On New Year's Day 2023, Moutai launched a digital world Xunfeng, a 3D Moutai town, in which you can win digital collections by answering questions and doing tasks to accumulate Xuntai value, and with digital collections, you have the opportunity to apply for 2499 yuan a bottle of Rabbit Year Moutai wine.
This is like a whirlwind in the silent digital collectibles market, and players who have been lying flat for a long time are excited again. It is said that Xunfeng exceeded one million downloads within 38 hours of its launch, and the number of users reached 1.82 million within 5 days of its launch.
I went up to take a look, but it was a simple game, the gameplay was very boring, the digital collection was actually dispensable, and everyone went for Moutai. However, large enterprises and brands such as Moutai use digital collections for marketing with such great momentum, which is also a glimmer for the sluggish digital collection market.
I experienced it in the wind
At the same time, on January 1, the "China Digital Asset Trading Platform" was established and announced that the trading varieties included digital collections; On January 3, the Shanghai Data Exchange announced its official operation. In the eyes of many digital collection practitioners, this is a signal for the entry of the national team and the clarity of secondary transactions.
China's digital collections emerged before the Spring Festival in 2022, quickly heated up to fiery madness in the first half of the year, and plunged into the cold winter in the second half of the year, experiencing a bull-bear cycle of ice and fire in just one year.
During the year, the compliance issues of secondary transactions hung over the industry like a sword of Damocles, and some well-known problems of the alliance chain made the barbaric growth of the digital collectibles market fragmented and distorted at the same time.
In March last year, I published an article entitled "
Crazy digital collectibles, don't go down the path of P2P and ICO!
I am afraid that it is the first media to give this industry an early warning. Recently, I had in-depth exchanges with several senior people in the digital collection circle, including the CEO of the digital collection platform, the first wave of top players, community operators and crypto artists, and I tried to restore the current real panorama of China's digital collection market, analyze the core issues, and predict the development trend in 2023.
This article consists of four parts:
1. Is the market in the end?
2. The investment logic of the head player
3. Why are there no blue-chip projects?
4. Go to the metaverse
Is the market the end?
The first half of the year is crazy, and the second half lies flat or even rotten; Many platforms ran away, and countless collections went to zero. ——This is the development trajectory of China's digital collections in 2022, and the trend is basically the same as that of foreign NFT markets.
The global NFT transaction situation in the past year
According to Forechain statistics, in the first half of 2022, the global NFT transaction volume was $10.094 billion, of which the Bored Ape issued land otherside on May 1 reached a peak.
In May, Terra/luna collapsed, Three Arrows Capital went bankrupt in June, and external factors such as the US interest rate hike plunged. In the second half of the year, the NFT market went all the way down, with a total transaction volume of only $2.547 billion from July to November.
In China's digital collectibles market, only the circulation of the primary market can be tracked at present.
According to the statistics of Zero One Think Tank, the circulation of China's digital collection market has exceeded one million since January 2022. It reached its peak in May, with a monthly circulation of 4,968,500 pieces and a circulation amount of 240 million yuan.
China's digital collection platform is divided into whale scout and "other", which is the consensus in the industry. According to statistics from Zero One Thinktank, as of June 2022, China has issued 15.36 million digital collections with a circulation of 653 million yuan, of which AntChain ranks first with 8.57 million pieces, accounting for 55%.
The circulation of digital collections in China in the first half of the year
Since the first half of 2021, whale scouts, who were still called ant fan grains at that time, took the lead in releasing two Dunhuang skins, and have since stood at the center of the digital collection stage. Cultural relics pictures, 9.9 yuan/19.9 yuan price, 10,000 copies, whale scouting has also laid the mainstream play in China's digital collection market.
Although Whale Scout is only allowed to be transferred gratuitously after half a year, its digital collection has been in demand due to Ali's background and traffic advantages. In the first half of 2022, especially during the peak period in April and May, the collections on whale scouts ran out of seconds. Many people set the alarm clock every day to go to the whale scout to rob the collection, and some people use plug-ins to grab it.
In addition to whale scouting, there are about one or twenty platforms that have opened secondary trading, which are considered to be the mainstream and backbone of the digital collection platform, including Unique Art, Red Hole Technology, iBox, Digital Collection China, etc., they either bring their own secondary markets or cooperate with local exchanges to gather a large number of heavy users of digital collections.
In the first half of 2022, the digital collections issued by these platforms are also seconds, and they all have their own star projects, such as the only "crazy eater" issued by art, with a market value of up to 200 million to 300 million yuan. The price of the "Wild Imagination" issued by several collections in China, AIGC works based on Xu Beihong's licensed paintings, also doubled in price. iBox is rumored to have a maximum daily trading volume of 1 billion yuan during the peak period.
The issue price of digital collections in the first half of the year
The market changed sharply in the second half of the year. First, the global crypto market plummeted, and the cold gas also spread to China; Then, in August, the Phantom Nuclear withdrawal triggered a wave of industry-wide returns and rights protection, which hit investor confidence; At the same time, new competitors are pouring in.
According to incomplete statistics from Zero One Think Tank and Forechain, from 2019 to January 4, 2023, the number of domestic digital collection platforms reached 2,449. Among them, 996 new platforms were added in the first half of 2022 and 1,274 in the second half of the year.
In the saying of many people in the circle, demons and monsters have come in, and there is no bottom line. Some platforms draw a pie for users, promising a lot of rights and interests but not honoring them; Some came up to send a wave of collections, circled millions and ran; Some platforms say that they can't continue to operate, and only give users a refund of 5-10%; All kinds of capital disks, rat warehouses, playing missing under various names, planning to turn against the boss and run away completely, and all kinds of bloody stories are staged every day.
The price of digital collections has plummeted, and star projects have also fallen below the issue price. Platforms have had to reduce circulation or suspend the release of new projects.
Wang Pengfei, CEO of Shuzang China, revealed that the company's monthly circulation in the first half of the year was still six or seven million yuan, which dropped to one or two million in the second half of the year, and recently even fell below one million yuan. The number of copies issued for a single product is no longer 10,000, but reduced to a thousand, or even a hundred.
After half a year of suffering, Wang Pengfei believes that the market is being cleared, and for many platforms, it has been the end. Whale scouts also began to sell out, and on January 3, whale scouts released a collection that sold only a third on the first day. Wang Pengfei believes that when whale scouts continue to sell for several weeks, the market really bottoms out.
The investment logic of the head player
When the tide goes out, who makes money investing in digital collections?
The peak number of users of digital collections in China is about 5 million, and the number of users attracted by free distribution by enterprises is about 78 million. Some people have done an analysis, 80% are post-90s, including many college students, and even minors. But now, there are probably only a few hundred thousand active users left.
Netizens' price preference for digital collections Source: Sina
The first wave of seed users of digital collections have experience in the currency circle, and the head of Yuanyi Village is one of them, who started buying Bitcoin a decade ago. In September 2021, when Ant Fan released the Hangzhou Asian Games torch, the village chief felt that the domestic opportunity had come and devoted himself to the digital market.
He also gathered the first group of users who entered the digital collection market at that time to set up a club, about 800 people, including programmers, lawyers, designers, civil servants, etc., all understand blockchain, understand technology, enter the club need to hold positions to verify capital, are all head players with a certain amount of digital collection positions.
The village chief set up a group on DoDo, a social platform where the web3 community gathers, with 12,000 members as of January. He and his community share various posts related to the collection on DoDo every day, including the latest news of the industry and platform, free airdrops, popular collection news, and related tips. The goal of the village chief is to be the first village in the metaverse and lead everyone into the metaverse together.
The village chief said that he missed 2021, when there were few digital collection platforms, except for whale scouting, phantom core, and later several listed companies were doing it. At that time, digital collections "can be bought casually with our eyes closed, as long as the platform dares to send it, we dare to grab it, only up but not down".
Later, there were more and more platforms, and the village chief and club members analyzed and discussed together every day, including the background of the platform, whether the chain worked, whether the IP had value, and also checked the company's equity structure and made various background adjustments.
The village chief's investment strategy is: only buy the first starter, do not touch the second level. Among the many digital collections, he is more optimistic about copyright and rights and interests.
In mid-February 2022, the digital collection market exploded, and the digital collections bought for a few dollars rose to thousands, tens of thousands, or even hundreds of thousands in 2021. The village chief said that his club members easily hold millions, and his positions can be as high as tens of millions, and "selling one at random is hundreds of thousands."
But the first release can no longer be grabbed, because many new users have poured in, first fried stamps, fried shoes, fried tea, and then did training, played private domain traffic, and specialized in Internet wool, all came in.
Not only the first release, no matter any platform and any collection, the first launch is a second to the end. In order to buy the whale scout's collection, the village chief called fifty or sixty people every day to go up the alarm clock to help him rob it.
The village chief also has an investment rule: buy where no one cares, sell when the crowd is buzzing. As China's first wave of currency circle players, the village chief was still quite alert to the madness of the digital collection market in the first half of the year, and began to remind everyone to drop their pockets.
As the second half of the year entered the bear market, the price of digital collections plummeted, and although the village chief and his community members took the lead in cashing out some of the collections, the remaining collections were either covered or priceless. The collections that the village chief stole on the whale scout were also basically trapped, after all, investment is risky.
Players noticed that whale scouts were also starting to sell slowly
But he feels that after December, the market has almost adjusted, and many platforms that cannot be supported have been out, and now they have reached a safer bottom and can start layout.
The village chief admitted that although he cashed out some of his collection, he kept buying them at the same time. In fact, China's digital collections began to germinate in the first half of 2021, when the purchase frequency of village chiefs was measured on a weekly basis, rising to days in the second half of 2021, going crazy to hours during the outbreak of the big bull market in the first half of 2022, and falling to monthly units in the second half of 2022.
The owner is the co-founder of Motoichimura and the first wave of digital collectibles players. As an employee of a web2 Internet company, he is a typical technical person, focusing on analyzing the strength of the chain behind digital collections, including the capital structure of the chain operating company and the stability of the company's technical reserves, which must be studied one by one, and is jokingly called "value investors in the digital collection world".
In the investment logic of the store owner, the "biological son" of the chain, that is, the digital collection platform hatched by the domestic alliance chain or public chain, such platforms are inextricably linked with the chain operation company in terms of personnel and capital structure, the operation is relatively stable, the price of the collection is relatively firm, and the probability of the platform running away is extremely small.
In the owner's view, the core value of digital collections is metadata, and after the blockchain precipitates the data, more can be mined from it. It is an affirmative power tool that shares some behavioral data related to the chain with more people, and you can make a variety of applications based on it, but the carrying capacity is still slowly increasing.
Interestingly, neither he nor the village chief ever worried about secondary transactions. Regardless of whether the platform has opened secondary transactions now, the store owner believes that digital collections as a token are mainly circulated between players and players, and the platform cannot just release new products one after another, and it is only a matter of time before the secondary is opened.
No matter when the policy becomes clear, the top players have a firm belief that the circulation of digital collectibles will come sooner or later. They despise latecomers who only discuss price increases and falls on a daily basis and do not analyze the value of collections.
On the contrary, everyone is worried about whether the market can catch once secondary trading is liberalized. Wang Pengfei estimates that the overall size of China's digital collection market is close to 10 billion, not including whale scouts' collections.
Incomplete statistics of whale scouting circulation
Whale scouting is an alternative presence whose collection has not really entered the market, making it difficult to estimate its size. The owner said that after a collection is issued, it must be tested by the secondary market, even if it is circulated once, the floor price is stable, multiplied by the quantity, before it can be included in the market. And the circulation of whale scouts is so large, once the secondary transaction is released, with the current number of users, it is a very terrifying thing.
Why are there no blue-chip projects?
More than 2,000 platforms, tens of millions of digital collections, unfortunately, there is no explosion, no project is really popular, let alone the birth of the Chinese version of the bored ape.
Wang Pengfei sighed that because there are too many platforms and the market is too fragmented, it is still difficult for good projects to get out of the platform, let alone propose the circle.
The popular digital collections in 2022 are mainly copyrighted products, so there are also many cases of indiscriminate issuance of large IPs, as long as you give money, 300,000, 500,000, any platform will be issued, and basically they are all bought and sold with a hammer, and they do not participate in operations. Wang Pengfei believes that IP does not cherish its commercial value. One IP has appeared in the market with dozens of series of digital collectibles, also losing its scarcity.
For some digital collection native IP, the market was hot in the first half of the year, and the money was too easy to earn, and there was no need to be a community; In the second half of the year, the market was too bad to invest in the community.
As for art, it is not popular in China's digital collection market, and the real artist has not yet ended. Wang Pengfei believes that this is the reason why no digital collection in China has really been killed.
And the village chief believes that the foreign NFT market is dominated by IP, while the domestic platform is king, and the entry threshold of the platform is almost zero, anyone can do it, resulting in too many platforms, each platform sings its own one-man show, good projects do not have a big theater, and it is difficult to be known by everyone.
In addition, timing is also important, bored apes caught up with Facebook to change the name of Meta, and a project with a much better time may not be able to catch fire, and China has not yet waited for this opportunity.
2022 Global NFT TOP10
"The blue-chip project in everyone's mind must be the pioneer of a certain style, category or model, or the first adopter of a certain technology or a certain protocol." The owner said that for example, Azuki, a blue-chip project that is popular in the global NFT market in 2022, first introduced the anime style to NFT, but when it is made, you also feel that there is no threshold, just a few pictures.
Why is the boring ape on fire, the shopkeeper thinks, in fact, it inherits pop art in art. In the era of large-scale industrial production, the Coca-Cola bottles that everyone got were exactly the same, and in the exact same Coke bottles or Marilyn dream avatars, painted with different colors, so that there were slight differences, forming an artistic trend, and the bored ape followed this trend of thought and further did electronicization.
In the past, the holders of artworks were separate from each other, and those who held the definition and discourse of art commented on whether the work was good or not, and those people had a small circle, but relatively hidden, high-end, hidden behind the scenes. If defining and commenting on things is a privilege, information technology has shifted that privilege down to the holder, and this downward shift happens to happen first in the art world.
Bored apes issued 10,000 avatars, and the actual holders may not be that many, because some people hold many bored apes, some of whom are celebrities themselves, holding the right to speak in the last era, making bored apes like tigers.
Can there be blue-chip projects like Bored Ape in China?
"Something that is created is valuable, and even a small innovation will be very generous to the digital market." The owner said, but the domestic digital collection market is indeed very fragmented, because of policy restrictions, the competition is still very rewarding, and has not experienced the kind of full competition like foreign countries. The foreign market is naturally grown, and although there are many scammers, the project that survived after fierce competition was agreed upon by everyone.
But in the view of crypto artist Zoojoo, there are no blue-chip projects in China, first of all because the cost of digital collections is distorted, with platforms taking 40%, chains taking 10%, and IP and content production only 15-25%. In foreign countries, everyone can issue NFTs, except for the GAS fee, there is no cost, everyone is an artist. Such a distribution of benefits, the enthusiasm of the IP side can be imagined.
Secondly, because the alliance chain is closed and the data is not transparent, the situation of price manipulation by the project party is very serious. Many project holders may be robots, only a few or even one real user, the project side cuts this user. Although foreign NFTs, including Bored Ape, are also suspected of manipulating prices, the data of the public chain is public, and investors can calculate and analyze.
In addition, Chinese projects are aesthetically unsatisfactory, and many of them are from third-rate painters.
At the same time, he believes that there are many Chinese, and real artists, big brands and web2 giants have not yet ended, and there is certainly a chance to run blue-chip projects based on the alliance chain.
Towards the metaverse
Despite the mixed mud and sand, there are still some remarkable innovations in the digital collection market in 2022, such as Xingfei Cat's cooperation with Xiaoice to add AI interactive functions to avatars; For example, Baidu launched cross-chain digital collections, which also have certain breakthroughs in the pattern of alliance chain fragmentation; There is also the recent cooperation between Moutai and NetEase to launch Xunfeng, which actually creates a gamified application scenario for Shuzang.
Wang Pengfei believes that in 2023, digital collections will have more applications in four major areas: metaverse space, art, cultural tourism, and brand marketing. In 2022, DataCollection China strategically cooperated with Realworld, a VR metaverse space, and issued more than 3 million digital collections. At present, it is also exploring the use of wallets as an intermediate carrier to connect the digital collection platform, and the digital collections issued by the platform can enter the meta-universe in the future, and the digital assets generated by the meta-universe can also enter the digital collection platform for circulation.
My whale scouting space
Zoojoo proposed the concept of moving directly from digital assets to the metaverse, he is building an NFT project called CosmoChamber, where four artists put their oriental-style paintings in a space, using combined smart contracts to generate interconnected metaverse spaces, and finally create a thousand-story tower. The program is open and the number of participating artists has now increased to 24.
Zoojoo has observed some innovations in the foreign NFT market, such as the new protocol ERC4907, leasable NFTs, which increase the number of users, use time, and can make leasable NFTs. For example, avatars that represent status such as Bored Ape and AZUKI are already expensive and cannot be bought, but you can rent one and pay by the hour. In addition, NFTs will also have more innovation on smart contracts.
The Odyssey, an NFT project that Starbucks is testing in the United States, is also attracting attention, with participants earning trip stamps through interactive activities, which are NFTs created by Starbucks co-artists, and holders can enjoy some benefits, such as getting free coffee, visiting coffee farms, etc. NFTs can circulate freely among Starbucks members.
Starbucks has 28 million members in the U.S. and 50 million worldwide, and Zoojoo believes that Starbucks can build a community through NFTs and drive the Starbucks culture forward through the community. With Starbucks' existing membership base, Odyssey is likely to soon surpass existing web3 apps like MetaMask.
It can be seen that Moutai Xunfeng wants to imitate Starbucks Odyssey, and these innovative gameplay of foreign NFT must soon be copied to the Chinese digital collection market.