NFT developers diversify into real assets to generate new income

Creator of the best-selling internet collecting objects reacted to the loss of value of crypto and digital assets by looking for new income, such as

digital objects that are known as non-funny tokens broke into the mainstream culture last year when people bought animal collections, including Bored Ape Yacht Club, Cool Cats and Pudgy Penguins.

celebrities and social media hype contributed to encouraging people to issue billions of dollars to acquire NFTs from marketplaces such as OpenSea.

But the market has been broken down since April after it has been hit by a sale on the wider cryptocurrency market, which was shaken by a series of top-class scandals such as the collapse of the crypto exchange FTX and the StableCoin Terrausd in May.

Between January and March 2022, more than $ 19 billion was issued for NFTs-which, according to Chainalysis, is the majority of this year's sales of $ 36 billion. Since then, monthly expenses in November have broken down by more than 87 percent to just over $ 442 million.

The number of active NFT buyers and sellers has now dropped to a little more than a third of their high in January 2022. NFTS are also much less "shaped", with the number of new NFTs in the Ethereum blockchain decreased by almost 60 percent, according to research group Nansen.

This has led to the manufacturers of popular NFT collections search for expanding their brands into real investments, e.g. B. the sale of products that are not linked to the so-called blockchain technology, in which transaction records are stored in a decentralized digital main register.

"If sales are not predictable, consistently [and] recurring income, they have to find out how they want to diversify and expand their sources of income," said Drew Austin, co-founder of Knights of Degen, an NFT project with sports theme and one of the investors behind the Kryptogroup Wagmi United, the English bought football club Crawley Town this year.

Some analysts are skeptical that NFT makers will build successful companies that go beyond the sale of digital art. "The basic NFT model didn't work," said Claire Enders from Enders Analysis. "It was a bubble that burst and will not appear again."

doodles, a leading NFT project, recently hired the musician and producer Pharell Williams as Chief Brand Officer who used his music to produce live animations of the Doodles characters. The group works on a video series and an album.

"We are going in.. In the next few years there will be a somewhat slower economic environment, and what really gains in these times is the entertainment," said Julian Holguin, Managing Director of Doodles.

"Although entertainment is extremely saturated and the attention of consumers is very fragmented, we [can] build really great stories that appeal to people and just conjure up a smile on people's faces."

The former Billboard manager has used his contacts in the music industry to work with top-class talents and work on diversifying the intellectual property of doodles in live events, music streaming and physical goods.

pudgy Penguins is another project that has concluded contracts for the production of cuddly toys and children's books based on its NFTS and returns some of the profits to the owners of the tokens. It is one of the few collections in which the average price of its NFTs in December more than tripled.

"Every generation had her great penguin IP from Pingu from Pengu to Happy Feet.

Knights of Degen chose a rather scattered approach in his investments, which includes an American football team from the Minor League, meetings with celebrities, IPA beer and an upcoming line of sauces on vodka basis.

The group said it was inspired by Disney's business model. "Disney started with the development of Mickey Mouse, and from then on they have the amusement park, the shows, the films, the merchandise, the toys and all these different things. We want to take this similar way," said Austin.

Yuga Labs, the parent company of some of the most popular NFT collections such as Bored Ape Yacht Club, Cryptopunks and Measpin, has launched a variety of products that use the content of its brands.

yuga gives away IP rights with its tokens, which means that the owners of the NFTS can use the images connected to the tokens as desired without the knowledge or permission of the company. This has led to a flood of companies that develop the associated Yuga products: everything from a burger restaurant to custom-made Tiffany supporters.

"From day one, the community was enabled and encouraged to commercialize its APE-IP, and almost immediately we began to see how Apes appeared on sharp sauces, snack cars, in music videos and more. The decentralization of intellectual property is a powerful tool for building communities," said Yuga Labs.

Yuga Labs was one of the greatest beneficiaries from last year's increase in interest in NFTS.

The group collected $ 450 million in a financing round under the direction of Andreessen Horowitz, which rated it at the beginning of this year with $ 4 billion. In the meantime, in April it generated $ 300 million through the sale of NFT "documents" for up to 55,000 parcels virtual country in "Otherside", its upcoming Metaver game.

The Otherside Country Collection remains one of the most traded on the NFT marketplace OpenSea, but the average price for a certificate on the Otherside has almost halved at around $ 3,300.

Projects associated with Yuga images have made it possible for the brand to spread, as well as several celebrities, including Snoop Dogg, Justin Bieber and Madonna, who post their comic monkeys on social media.

YUGA is faced with a class action lawsuit in which the start-up is accused of working together with celebrities in order to "artificially inflate and distort" the prices of the NFTs. Yuga Labs contested any misconduct.

In view of the dwindling trust in crypto and the falling NFT values, some analysts are skeptical whether the brands can prevail in the real world.

"As soon as there has been a separation between the evaluation and the product, you can never become a Disney brand," said Claire Enders.