NFT Use Case — PFP
NFT stands for non-fungible token. Fungible means something to be freely exchangeable or replaceable, in whole or in part something like money, oil, wheat, etc. For example, ETH or dollars are fungible. One dollar can be exchangeable with another dollar.
Non-fungible token is an unexchangeable or irreplaceable token. It is a unique and not divisible token on a blockchain. It gives the ability to assign or claim ownership of any unique piece of digital data.
Before Blockchain, digital assets are copied. The copied item is same as the original one. There is no distinction between the original and copies. It is tough to prove the ownership of the digital asset.
Besides uniquely identifiable digital assets, what other benefits we can have using NFTs. It resides on a blockchain which means that it inherits the benefits of a blockchain, security(harder to hack due to hash encryption and consensus mechanism), transparency(all transactions are recorded, thus can be traceable), and no central authority (peer nodes validate a transition).
For example, an NFT could represent:
* Digital Art (GIFs, Collectibles, Music, Videos )
* Real-World Items (Deeds to a car, Tickets to a real-world event, Tokenized Invoices, Legal documents, Signatures)
The most popular use case is PFP. PFP is a profile picture, a tiny piece of artwork that you might see as a Twitter or Facebook profile photo.
Below the screenshot is the top 5 NFT ranking on Opensea. All of them are PFP NFTs.
Take a look at Bored Ape Yacht Club. #1859 is selling for 100 Eth, which is about $300,000. This tiny picture is worth more than a house in some places.
What can a BYC holder do with it? They can access their club. Here is a quote from their website. “When you buy a Bored Ape, you’re not simply buying an avatar or a provably-rare piece of art. You are gaining membership access to a club whose benefits and offerings will increase over time. Your Bored Ape can serve as your digital identity, and open digital doors for you.”
I don’t own a BYC NFT. So, I can’t access the club. Their site states, “Ape holders can paint a pixel on the bathroom wall every fifteen minutes. Think of it as a collaborative art experiment for the cryptosphere. A members-only canvas for the discerning minds of crypto twitter.” It is not an attractive benefit. So, this is not the main factor in buying a BYC NFT.
Celebrities like Jimmy Fallon and Paris Hilton promoted the exclusive Bored Ape Yacht Club NFTs, becoming a must-have status symbol for some very wealthy people. It can be used as a new identity in the digital world. Digital identity is a significant factor in the growing popularity of PFP. This is the main use case of NFTs.
Once a community has been built around special kinds of NFTs like BYC, the member of the community will have a special bond and identify themselves as one of the herds and will do whatever to show off and promote their status.
One a good example is “Bored & Hungry.” It opens on April 9th in Long Beach, California, and features a smashburger style concept with caramelized onions and special sauce. The branding includes Nguyen’s recently acquired Bored Ape #6184 and two more Mutant Apes.
Another PFP NFT project is Doodles. Doodles launched in October 2021. It has Doodlebank, the community treasury that will be used to scale the Doodles team and begin experimenting with growing the Doodles brand. There is over 650 ETH (about $1,980,550) in Doodlebank. Doodles NFT holders can propose new projects or vote for existing proposals.
As of writing this post, there are 153 new proposals and five final proposals. Below is one of the new proposals as an example.
Once get enough votes, this proposal will be executed. Thus Doodles community members can participate actively to build the brand, expand utilities so that the NFT holders can get more benefits over time, promote the brand and its goods, etc.
Doodles co-founder Jordan Castro said in an interview with Cointelegraph. “We are showing the world by example what we believe the future of brands to be: Communities becoming stakeholders. It is our philosophy that communities will be the future flywheel of brand growth, and our approach is to foster successful, creative, technical and entrepreneurial talent from within our community.”
Even you can buy Doodles goods on their shopdoodles.
There are many interesting PFP projects. You may check them out. NFT started with PFP and is currently the mainstream. It has helped to draw the attention of non-technical people to get into the NFT space. It also well demonstrates the nature of blockchain, giving ownership and power to the community members.
K-NFT is also preparing PFP NFTs with a traditional Korean hat called Gat. GAT holders can propose projects with Korean artists. Our first project is “Love in Calligraphy.” It is a K-NFT originated project. We will do more community initiated project in the future. Stay tuned.
