Decoding how PFP NFTs have become latest rage as market value crosses $10B
Since the onset of social media, profile pictures have been key in defining our identities. Perhaps a professional photo on LinkedIn profile, a solo portrait or one with other half, and the list goes on. Interestingly, with NFTs, collectors no longer want to display a self-portrait but to don their PFP (profile pic) NFT. Fast forward, different renowned companies (outside the crypto circle) want a piece of this cake that is valued at over $17 billion.
According to NFTGO, the market value of NFT-PFP exceeded 10 billion US dollars, which is the category with the highest market value among NFTs, accounting for about 56% of the total market value. The graph below showed this impressive growth as compared to other attributes.
As per the collection list below, CryptoPunks and Bored Ape Yacht Club (BAYC) occupy the top two PFP market caps.
Collectibles come at the second spot. Digital collectibles can be bought directly from the company creating them or on NFT marketplaces, where collectors could buy and sell them. Although, the sheer difference between the two remains massive.
Now, PFP NFTs have no inherent physical value other than looking kind of cool. The real value lies elsewhere — the social currency. As per a post on 9 April on Medium, three major behavioral psychology concepts of humanity aid such projects. These are scarcity, social proof, and tribalism.
“The real value of owning a solid PFP NFT project is how it curtails our ingrained psychological needs for social approval, status, and tribalism. For these reasons, projects with sub-par art can get away with selling for hundreds of thousands of dollars because that isn’t the point of buying the NFT.”
Whatever the case, it didn’t stop big emerging firms collecting/adopting more.
Making sense out of this
South Korean automobile manufacturer Hyundai is the latest one to do so. On 18 April, the firm partnered with the Meta Kongz NFT project to create a limited collection of 30 NFTs, launching sometime in May 2022.
Hyundai x Meta Kongz introduces Hyundai Metamobility universe.
— Hyundai_NFT (@Hyundai_NFT) April 17, 2022
Apart from this, luxury brands too have reiterated similar interests. Louis Vuitton doubled down on NFT efforts despite dwindling interest. Like LV, Burberry also released an NFT character for its online multiplayer game, Blankos Block Party.