Analysis of the Reasons Why PFP NFT Dominates the Market

PFP (Profile Picture) NFTs, as one of the earliest applications of NFTs, play an important role in the digital identity space. In the Ethereum NFT market, PFPs account for 70% of the total market value, far exceeding other types. So, what drives the widespread popularity of PFPs?

The answer lies in the fact that the PFP concept is easy to understand, combined with the market hype effect. Just through news and announcements, it can stimulate people's excitement and drive up the floor price, thereby attracting the attention of traders and collectors.

In April 2021, BAYC launched and achieved great success, subsequently leading to a surge of new projects attempting to imitate it. BAYC's dominant position in the PFP ecosystem is quite remarkable, with a market value more than four times that of its main competitors combined. This success can be attributed to its strong community-building capabilities, as well as attracting the attention of celebrities such as Justin Bieber, Steve Aoki, and Stephen Curry, which increased engagement from the general audience.

However, relying solely on hype is not sustainable in the long run; it also requires fundamental support. BAYC realized this and actively launched the $APE token and the metaverse project Otherside to stand out. Other PFP projects have also created unique ecosystems in the effort to differentiate themselves. Top PFP teams have attracted funding support from well-known venture capitalists.

Azuki has adopted a community-centric strategy, building a clear ecosystem. The upcoming Hilumia project is likely to be a virtual hub that integrates game elements, visually showcasing the content created collaboratively by the team and the community.

RTFKT focused on multiple airdrop activities for different applications last year to support its narrative. This year's key project Animus is expected to connect all elements and open a new stage of development. The team is committed to interactive storytelling and hints at a significant offline event to be held at the end of the year.

Doodles recently launched DoodleMap, showcasing its ambition to become a cross-border entertainment and lifestyle brand. By appointing a new CEO, collaborating in the music industry, and acquiring an animation studio, Doodles is officially moving towards multi-chain development and focusing on expanding to a mainstream audience.

Looking to the future, the success of PFP projects will depend not only on airdrops and financial incentives. Establishing emotional connections and engagement with brands is equally important, which needs to be achieved through storytelling and unique value propositions. While user retention is certainly important, attracting new audiences and exploring new revenue streams is equally crucial.

2023 will be a critical year for these projects to break out of the Web3 circle and expand to mainstream audiences. Despite facing unknown challenges, as the saying goes, "Nothing ventured, nothing gained." We look forward to these projects achieving success in the future.