At the time of writing (October 2022) CoinMarketCap lists over 2,800 collections of related NFT art. The total assets contained within most collections are in the thousands and the best sellers having 30% or more items linked with owners (in other words, sold). Collections offer a good way to move large units of NFTs and provide some security to the owner with the brand and market footprint of the product.
Images that can be used within the web such as icons and avatars provide less real estate for the art but their small footprint makes it easier for copies to proliferate, increasing product awareness and the innate value of the original. CryptoPunks for example are a minimal 24×24 pixel image set yet have netted their creators considerable profits.
Pokémon were not the first collectible item exposed to the public. Cigarette and sporting cards date back to the end of the 19th century. Consider that many of people with the money and enthusiasm to trade in NFTs are the kids who bought and traded in Pokémon and similar products when they first came out. Looking at how the collectible trading market has panned out gives clues as to what to produce or invest in with NFTs.
The Pokémon motto is ‘got to catch them all’ but expecting anyone to collect all of a possibly endless set is not going to pan out. It is tempting to push a NFT theme as far as it will go due to the digital nature of a product. Once a basic model is created it is relatively simple to copy and modify it with a range of colours and poses all with far less effort than the original. Some trading card themes published themselves into obsolescence by releasing more and more variants and expansions. The buyers realised that collecting every variant was increasingly difficult and moved away from those themes. They still know this and if a theme is clearly going to expand recklessly then buyers will forsee an initial investment being watered down by a flood of new variants and will not take the first step into investing.
To succeed the collectible NFT has to keep to the trading card plan.
- Have a guaranteed number of items within the theme and do not change it.
- Build in a rarity factor, only a minority of items having a distinct colour or form.
- Make the rare items hard to find. This is not just a cost factor, think of early releases or limited time sales.
- Back up the NFT elements with other saleable products keeping within the theme.
The collectible product can be in the form of an actual card sometimes sold with the trading card model in ‘sealed packs’ of variable rarity. Buyers are expecting to find rare cards and hold or trade them as investments within the product’s trading platform.