While the cryptocurrency market remains in a bearish phase, NFTs, which were all the rage during the previous bull market, are experiencing their first major downturn. Numerous NFT projects are being cleansed from the market, and players are scrambling to exit. The market has become so bleak that even highly regarded blue-chip NFTs are not immune to the ongoing price declines, prompting some projects to embark on self-rescue missions.
Recently, the well-known blue-chip NFT project Doodles partnered with Crocs to launch a limited edition line of "holey shoes," which sold out within 72 hours. Another prominent blue-chip NFT, "Pudgy Penguins," combined with physical toys to introduce "Pudgy Toys," which generated over 20,000 sales and more than $500,000 in revenue on Amazon within two days.
NFTs, once disguised as "new blockchain applications," are now turning to merchandise. While the prices and sales revenue of these products are far from the returns seen during the bull market, these IPs, which were originally popular only within the niche Web3 community, have finally entered the mainstream consciousness through physical branding or physical derivatives.
Doodles Joins Forces with Crocs
Even if you haven't heard of Doodles NFT, you're likely familiar with the globally popular Crocs holey shoes, which have inspired numerous imitations. Now, Crocs has released a new version of its holey shoes featuring design elements from Doodles NFT.
Yes, this globally renowned casual footwear brand has crossed paths with an NFT IP, collaborating with Doodles to launch a limited edition of holey shoes. Buyers of these shoes also receive a unique Crocs Box digital collectible. If buyers choose to destroy this collectible, they can unlock two Crocs wearable NFTs that match the Doodles NFT characters, along with a Stoodio Beta Pass card for use in the dynamic Doodles 2 NFT series.
On August 29th, at 12:00 PM Eastern Time, these holey shoes were released for $120 each. Three days later, they were sold out.
Now, let's delve into the NFT IP that attracted international collaboration with a footwear brand.
The Doodles NFT series was launched on October 17, 2021, created by three Canadian artists. It was a prominent presence in the NFT market from the start.
At that time, a total of 10,000 NFTs had only 504 owned by the founding team, while the remaining NFTs could be minted by users on the Ethereum blockchain by paying gas fees. The initial minting price (equivalent to the public launch price) was 0.123 ETH (excluding fees), which was approximately $471. The NFTs quickly sold out, driving up the minting fees to 1 ETH ($3,830).
Doodles was one of the most popular series in the NFT market, known for its vibrant colors and simple doodle-style designs. It became one of the "most popular" series in the NFT market shortly after its launch. The rarest Doodles NFTs sold for as high as 296.69 ETH, which was over $1.1 million at the time.
However, even the most popular NFTs couldn't withstand the "crypto winter." Today, the floor price for Doodles is only 1.37 ETH, equivalent to $2,220, with a 24-hour trading volume of only 33.51 ETH. While this floor price is more than four times the initial launch price, during its peak, the floor price was 23.95 ETH, with a daily trading volume of 2,811 ETH.
Doodles' prices have come down, but trading volume hasn't gone up. Fortunately, the IP's value, built over two years, hasn't disappeared overnight, and its eye-catching designs caught the attention of Crocs, leading to the creation of shoes priced at $120, much lower than Doodles' initial launch price of $471.
The founders of Doodles also understand that NFTs alone aren't enough. The founder, Keast, stated that Doodles' ultimate goal is to become a comprehensive Web3 entertainment company, bridging the gap between the Web3 and the real world. In other words, NFTs alone are not enough; they need to be practical.
Bear Market Pushes NFT Industry from Virtual to Real
NFT IPs selling physical products aren't limited to Doodles. Another blue-chip NFT project, "Pudgy Penguins," started exploring merchandise back in May of this year. They released Pudgy Toys, a combination of blockchain technology and physical toys, and launched the NFT digital platform Pudgy Worlds, allowing each toy to have a digital experience on the website.
According to official data, Pudgy Toys sold over 20,000 units and generated over $500,000 in revenue on Amazon within two days, ranking as the number one new product on Amazon's sales chart. This indicates the recognition of Pudgy Penguins' designs by both NFT users and regular consumers.
The NFT market's bearish trend is affecting not only individual projects but also the largest NFT trading platform in the world, Opensea. This trading platform is actively seeking collaborations with platforms or companies that "support e-commerce, ticketing, or any 'offline' experiences."
All signs indicate that the hype around small NFT images is a thing of the past, and any industry segment going against this trend is at risk of being abandoned by the market.
In June of this year, the blue-chip NFT project Azuki released a new collection, Azuki Elementals, which faced backlash from the community due to high trait duplication with the previous generation of Azuki NFTs. This led to Azuki's floor price dropping below 10 ETH.
Prominent NFT holder Christianeth stated on social media, "If a team lacks new ideas, innovative community driving force, or a new business model and direction, the next cycle will be challenging."
Clearly, projects like Doodles and Pudgy Penguins have recognized this and are attempting to find new avenues amid dwindling liquidity. They are exploring cross-promotion and introducing physical merchandise combined with digital offerings, among other strategies. After all, even established companies are issuing NFTs now, and they have tangible products. "NFT+" or "Web3+" is simply a step toward digital enhancement.
For instance, Starbucks launched the NFT membership program Starbucks Odyssey, Nike introduced NFT sneakers called Crypto Kicks, and Visa and Mastercard partnered with various Web3 companies to develop cryptocurrency debit cards.
Some worry that blue-chip NFTs getting caught up in cross-promotion may lead them away from innovative exploration of Web3 and down a centralized path. However, Pudgy Penguins believes the key lies in ensuring the rights of NFT holders, avoiding rent-seeking behavior and market manipulation.
Pudgy Penguins has introduced a solution called Project Overpass, essentially an "IP authorization marketplace." In the blockchain world, while NFTs are designed and initiated by founding teams, ownership of a particular NFT is determined by those who spend money to mint it on the blockchain or those who purchase it later on the secondary market. When a particular NFT is selected for