Attendees at NFT.NYC joined to celebrate the emerging their emerging community despite the market downturn. (Ann-Sophie Fjello-Jensen/AP Images for Samsung Electronics America)
Taking place the week of June 20th, NFT NYC 2022 was the largest NFT conference yet, with over 15,000 attendees descending upon New York City to participate in panel discussions, side events, and parties. Despite weakness in the overarching crypto markets, $2 trillion of value has been wiped out since the peak of November 2021, blue chip NFT collections rewarded their communities with impressive pop up installations and parties featuring top DJs and musicians.
The major themes of the conference included NFT projects within the gaming, metaverse, music digital art, sports, fashion and collectibles verticals. Ethereum’s leading layer two chain, Polygon, established its presence within the gaming space, showcasing its upcoming triple-A gaming title Metalcore amongst other titles. Within the metaverse theme, Sandbox hosted its own mini two day conference at Gotham Hall, the Sandbox Expo, featuring panel discussions from industry leaders and performances from Steve Aoki and Tiesto.
The conference served as a nexus point for collections to highlight value to their communities and celebrate their accomplishments, doubling down on their commitment to their members by hosting blow out events and experiences in the metaverse and the physical world.
Top NFT projects aspire to dominate the cultural consciousness by establishing global media brands spanning consumer products, music, film, tv, games, and other forms of content aimed at rewarding existing NFT holders and embracing newcomers. By creating new media and experiences for community members to interact with, NFT collections are following the playbook of the largest media companies in the world, such as Disney.
The enthusiasm around the conference was not mitigated by the decline in prices across the crypto space. The crypto markets have exhibited weakness alongside other risk assets, and NFTs have proven to be susceptible to the broader market conditions. Amongst the top collections, the BAYC floor price declined 64% year-to-date from $270,000 to $98,000, CryptoPunks declined 70% YTD from $260,000 to $79,000, and Mutant Apes declined 66% YTD from $61,000 to $21,000.
“We want to be one of the largest producers of media entertainment and music in the world,” said Doodles CEO Julian Holguin. “This will include IRL experiences, gaming, consumer products, music, movies, and more.”
NFTs are estimated to have an aggregate market cap of approximately $41 billion. The market cap of Disney, a single media company, is valued at $182 billion, which is roughly 4.5x the value of the entire NFT market. Other media companies that serve as models for NFT collections to replicate include Comcast ($178 billion), Sony ($105 billion), and Fox ($17.8 billion), amongst many others. This points to how early the NFT space is and how leading collections are just starting to scratch the surface of the total addressable market.
Although there may be short term market weakness, the turnout and rapid pace of announcements at the event points to a strong baseline community of NFT enthusiasts bolstered by projects looking to create long term value. Blue chip NFT collections are also beginning to cross the rubicon into popular culture. This vision was instantiated when profile picture (“PFP”) project Doodles announced music producer Pharrell Williams is joining the executive team as Chief Brand Officer and focusing on the collection’s approach to “music, artwork, consumer products, animation, and events.” As his first project, Pharrell will produce an official album entitled Doodles Records: Volume 1 in partnership with Columbia Records.
Blue chip NFT projects will continue to reward members by holding “IRL” events and other experiences in the virtual and physical world. At NFT NYC 2022, Cool Cats, the leading cat-themed PFP collection, launched its flagship Cooltopia event which was an interactive and gamified experience in the form of an indoor theme park. This immersive experience was designed as a gamified journey that inspires, educates, and entertains guests as IRL players before they play the digital game. The event is full of the Cool Cats, Cool Pets, and Cooltopia locales, including the air, water, fire, and grass zones.
“We want to create multiple touch points for Cool Cats holders, with a focus on inclusivity and accessibility,” said Cool Cats Co-founder Evan Luza. “Even though we’re in a bear market, it is a great time to be in Web3 and an even better time to build.”
Within the sports arena, NFT collection the Chibi Dinos expanded their ecosystem by partnering with NBA players PJ Washington, Bobby Portis, and Terance Mann as brand ambassadors during the conference. Chibi Dinos is launching a play-to-earn game enabling players to make predictions on live NBA games to earn HOOP coins and limited edition NFTs.
The Bored Ape Yacht Club, the largest NFT collection by market cap, had a strong presence at NFT NYC 2022, as the community held its second ApeFest during the conference. The event was exclusively accessible to holders of the Apes and Mutants BAYC NFT collections and took place at New York City’s Pier 17. ApeFest featured appearances and musical performances from Jimmy Fallon, Amy Schumer, Timbaland, Eminem, Snoop Dogg and others.
These activities undertaken by collections to reward their community members are intended to support rising floor prices, the lowest price that a unit in a given collection can be purchased, and encourage broader adoption of NFTs. Cooltopia was widely regarded as one of the highlights of the conference, and the average trading price of a Cool Cat increased 80% from 3.6 ETH the week before the event to 6.6 ETH the week after it. Similarly, ApeCoin, the BAYC’s governance token, increased 52% from $3.37 the week before ApeFest to $5.13 after the event took place. However it still remains down 87% from its all-time high in April.
By producing multimedia content and building household name brands, NFT collections ironically may resemble more traditional media companies such as Disney. The holders of the underlying tokens and NFTs associated with collections that are able to establish lasting consumer brands stand to capture the upside of the growth of these nascent brands.
However, investors still need to be discerning about the projects in which they invest. For instance, not all NFTs do not provide the same degree of investor protections and commercial rights and some rights may not transfer during a resale. Additionally, with this much hype in the space, it is important to avoid falling for copycat projects or stolen NFTs. Just this week, Yuga Labs, creators of the BAYC and who also purchased the IP rights behind CryptoPunks, the original NFT collection filed a lawsuit against Ryder Ripps alleging that he illegally created identical replicas of popular collections, siphoning off revenue from their legitimate owners.
Investors looking to gain upside exposure to emerging Web3 brands would do well by seeking collections activating culture, growing their communities and establishing everlasting global consumer brands.
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