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Creators of best-selling internet collectibles have responded to a crash in the value of crypto and digital assets by seeking new revenues, such as using cartoons to sell real-world products and create entertainment franchises.
Digital items known as non-fungible tokens burst into mainstream culture last year as people snapped up animal collections, including Bored Ape Yacht Club, Cool Cats and Pudgy Penguins.
Celebrity endorsements and social media hype helped encourage people to spend billions of dollars to acquire NFTs from marketplaces such as OpenSea.
But the market has plummeted since April after being hit by a sell-off in the broader cryptocurrency market, which has been rocked by a series of high-profile scandals such as the collapse of crypto exchange FTX and the TerraUSD stablecoin in May.
“If sales are not predictable, consistent [and] recurring revenue, [then] you have to figure out how are you going to diversify your revenue streams and expand,” said Drew Austin, co-founder of Knights of Degen, a sports-themed NFT project and one of the investors behind crypto group WAGMI United.
Some analysts are sceptical that NFT makers will create successful businesses beyond selling digital art. “The fundamental model of NFTs didn’t work,” said Claire Enders of Enders Analysis. “It was a bubble that has burst and is not going to happen again.”
Doodles, a leading NFT project, recently hired musician and producer Pharrell Williams as its chief brand officer, who has used his music to produce live animations of the Doodles characters. The group is working on a video series and an album.
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