Analysis of the Reasons Why PFP NFTs Occupy 70% of the Market Share

PFP (Profile Picture NFT) is one of the earliest applications of NFTs, aimed at providing users with personalized images for their online identities. Besides visual appeal, what other factors have driven their success? This article will explore this issue through several case studies.

Among the various NFTs on Ethereum, PFP accounts for 70% of the total market value, generative art ranks second with 13.5%, and virtual land ranks third with 8%.

The popularity of PFP can be attributed to two factors: ease of understanding and the hype effect.

Just news and announcements can excite people and lead to a rise in the floor price. This phenomenon has attracted the attention of traders and collectors. In April 2021, BAYC launched a series of successful PFP projects, after which many new projects attempted to replicate their successful model.

BAYC's dominant position in the PFP ecosystem is remarkable, with a market value more than four times that of its substantial competitors combined. This success can be attributed to several factors, including its strong community-building capabilities.

In addition, BAYC has attracted the attention of several celebrities, such as singers, actors, and sports stars, which undoubtedly helps to increase engagement and awareness among the general audience.

However, the reasonableness of the price ultimately needs to be supported by fundamental factors, rather than just relying on speculation. BAYC realized this and took active measures to stand out. Therefore, they launched the $APE token and the Otherside project in the first quarter of last year.

Subsequently, various PFP projects began to create unique ecosystems, hoping to stand out in the competition. The top PFP teams also attracted strong funding support from well-known venture capitalists (except for Azuki).

Azuki has successfully established a clear, community-centered ecosystem, and the launch of Hilumia is likely to tie all these elements together. Hilumia may be a virtual hub with gaming elements that visually showcases the content collaboratively built by the team and the community.

RTFKT focused on multiple airdrop activities last year, with each airdrop targeting different application scenarios to support their narrative. This year's key project may be Animus, which will connect all elements together and open the next phase of their legend.

Doodles has just released their DoodleMap, clearly showcasing their intention to become a major brand in entertainment and lifestyle, a brand that will transcend Web3 and penetrate mainstream consciousness.

2023 may be the year for Doodles to continue expanding into various vertical entertainment fields, including games, music, animation, etc., with the goal of creating a cultural craze that brings demand for the Doodles 2 series.

The success of PFP projects will not solely depend on airdrops and other financial incentives. It requires building emotional connections and engagement with the brand through storytelling and other unique value propositions.

User retention is important, but how to acquire new audiences and establish new revenue streams is equally important. These projects have built strong communities in Web3 and are gaining momentum for their exciting future roadmaps.

2023 will be a pivotal year as these projects strive to break out of the Web3 circle and expand to a mainstream audience. Although the future is fraught with uncertainty, there is no reward without risk. We look forward to seeing the future development of these projects.