The NFT market is in a state of flux, with the market cooling down in the industry and heating up outside the industry.

NFT is a topic that is more popular than encrypted digital currency, but the NFT market in April is in a situation of ice and fire: Nonfungible data shows that since entering April, NFT sales, sales volume and the number of active wallets have continued to decline, with sales falling below $200 million in the middle of the month and the number of active wallets falling below 40,000 on April 19. Today, the NFT market sales volume is $30.7 million, down nearly 60% from the monthly peak of about $78.63 million on April 14, and down 33% from last week. The number of active wallets has risen recently, falling to about 11,000 on April 21 and rising to 12,000 today, but it is still 20% lower than the peak of about 15,000 on April 14 this month.

Judging from market data, the NFT craze is receding, but the enthusiasm of people outside the circle to enter the NFT market remains unabated. Musicians, artists, sports stars and other celebrities continue to pour into the NFT field. Legendary British artist Ralph Steadman, rapper Eminem, and Olympic bronze medalist (South Korea) Gu Ja-cheol have all recently released NFT projects.

Although the overall popularity of the NFT market in April is not as high as that in March, domestic NFTs are rapidly sprouting, the barriers between the crypto art circle and the traditional art circle are being broken, and listed companies in the entertainment sector are paying attention to NFTs.

Taking crypto art as an incision, domestic NFT is spreading like wildfire

Crypto art is a breakthrough for NFT to go viral.

NFT exploded in March this year, attracting global market attention. The reason was that Beeple's NFT work "Everydays: The First 5000 Days" was auctioned at Christie's. The work was eventually sold for US$69.346 million, triggering major media to compete for coverage.

CryptoC is a community focusing on NFTs. Its founder Tang Han said in a sharing session at the end of March that when she communicated with some traditional artists, she found that these artists were very hesitant to get involved in NFTs, "because China has recovered from the epidemic quickly, and Chinese artists do not have much motivation to create NFTs."

But the situation changed as the art exhibition progressed and information spread on the Internet.

On March 25, the Yue Art Museum in Beijing's 798 opened the "DoubleFat Double Profit - The First NFT Crypto Art Exhibition". More than 200 artists engaged in NFT crypto art creation participated in the exhibition, and burned a painting by Leng Jun to generate an NFT. The work was sold for 400,000 yuan.

From March 26th to April 4th, China's first crypto art exhibition "Virtual Habitat - Have You Seen Memes in the Mirror" opened at UCCA Lab (Ullens Center for Contemporary Art) in Beijing, and the exhibition will be held at Shanghai Jinghua Art Space from April 9th ​​to April 11th - this is also the world's first large-scale offline crypto art exhibition.

In addition, Yongle Auction plans to organize a special session or special topic of crypto art in the spring, using the traditional auction format and settling in RMB or other legal currencies. It is worth noting that Zhao Xu, the founder of Yongle Auction, is also a master's tutor at the Central Academy of Fine Arts.

Recently, the well-known art critic and painter He Huaishuo commented on NFT. In his comment, He Huaishuo said that he had stopped commenting on contemporary art since May 2019, but now he has made a long comment on NFT. Regardless of whether He Huaishuo criticized NFT from the perspective of cultural trends and creative methods, as he is in his 80s and is not a crypto artist, we can see the penetration of NFT into the domestic art circle.

There is no doubt that NFT has successfully broken the circle in the country.

"NFT in China is still in its early stages. Everyone's entry point is mainly from the perspective of crypto art. Recently, there have been many crypto art projects in China, especially crypto art galleries. In addition, everyone likes to cut in from the perspective of IP and exchanges. Crypto art is the easiest to cut in, and it is relatively easy to get out of the circle." Tang Han said in an interview with Babbitt, "Artists are actively involved in the NFT field. BCA and us will slowly pull artists into the Crypto field. Even some listed companies have begun to find ways to operate their own artists into the NFT field."

Popular culture makes NFT more popular

Artworks with appreciation potential are assets. Compared with the identification of artworks, popular culture is more easily accepted by the public. Card collecting, trendy toys, star chasing, IP, etc. are all part of popular culture.

NBA Top Shot, a virtual star card platform based on NFT technology, is an NFT star project in March this year. Well-known stars Jordan and Durant have participated in the project, and the latest valuation of its developer Dapper Labs has reached 7.5 billion US dollars. It is also this project that has brought NFT to a new height - many people who participate in the rush to buy star cards are not insiders in the crypto circle, but fans of stars and sports enthusiasts.

After April, domestic popular culture also began to explore the NFT path, and the domestic entertainment industry was the first to test the waters in this regard.

Singaporean lyricist and singer Hanjin Tan is the first Chinese musician to issue NFT. He has composed music and lyrics for singers such as Eason Chan and Joey Yung. After he announced the successful issuance of NFT, he received praise from Hong Kong singer Alfred Hui. After Hanjin Tan successfully issued NFT, many singers in China have also tried NFT.

In an interview with Babbitt, Hanjin Tan said that he heard rapper MC Hammer and others talking about NFT on Clubhouse, and subconsciously thought that NFT could help the next generation of musicians.

"The golden age of music relied on CDs, and CDs are also one of the carriers of digital music. The emergence of free platforms has devalued the value of music. It has not been easy for me and our peers, and I am worried that the next generation will have an even harder time than us. When I saw NFT, I thought it might reduce the burden on the next generation of musicians to make music, although it may not necessarily solve this problem. At first I just wanted to research it, and then I wanted to share it with the new generation of musicians, but I found that most of them were still very scared and not very positive about it. So the way I wanted to verify it was to test the waters myself and tell them that this thing is feasible, and then I succeeded." said Chen Huanren.

In addition to expanding income, NFTs can help musicians cultivate close connections with their fans. “It’s like the Renaissance, when musicians wrote and performed with the support of a few guests, providing spiritual food. Maybe one day, an artist will be able to live well with just 1,000 fans or fewer, and I think that’s not a bad thing,” said Hanjin Tan.

Finally, Hanjin Tan's "Nobody Gets Me" was sold at an auction price of 7 Ethereums on Opensea. Hanjin Tan said that this price was ideal, but he also pointed out that selling one's own original songs in the market would get different prices depending on the distribution channel or purpose. For example, there is a big price difference between the songs used for advertising songs and the songs sold in the Apple Store.

In an episode, Hanjin Tan said that he had prepared a gorgeous version, but he temporarily removed it the day before the auction because he thought that the gorgeous version was equivalent to telling other musicians that they could not make NFTs without resources, so he decided to issue NFTs in a simple way, "as long as you have a computer, you can make it."

Hanjin Tan is right.

Tang Han said that the supervision of celebrities in China is relatively strict. "As for singers from Hong Kong and Taiwan, we should be able to see their works one after another. I know their agents may be planning for them."

Following Chen Huanren's NFT release, domestic rapper Gao Jiafeng also launched NFT. Gao Jiafeng posted a 7-second NFT music on Open Sea, and the platform showed that the average bid for the work was about 1.01 ETH. Recently, Taiwanese singer Wu Zhuoyuan and DJ KAKU have both released music works on Taiwan's NFT trading platform.

At present, domestic film and television companies and trendy toy companies have not made clear statements about getting involved in NFT. However, looking around the world, the NFT trend has already blown into the film and television industry and Hollywood. DC Marvel and its model companies have also entered the NFT field.

It is worth noting that not long ago, Gu Jia, chief of the media and internet industry at China Merchants Securities, said in public that the entry of IP into NFT is a very effective attempt, but the essence lies in its value. However, there is currently no phenomenon of IP being underestimated, so domestic companies do not have a strong impetus for more IPs to enter the NFT market.

NFT’s imagination space: non-standard assets, content creation, DAO

For many ordinary people, exposure to NFT is nothing more than purchasing or investing.

Xiao Wang (pseudonym) first learned about NFT in 2019, and really participated in NFT in 2021, when he started trading NBAtopshop concept cards. "But I don't think NBA cards are real NFT transactions. My first NFT transaction happened on Opensea. I chose the cheapest NFT transaction, hoping that it would issue airdrops, but not because I really liked it. After that, I picked some projects with low handling fees and project parties that promised airdrops to trade. I almost never participate in NFT transactions on the Ethereum chain because the handling fees are too expensive."

Xiao Wang believes that like DeFi, transaction fees are an important factor affecting NFT liquidity. "I think my most unsuccessful investment was buying an NFT work on Opensea for $1 and selling it for $180, but I may lose money. Because this transaction involves multiple on-chain transactions, buying once, selling once, confirming receipt once, and not selling yet, selling again. It costs about 4 times in total, and I have already spent 3 times, about $150."

Unlike Xiao Wang, Xiao Ping (pseudonym) is interested in NFT. He first began to pay attention to NFT in April 2020, when NFT and crypto art had already made a name for themselves in the cryptocurrency circle.

“If it’s buying tokens, my first investment was during the Spring Festival, when I tried to go long on ENJ. ENJ is a typical news-driven coin. At that time, the news said that ENJIN and Microsoft had cooperated to launch NFTs, and it soared 40% that day. I was tempted, so I opened a contract to make a profit. Later, in mid-February, I bought CHZ and made a small profit. If it’s buying NFT products, my first attempt was to buy NBA Top Shot cards at the end of January, because on the Cryptoslam statistics website, NBA Top Shot’s sales volume has exceeded that of Cryptokitties, creating a history of crypto collectibles. In addition, I liked NBA when I was a student, so I was curious and familiar with the combination of NFT and NBA cards, so I spent 200 USDT to grab card packs and bought some cheap cards. I made money by buying coins, but I lost more by buying NBA cards. After February 23, the entire market began to fall, and the profit rate of my assets fell from a maximum of 140% to 20%, and the cards I bought were basically halved. For me personally, the most successful NFT investment is buying FLOW and CHZ, and the most unsuccessful is NBA Top Shot cards. "Xiao Ping said.

There was a time gap of nearly a year between Xiao Ping’s understanding of NFT and his participation in NFT. Xiao Ping said that this time gap was caused by insufficient understanding of NFT at the time. It stands to reason that “early understanding and early participation can reap big dividends in the early stages”. “NFT represents crypto culture. There is a corresponding community behind each NFT, such as NBA cards, UFC cards, CryptoKitties, domain names, virtual land, crypto art… Everyone can find a community they like and participate in it. The global connection is a wonderful experience.”

Tang Han does not recommend ordinary people to invest in NFTs because the liquidity is relatively small, and they are more of a collection or community attribute. "I think this year's NFT infrastructure will be improved in finance, content, and DAO. There are actually several companies in China that are doing finance. They embrace NFT to do financial bill circulation, put non-standard assets on the chain for trading, and provide tools. This is worth our attention, and it is very suitable for people who used to do DeFi. One is the improvement of finance. There are actually several companies in China that are doing finance. They want to use NFC to do some of the circulation of bills. DAO will be a brand new practice, and I am sure there will be great development in this area. If it is in the content field, generally speaking, it revolves around how to better help content creators to create freely in the Web3.0 era, as well as the monetization path and bridging the gap between artists and fans."