uniquely enables with its mechanisms for decentralized governance and alignment of member incentives.
So far we’ve talked about one-of-a-kind, or limited edition cryptomedia, and decentralized brands centered around cryptomedia IP. Now, let’s talk about a niche of cryptomedia: generative art.
If you enjoy videos over reading when it comes to online learning then checkout the course on YouTube. This is part 3 of 8 in the NFT Design Course 2022. Also, make sure to checkout other Web3 Design Courses.