The Rise Of PFP NFTs
Why do people want Punks, Bored Apes, or other cute animals for their profile pictures?
Since the onset of social media, profile pictures have been key in defining our identities.
A professional photo on your LinkedIn profile. A solo portrait or perhaps one with your other half or your family in your Facebook or Instagram profile. Perhaps the latest photo you took on your pre-covid holiday, or your cute little doggy – profile pictures are what we want others to know us by, and subsequently they might recognise us by certain traits.
Interestingly, with NFTs, collectors no longer want to display a self-portrait but to don their PFP (profile pic) NFT. Is it a form of flex? Or is it just a means of communicating our identity? Invariably, it's likely to be both.
Avatars As PFPs
The most tangible benefit of putting a Punks or a Bored Ape as your PFP on Twitter is that you'll most certainly gain a ton of followers. With these two PFP NFTs being the most highly valued and highly sought after, it communicates a certain social status in the world of NFTs. Besides drawing attention from your fellow Punks or Apes, newer collectors might follow you, hoping you'll "drop some alpha" in your next tweet. Drop some alpha is a slang for sharing about the curated projects with potential for huge gains.
Of course, putting them as your PFPs has some flex to it, but I argue that that may not be the main reason. In the world of NFTs, there are other Art-type NFTs that might be more valuable than Punks or BAYC e.g. Fidenza, Squiggles, Ringers, but collectors are less likely to use these as their PFPs. Yes, these art-type NFTs aren't as cute as a Punk or an Ape, but if the sole purpose was to flex, these might be better flexes.
What about those who cannot afford CryptoPunks or BAYC? Their alternative would be to don their "second-rated" or favourite NFT collections as their PFPs, or for artists, they might choose to use their own artwork for PFPs. Don't get me wrong, I'm not dismissing the value of these second-tiered NFTs, which may well become the next BAYC, the point is that PFPs is a form of non-verbal communication – it tells people what "club" you belong to, or which project you're rooting for, so much that you'll happily don one of their NFTs as PFP.
The Oversupply Of PFP NFTs
Many of these second-tier NFTs have since grown a life of their own, with the 10ETH mark being that threshold to cross to be second-tier, while others might be considered as even lower-tiers. Having said that, with every collection averaging 7,000 to 10,000 pieces, there's currently way too much PFP NFTs than need.
Kongs, Monkeys, Penguins, Cats, Dogs, French Bulls, Giraffe, Toads, Ducks, and so much more – if these sound like what you might see as a zoo, you're probably right! It almost feels like a trend or a formula to name your NFT collection as <Adjective> <Animal>. Besides animals, NFT makers like to play on other niche subjects like Zombies, Vampires, Robots, Unicorns, and Angels.
The rationale for the naming convention is simple – they need to tell a story. Whether it's animals socialising in a secret virtual land, or characters coming out of a fantasy world, creators need a cohesive theme to sell their NFTs. Therein, they might throw in a line or two in their roadmaps, where part of the funds raised will be donated to the conservatories, or to build that fantasy in the metaverse. Trust me, this sh*t sells.
Supply should always be considered relative to the demand. The argument for an oversupply is that no new demand are coming into the NFT space, while supply is growing at an alarming rate. With Twitter and TikTok getting into the NFT action, it might trigger a new wave of demand, but as to how much that demand can catch up with the supply remains to be seen.
How Should You Choose A PFP NFT?
If you're going for an asset to preserve your ETH for the long haul, Punks and Bored Apes should be your prime choices. Having said that, if you're priced out of those, just go with any that suits your budget.
More importantly, you should scour their Discord to get a sense of the community before getting that NFT. As you are looking for something that can potentially represent your identity, you should choose something that you vibe with.
Maybe you're a fan of Pandas or Unicorns and you love the aesthetics of it, that's fine too. You'll probably find other like-minded Panda and Unicorn lovers in the community. Or yet perhaps, you're not a big fan of the aesthetics, but you just want to join a community of dads (in CryptoDads) or a community of women entrepreneurs (in World of Women), by all means, buy that NFT to get into the community!
The key takeaway is: The oversupply of PFP NFTs will likely be corrected, where communities who are less motivated and involved gradually die out, and the NFTs lose value over time. So if you're planning to buy an NFT to communicate your identity, just go with one that you vibe with – even if the project dies, there's a good chance of finding a soulmate or your fellow Unicorn-loving buddies through the community, which is priceless.
But Do You Really Need A PFP NFT?
While there are certain social functions to having a NFT for your PFP, the truth is, you may not need it.
If you are planning to grow in the NFT space, yes a PFP NFT will help a lot, especially if it is a Punk or Bored Ape. But if you are just getting by your usual life, you can do with a blank avatar or your self-portrait.
Yup, there's no good reason why you should don an avatar NFT on your PFP. Well, not until more and more of your friends start to do it.
That's the power of social norms and normative behaviour. For now, we're still some way from that tipping point, and if you're reading this in 2021, know that you're early into the NFT space.