The fall of Ethereum NFT and the rise of Bitcoin NFT

Article author: Peng Yong & Block unicorn

In the Web3 industry in 2021, NFT is often called the digital asset Renaissance, starting a trend of combining digital art and encryption technology. Attracting digital artist creators and traditional artists to integrate into the innovation wave of Web3, it brings new possibilities to the NFT art field.

This year, NFT narrative exploded. February 25th to March 11th was an epic beginning. The most famous NFT art work in history was put up for auction at Christie's. The work created by Beeple was called "Every Day: The First 5,000 Days", and the final transaction price was: 42,329 pieces. ETH (worth $69.34 million at the time).

The transaction price shocked everyone. One picture cost 69.34 million U.S. dollars, triggering profound thinking about the digital art market around the world. Since then, the news of this NFT auction event has spread to every corner of the world. Everyone is interested in NFT and hopes to own one.

NFT takes root in Ethereum

In Ethereum On this fertile soil, NFT can take root and sprout, becoming a shining pearl in the field of blockchain. Ethereum's smart contract function provides a solid technical foundation for the development of NFT, allowing digital assets to exist on the blockchain in an irreplaceable and unique way.

Crypto Punk, launched in May 2017, is one of the pioneers of NFT. It has a long history and unique punk pixel avatar. When it was first launched, Users with an Ethereum address get it for free. These pixelated characters are not only representatives of NFT art, but also pioneers of the future prospects of NFT. The success of Crypto Punk has injected new vitality into the NFT market, attracting rapper Jay-Z (Shawn Carter), football player Odell Beckham Jr, and co-founder of the e-sports empire FaZe Banks, etc., setting off the first wave of celebrity response The chase for NFTs.

Ethereum's NFT market has begun to expand from Crypto Punk to include crypto art, virtual real estate, identity certificates, tickets and other fields. Artists display and sell their works on Ethereum through NFT, while encrypted digital collectors also obtain unique digital assets through this platform. The formation of this ecosystem has laid the foundation for the prosperity of NFT on Ethereum.

As the NFT market continues to develop, Ethereum, as its main supporting network, will continue to witness the emergence of more emerging NFT projects and cryptographic artworks. This The process also makes people look forward to the future exploration and innovation of NFT.

The rise and fall of Ethereum NFT

After Crypto Punk , we have indeed seen more radical NFT projects that further expand the influence of Ethereum, among which the most representative projects are Bored Ape Yacht Club (BAYC, also known as Bored Ape), Azuki, Doodles, DeGods, etc.

Rise

Speaking of the real rise of Ethereum NFT , we have to mention BAYC, which plays the most critical role in promoting the development of NFT. The rise of Bored Ape Yacht Club (BAYC), a latecomer, marks a peak in the Ethereum NFT field. BAYC, known as the "King of NFT", is not just a series of unique NFT collectibles, but more like an NFT art revolution.

BAYC’s success lies not only in the art itself, but also in its clever social media marketing strategy. Discussions and sharing about BAYC on social media made it famous overnight, attracting global attention. Such as Justin Bieber, Neymar Jr., Snoop Dogg, Madonna, Shaquille O'Neal, Eminem, Jimmy Jimmy Fallon, etc. In addition, there are also business elites from all walks of life who own Boring Ape NFT. Sports stars, entertainment stars, and business tycoons have attracted global attention to NFT and BAYC, and created greater space for the huge BAYC empire.

After BAYC became the king of NFT, on March 24, 2022, BAYC’s parent company Yuga Labs announced that it had received US$450 million in financing at a valuation of US$4 billion. This financing is the largest in the history of NFT financing. . The participating institutions are all top venture capital investors, with A16z leading the investment, and Animoca Brands, Google Ventures, Tiger Global, Coinbase Ventures, Adidas Ventures and other institutions participating in the investment.

After financing, BAYC parent company Yuga Labs vigorously acquired NFT pioneer Crypto Punk, so BAYC became a super giant in the NFT industry.

BAYC’s goals have become even more ambitious. Their CEO Nicole Muniz claimed that they will build a “Disney on the Chain” on their new project Otherside. Anyone can create their own rides, attractions, and own these community virtual assets in this on-chain metaverse. You can enjoy certain privileges when spending ApeCoin on Otherside.

Fall

When these great narratives fail to materialize , BAYC's NFT, token (APE), Otherside land and the number of online games dropped sharply and began to become very fragile, and people began to question it.

The floor price of Boring Ape (BAYC) has also begun to fall from the highest price of 153.7ETH to the current 27.79ETH amid doubts. Compared with the highest price in history, it has already dropped. 82%. BAYC's token APE has also dropped from the highest price of 28USDT to 1.7USDT, which is a 93% drop compared to the highest price in history.

Although BAYC's decline has not affected people's long-term expectations for Ethereum NFT, other NFT projects other than BAYC have begun to have cracks with the community.

Doodles

This crack starts with Doodles,  On March 26 this year, Doodles founder Jordan Castro announced on the official Discord that Doodles will develop from an "NFT project" into a leading media franchise company. Jordan Castro said that the more public construction on speculation, the less likely it is to realize the long-term vision, and will not consume any resources to appease those Doodles NFT holders who have financial incentives, and will focus on loyal holders. On the body.

NFT projects usually advocate the principle of decentralization and are jointly constructed in the form of DAO. Doodles founder Jordan Castro privately decided to transform a decentralized NFT project into a franchised media company, which goes against the original decentralized concept.

After turning into a franchise company, Doodles’ economic benefits can completely exclude community members and also ignore the incentives of NFT holders. In terms of decision-making transformation, the decision was made unilaterally by the founder without discussion with the community and governance procedures, without considering the voice of NFT holders. The project became owned by the founder rather than jointly with the community. If you hold Doodles NFT, you will naturally sell your Doodles NFT. After this incident, Doodles was in deep trouble.

Azuki
After BAYC, Azuki is considered an NFT and community full of personality and creativity, and is developing very rapidly. On encrypted Twitter, Azuki’s NFT avatars can be seen everywhere, no less than BAYC and Crypto Punk. Because it has a very experienced founder, zagabond, the founder of Azuki. Before creating Azuki, zagabond created 3 NFT projects, all of which eventually ran away, so he has very rich experience in NFT operations.

When he was operating Azuki, he felt as if everything was under his control. The floor price of Azuki NFT also soared against the wind. Azuki was once considered to be the NFT light of the bear market. The Azuki team, which has gained so much brilliance, will launch a new series of Elementals (NFT) on June 27 this year, with a total of 10,000 Elementals avatars. Through a Dutch auction, Azuki and BEANZ holders will pay a deposit of 2 ETH, using the Dutch The difference between the final price of the auction will be refunded. In just 15 minutes, all the new series of Elementals (NFT) avatars were sold out, earning 20,000 ETH, equivalent to US$38 million.

zagabond led the Azuki team to return with a full harvest and took away 20,000 ETH from the NFT market. Holders who received the new series of Elementals (NFT) found that the quality of the NFT images had shrunk. Because they were no different from the Azuki series of NFTs and only sold for 2 ETH, they aroused the anger and abuse of the community.

The Azuki team’s approach is hugely disappointing. It repackaged and sold low-quality NFTs to community members, which shattered people’s confidence in the Ethereum NFT field and led to The prices of other top NFT projects have accelerated, and this sense of disappointment has also spread to NFTs on other chains.

The NFT community recalls the past, and the three NFT projects once created by the founder of Azuki all ran away.

DeGods

DeGods is an NFT based on Solana The project was later migrated to Ethereum’s Polygon network. After Azuki was a big disappointment, DeGods seemed to regain a little confidence for everyone when all NFTs were plummeting. DeGods NFT bucked the trend and soared to the floor price of 9 ETH, winning the title of Solana's top NFT blue chip.

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The popular DeGods finally followed Azuki's old path and released a new series of NFTs in August this year, using uninnovative techniques to casually modify and resell them to the NFT community.

Summary: They led Ethereum NFT from scratch, provided innovative application methods for the entire NFT industry, and also led Ethereum NFT into the abyss. When the NFT market was in a downturn, some people even shouted the slogan "NFT is dead", which attracted great attention in the industry. It inspired us to think, can the Ethereum NFT method really lead NFT to the bright future?

Ethereum NFT was once brilliant, but now it is facing the dilemma of decline, while Bitcoin NFT is emerging and ready to go.

The rise of Bitcoin NFT

In the NFT market, Bitcoin Frogs, the leading Bitcoin NFT project, showed strong market momentum in November 2021. Its trading volume has surpassed the well-known Bored Ape Yacht Club (BAYC) many times, with the highest single-day trading volume reaching US$4.7 million. In comparison, BAYC's highest single-day trading volume was only US$2.6 million.

BAYC's trend line is relatively flat, as if it has lost its vitality, while Bitcoin Frogs' performance is more aggressive, surpassing BAYC's trading volume many times. This trend It is expected to highlight the growing interest of NFT investors in Bitcoin NFTs. This market performance shows that Bitcoin Frogs is expected to surpass BAYC in the future and become the new favorite in the Bitcoin NFT field.

Data source cryptoslam, Bitcoin Frogs

Data source cryptoslam, Bored Ape Yacht Club (BAYC)

Ordinals background

Everything about Bitcoin NFT, starting from the Ordinals (ordinal) protocol, Casey Rodarmor, the founder of the protocol The Ordinals protocol was invented in December 2022, hoping to create NFT art on Bitcoin and record all the information of the NFT in each Satoshi (the smallest unit of Bitcoin). The birth of the Ordinals protocol also inspired domo, the inventor of BRC20, to invent the BRC20 token protocol (inscription), which expanded the unlimited space of the Bitcoin network in the future.

No one cared about its existence (Ordinals) at the beginning. Until February this year, an NFT project called BitcoinShrooms used the Discord community to attract investment. The person was auctioned on the Bitcoin auction platform Scarce.City, and the auction price was raised to 2.5 BTC (worth $60,000 at the time). It was later canceled for unknown reasons, and was later listed at Sotheby's auction house.

It may also be because of the Ordinals auction in February that attracted people to try to use the Ordinals protocol to build NFTs on the Bitcoin network.

Until April this year, Unisat launched a wallet and trading market. The product has built-in support for the issuance and trading of Bitcoin Ordinals NFT and BRC20 tokens, making Bitcoin NFT Once again becoming popular, it also accelerated the pace of Bitcoin Ordinals NFT’s emergence from the circle.

After the popularity of Bitcoin NFT from April to May, OKX wallet’s smooth experience and support for Bitcoin NFT have once again attracted the attention of Bitcoin NFT. Vitality makes us feel that Bitcoin NFT may have a better prospect than Ethereum for the following three reasons:

1.  ;Fair distribution, no reservation

Bitcoin NFT distribution mechanism has more attractive advantages than the traditional Ethereum NFT distribution mechanism . For example, Bitcoin Frogs, the earliest OG NFT issued based on the Bitcoin network, was launched at the end of February this year. Everyone can fairly participate in Bitcoin Frogs NFT minting (Mint). A total of 10,000 are issued, and no one can Any reservations. There is no need to pay additional purchase fees, you only need to pay the GAS fee to participate in the casting and obtain it.

This fair distribution mechanism eliminates the entry barriers to traditional NFTs and allows more users to easily participate, mint, and create. The low-threshold participation method helps the Bitcoin NFT ecosystem build a more inclusive and diverse ecosystem. ized NFT community.

The distribution mechanism of Ethereum NFT has always followed the traditional old idea of ​​ERC20 currency issuance. The issuer defines the initial issuance price of NFT, rather than the holder. Someone defines the price.

2. Fully community-driven IP

Ethereum NFT projects are usually led by entity companies with clear visions and business goals. These companies can formulate and change the future roadmap of NFT and decide the development direction and strategy of the project. These companies played a key role in the initial design, issuance, and promotion of NFT and hold related intellectual property rights.

There are typical examples of Ethereum NFT. The intellectual property rights of some Ethereum NFT projects such as Crypto Punk, BAYC, Azuki, and Doodles are all held by entity companies, and The company also receives royalties on each sale, which is independent of NFT holders. In addition, only NFT holders have the right to expand unlimited commercial rights or limited commercial rights. To put it simply, many NFTs in Ethereum implement decentralized governance on the surface. In fact, all decisions are made by the company. Just like Doodles, the founder has absolute power to decide to transform the company into a franchise media company. Azuki, The Doodles team can issue a new low-quality NFT and sell it to the community without going through community governance and voting.

In contrast, Bitcoin’s issuance method is more transparent and fair than Ethereum NFT. Regardless of the issuer or participant, there are no whitelists, privileges, or team-reserved NFTs. All NFTs are cast fairly. These features are attributes that enhance the decentralized community governance of Bitcoin NFTs. The issuer does not have any copyright restrictions on commercial knowledge, nor does it require royalties, and completely shares these IP intellectual property rights with everyone. This method can better attract creators to create and promote NFT unlimitedly, and truly achieve this. Everyone gets involved.

The business models of Ethereum NFT and Bitcoin NFT represent two different governance methods: Ethereum tends to be dominated by entity companies, while Bitcoin emphasizes more Decentralized governance. This distinction affects the direction of the project, community engagement, and the openness of the governance model.

3. Bitcoin NFT fully on-chain

Bitcoin Coin NFT uses a completely on-chain method to store NFT information, ensuring that Bitcoin NFT data is not controlled by any centralized server and improving data security. Centralized servers are at risk of being attacked, shut down, or having their policies changed. By using fully on-chain Bitcoin NFTs, projects can reduce their reliance on centralized services and reduce potential problems caused by centralization risks.

Bitcoin NFT uses a completely on-chain storage method, and anyone can access, verify authenticity, and view the metadata of Bitcoin NFT. This kind of transparency can reduce the cost of trust and encourage the community to participate more actively in the development and governance of the project.

Blockchain technology brings an open data structure, and anyone can access, verify and view Bitcoin NFT data. This transparency helps build trust and enables the community to become more actively involved in the development and governance of the project.

Summary

The huge Ethereum NFT has gone through many After this chaotic market baptism, it lost its vitality and lost its past glory, but it does not affect its current dominance of NFT.

The current Bitcoin ecosystem has injected new vitality and opportunities into the NFT market. Seeing the vibrant Bitcoin network now is like a dream. The Bitcoin network does not have smart contracts. It can also be like the Ethereum network, allowing every user and builder to be immersed in the Bitcoin network and unable to extricate themselves from excitement.