Viewpoint: Will NFT “digital collections” with Chinese characteristics be successful?

Wu said author | Colin Wu

Editor of this issue | Colin Wu

Recently, NFT platforms led by Tencent and Alibaba have deleted NFT-related words and changed their names to "digital collectibles" after communicating with relevant regulatory authorities.

On October 31, the National Copyright Trading Center Alliance jointly issued the "Digital Cultural and Creative Industry Self-Discipline Convention" with the China Academy of Art, Hangzhou Internet Notary Office, CCTV Animation Group, Hunan Provincial Museum, Ant Group, JD Technology, Alibaba Auction, Tencent Cloud and other institutions. A set of NFT models with Chinese characteristics began to take shape. It includes 11 consensuses, namely: empowering the real economy, promoting national culture, promoting industry development, insisting on originality, ensuring value support, protecting consumer rights, controllable alliance chain technology, maintaining network information security, eliminating virtual currency, preventing speculation and financialization risks, and preventing money laundering risks.

It is fortunate for the domestic industry that NFT has not been regulated across the board. But will this Chinese-style NFT succeed? We don’t know, but at least it is completely different from the current NFT logic in the Western world.

First, the driving logic.

The core reason for the formation of the NFT trend this year is still the logic of the crypto industry, which has formed a market platform for continuous transactions, as well as the community and traders of NFTs. Behind all this is the quick benefits. Trading profit is still the core reason for the popularity of NFTs. The total transaction volume of OpenSea has exceeded 10 billion US dollars, and the daily transaction volume is stable at around 50 million US dollars. Most of the participants are for profit, not collection.

China's "digital collectibles" require "resolutely resisting any form of malicious price speculation on digital cultural and creative works." It is not yet known whether they can be opened for trading (Ant Chain requires holding for 180 days), and it is difficult for auction houses to participate. Therefore, there is a difference in this essential driving attribute.

Second, the logic of property rights confirmation.

The second reason why NFT has gained mainstream recognition is that decentralized public chains bring ownership confirmation and circulation to digital artworks, making the collection of digital artworks possible. It is precisely because digital collectibles are easy to copy and infringe that blockchain is more valuable. To ensure the confirmation of NFT ownership, most NFTs will choose the decentralized Ethereum public chain instead of other more centralized public chains. Domestic digital collections are based on alliance chains under Tencent, Alibaba, etc., which only have the form of blockchain, so there is essentially no way to talk about ownership confirmation, which eliminates its significance as a collectible.

Third, participate in the creative logic.

In the traditional NFT network, anyone can create and upload on OpenSea, and any user with a cryptocurrency wallet can directly participate in purchases and transactions. However, for Chinese institutions, completely free and open creation, participation, and transactions are impossible and must be reviewed, which also makes it difficult for them to gain acceptance from the international NFT community and ecosystem.

Fourth, native IP.

The success of NFT is accidental, that is, the formation of native NFT head IPs led by CRYPTOPUNKS, bored ape yacht club, etc., which then led to a large number of native mid-level IPs, as well as many innovative projects such as Art Blocks and NFT DAO. In contrast, digital collections with Chinese characteristics currently do not have independent native NFT IPs and images, but are more attached to celebrities, games, and even corporate advertising promotions, with a strong marketing flavor.

In summary, Chinese-style digital collections are very different from traditional Western NFTs in terms of underlying logic and overall ecology. We cannot judge whether it will be successful in the future, but it must be a completely different route. In comparison, Chinese game studios with rich overseas experience and excellent overall level are more likely to create a world in the overseas blockchain game competition.