NFTs: The Next Wave
This post originally appeared on Forbes.
If you blinked you might have missed it, but over the past quarter NFT trading volume surpassed $10.67B, jumping 704% from Q2 to Q3 and over 38,000% year-over-year.
The first half of the year saw the rise of NFTs as a series of high-value 1-of-1s, with Beeple’s collage, Everydays: The First 5000 Days, selling for a record-breaking $58 million. Before NFTs, Beeple hadn’t earned more than $100 for a single print.
What’s fueling the recent surge is not 1-of-1s, but rather large-scale, 10k projects (hereafter described as “10ks”) designed to increase a project’s distribution, enable low-cost onboarding of new entrants into the space, and build a meaningful community. The value of utility baked into smart contracts has also begun to be defined through larger scale projects.
There will always be a place for meaningful (and expensive) 1-of-1 projects, but the value of 10Ks should create a new era of innovation for creators of all sizes. The future of NFTs lies in their utility and community, and some of the biggest creators are starting to leverage the true value of NFTs.
We have seen what’s possible when creators are able to build hype, but the next wave of innovation will lie in a team’s ability to execute, not speculate.
Artists Are Leading the Way
Brendan Murphy’s Boonji Project is a perfect example of what is possible when a project challenges the realm of possibility in generative art, utility, and community. Boonji Project launched on October 21, 2021, and through its Dutch auction, sold out in one of the biggest primary on-sales of all time at an average price of .42 ETH ($1727 USD). In less than 4 hours, the project has already seen over 1,000 ETH in transaction volume.
To best understand this project’s success, it’s important to consider all of the factors that have gone into building the trust of the community.
The current NFT market is saturated with profile picture projects featuring cute animals and pixelated characters, with most traditional artists focusing on 1/1s and individual pieces.
Most of these projects have marketed themselves due to their roadmap, with many promising NFT holders access to Metaverse games, real-life experiences, merch, and future drops. Others have leveraged the uniqueness of their community as the source of their collection’s value, treating the individual pieces within the collection as digital collectibles to be swapped based on rarities.
These types of projects must step outside of the art because those behind the project are either not very well known or are not artists themselves. These projects experience severe volatility because most of the time very little is known about the artist or their commitment to the project.
Boonji turns this on its head by making its artist, Brendan Murphy, the focal point of the project. Brendan has been an artist for over 20 years, and his sculptures and paintings have been collected by the likes of Steph Curry, Serena Williams, Warren Buffet, and more.
There is little doubt that Murphy is dedicated to this project; he’s spent most of his creative life building the centerpiece of this collection. The backgrounds and many of the assets used in the generative process are all taken from his previous works, creating a beautiful amalgamation that is undeniably his.
Utility: NFTs as a Medium
While the NFTs as art would accrue in value on their own, Boonji Project is baking utility into the NFTs, showering holders with $5 million worth of physical art, merch, and even a festival in Antigua.
“Funnily enough, the Boonji Spaceman series is not about space which people find surprising,” says Murphy. “It’s about the step the spacemen are taking. The step into the unknown — that’s what the Boonji Spaceman series encapsulates for me.”
Murphy is by no means the first traditional artist to use NFTs as a medium. Danny Cole, a young visual artist from New York City, has leveraged his life’s work to build Creature World, ultimately delivering the Creature’s journey to his community. Artists like Danny and Brendan are imbuing jpegs with utility and driving innovation forward, and the value of their contributions has not gone unnoticed by their incredible communities.
In a matter of weeks, Boonji Project has grown its Discord to 135,000 people despite only offering 11,111 unique NFTs. The team has quickly amassed a vibrant, active community that has encircled Murphy, bringing new eyeballs to his work and amplifying other creative endeavors.
What has made the community build so successful? Beyond what has been mentioned above, the game mechanics employed as the community has grown have been nothing short of spectacular. From the beginning, the team has promised that those who engage with the project the most would be rewarded, and the community has responded beautifully.
More than 12 people have gotten tattoos of Boonji. Hundreds of memes have been created by the community in an attempt to be recognized and added to the “whitelist,” a list that confirms that they will be able to mint at face value (and ultimately avoid a gas war). Derivatives are already being created by the community in appreciation of the IP that defines the project. They even dubbed the night before the mint “Boonji Eve,” gathering en masse to celebrate what will be a massive cultural moment in the NFT community.
What the Next Wave Looks Like
It’s difficult to argue that there isn’t a level of saturation in the 10k space, and there will be a time where many of these types of projects are no longer viable for anonymous teams. The industry is entering a phase in which its most successful projects need to transition beyond hype and into an execution phase.
This process will only accelerate as more digital artists, musicians, athletes, and other creatives build their own projects. What will come next is a series of Web3-enabled fan clubs that will give meaningful experiences to those willing to hold onto NFTs, and a new era of creativity and innovation as this new medium is explored. It’s a matter of when, not if, and those that seek to enter the space meaningfully and push the boundaries of what is possible will find an incredible community is at their fingertips.