Why NFT projects with no utility, still succeed
If you grew up in the 90’s, chances are you own a few Pokemon cards.
Did anyone actually know how to ‘play Pokemon’ with the cards?
No idea ¯\_(ツ)_/¯ but they sure were fun to trade.
If you were really lucky (or an extremely forward thinking, master of negotiation, 8 year old), you might have a 1st edition Charizard.
It may have sat in a drawer for years, collecting dust.
But people like Logan Paul and Gary Vee have helped to make those 1st edition collectibles seriously valuable - as in, Paul bought a rare Pikachu for ~$5.3M last year…
He turned that physical Pikachu card into an NFT, but that’s not where this story is going.
We may be in a bear market, but it didn’t stop a collector from buying CryptoPunk #4464 for 2500 ETH (~2.6M USD) this week.
We thought we’d take this news as an opportunity to talk about why, in a world where utility seems fundamental to the success of an NFT project, a pixelated image of a punk can be worth $2.6M.
CryptoPunks were the first NFT collection ever to be created on the Ethereum blockchain, back in 2017.
When the project first launched, Punks could be minted by anyone, with zero gas fees.
Some Punks have more common traits than others, but overall no two are exactly alike.
There are, and will always only ever be, 10,000 total CryptoPunks.
We don’t know the identity behind the buyer of Punk #4464, but we do know that at the time of writing, they have 24 total Punks.
So if you've been hearing about how 'utility is now vital' in NFT projects, but continue to scratch your head when looking at projects like CryptoPunks - here's the long and short of it:
By being the very first NFT project created on the Ethereum blockchain, just like the first edition Pokemon cards, it’s led to massive demand.
For projects like CryptoPunks, time in market is highly relevant.
They’re a scarce asset and that have become a symbol of wealth, to those ‘in the know’.
