NFT was the Collins Dictionary word of the year in 2021 and, at the start of 2022, you can’t move for people and companies trying to get in on the action. It’s clear that the thrill of exclusivity and owning something verifiably unique that others don’t have access to has caught people’s imagination. Trust in NFTs is gaining momentum as brands like Adidas start moving into the metaverse space, focusing even more attention on this relatively untapped asset class. In amongst the buzzwords like NFT and metaverse, it’s likely you’ll have come across the term ‘PFP’ (profile picture) through NFT projects like Bored Apes Yacht Club (BAYC), Crypto Punks, and Fancy Bears. And, increasingly, it’s PFPs that are serving as entry tokens to some of the most sought after communities and experiences in both the metaverse and IRL.
A brief history of PFPs…
PFP or ‘avatar’ collectables are responsible for a large part of the uptick in activity and interest around NFTs. Usually, a PFP NFT project is a cluster of avatars (typically about 10,000) where each avatar has a unique assortment of traits such as facial expressions, clothing and accessories. These traits are algorithmically assigned to individual avatars which are automatically generated based on original artwork. Therefore, these projects are referred to as “generative art”.
The OG of PFP projects is CryptoPunks, which has generated over $2 billion USD in trading volume on the secondary market. Just this month, a single Punk sold for 8,000 ETH, worth close to $23.7 million. The remarkable thing about CryptoPunks and other important PFP projects is that their NFTs are often given away for free or for a nominal price at the start of the project. An example of this that has captured the most mainstream attention is BAYC, a generative PFP NFT project that has 10,000 unique Apes. Anyone with a bit of spare change and tech-savvy could have got hold of an Ape for a mere 0.08 ETH + fees when they first dropped in April 2021. Fast forward to today and the cheapest Ape sits at around 13 ETH. Recently, Fancy Bears Metaverse sold out its 8,888 PFP Bears in just 8 minutes, attracting celebrity holders such as Floyd Mayweather and Jay Alvarez.
What makes PFPs the ultimate check mark?
Despite the column inches and social media noise they generate, PFPs are nowhere near mass adoption – yet. But because they have such passionate and vocal communities, they are gaining mainstream traction. Even on the professional social media platform, LinkedIn, NFT PFPs have become a fairly common sight (although they’re often taken down by the platform for not representing a user’s true likeness!). Twitter has recently pursued a very different tack by integrating verification of PFP NFTs, enabling users to not only display them but demonstrate their authenticity to the world. With hundreds of thousands of Twitter users sporting a blue ‘verified’ check mark, it’s safe to say that a legit Bored Ape PFP is now a far more powerful flex, marking you out as part of one of the most coveted communities on the planet.
I still haven’t really explained why leading PFPs have such value. It’s not because they can be exchanged for large amounts of money, although the potential to generate a return certainly doesn’t hurt. But this is a byproduct of their intrinsic value, which is a community of shared values. The metaverse is fast becoming a core of many PFP holders’ social and professional lives. It’s where they make business deals, enjoy concerts or just shoot the breeze with holders who are likely to have similar interests and ambitions.
PFP project creators can add further value to the community through benefits such as personalised merchandise, exclusive metaverse and IRL parties, giveaways, access to celebrities, and profit share from the projects’ royalties through democratic decentralised organisations called ‘DAOs’. PFPs are check marks without parallel in any other walk of life, making you a lifetime member and an equal shareholder, opening doors and generating FOMO in those on the other side.
Final thoughts on PFPs
So you bought Tesla stock before it was cool, graduated from Harvard, got a CORE membership and are verified on Twitter. In a world that’s moving rapidly towards Web3 – the decentralised internet – I hate to break it to you, but you’re old news. PFPs represent the ultimate new blue check precisely because they’re disconnected from these entrenched ways of displaying status and privilege. Their intrinsic value comes from communities that have grown from humble origins because of shared passions. They inspire others to want to join, rather than creating exclusivity through deliberate exclusion. And it’s only fair that they enable a little flexing from those who saw their potential first.