Major Challenges Facing the NFT Ecosystem

Challenges for NFTs

On the morning of June 28th, Beijing time, Red Bean launched a new round of NFT sales. However, the pre-sale was met with condemnation from the entire community: too short of a pre-sale time, laggy experience, and prices were too high. To make matters worse, the NFTs sold were actually imitations of Red Bean’s, some of which were even the same as Red Bean’s original works, and these imitations were found by netizens to have very rough details.

After the sale, Red Bean’s price immediately fell by 30% and Little Bean’s price immediately fell by 40%. A blue-chip NFT that was given high hopes completely collapsed.

When I saw this result, I remembered a conversation I had with a few friends in the circle about three weeks ago on a weekend.

At the time, we talked about NFTs and discussed Bored Ape Yacht Club and Red Bean.

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We all felt embarrassed about the progress of Bored Ape Yacht Club and felt that the project was becoming more and more “exhausted”:

It’s not that the project team did a bad job – in fact, what it delivered was far beyond any other project in the NFT ecosystem.

It’s not that the project team didn’t work hard – its contributions along the way were visible to the entire NFT ecosystem and recognized by the community.

But the feeling is that its delivered results are increasingly lagging behind the expectations of both the community and even users outside the community.

I think there may be several reasons for this:

Firstly, NFT is a path that no one has ever walked from virtual to reality, and there is no ready-made experience to refer to and learn from, so the difficulty is extremely high and full of risks.

To successfully proceed, the team must be careful to avoid mistakes, while also being innovative and continuously meeting the rising expectation threshold of the community.

And this seems to be a pair of seemingly contradictory requirements, because it is difficult to be innovative while being careful to avoid mistakes; and to be innovative inevitably involves making mistakes.

Secondly, Bored Ape Yacht Club has now opened up two lines, one is a minority elite game of mecha type; the other is a popular game of monkey land. These two lines are completely different in their thinking and value orientation – this is like Hermès managing both a luxury brand and a mass brand.

The biggest challenge of this business model is how to prevent two brands with different positioning from pulling and interfering with each other, thus leading to both being defeated.

This seems to be the first exploration and attempt in the NFT project.

It can be said that the Bored Ape team is now facing great challenges.

Many holders have already felt this challenge, perceived this fatigue, and believed that it is probably difficult for the project to make further breakthroughs in the future, so they have sold the Bored Ape they hold.

This has led to a further decline in the floor price of Bored Ape, and the confidence of the community has begun to waver.

In contrast to Bored Ape, the floor price of Red Bean has steadily risen in the previous period.

At that time, I thought that this might be because Bored Ape focuses on the attention of the public, and bears all dissatisfaction and pressure, so the consensus only second to it, Red Bean, can take a light load on the battlefield, and maintain community consensus and maintain the project’s price as long as it maintains the current state.

At this time, “doing nothing” may be the safest for the project.

Because as long as something is done, everyone will definitely compare what has been done with what Bored Ape has done. If it cannot surpass what Bored Ape has done, everyone’s expectations will fall through, and the project’s price may be difficult to maintain.

Bored Ape has basically tried all the paths that can be tried now, and it has basically set a ceiling for each path. In this case, how likely is it for other teams to do the same things and surpass it?

Choosing “doing nothing” is also a very risky approach.

One is that everyone’s patience is limited. If the project can make a breakthrough before everyone’s patience runs out, it will be okay, but if the project exhausts everyone’s patience and still has no new moves, then the project is waiting to die.

Second, if new teams create new models in this process, it is entirely possible for them to come from behind and surpass old blue chips.

Therefore, the entire NFT ecology is currently facing great challenges: the head brand is experiencing creative fatigue; other projects are facing the dilemma of being blocked in front and chased by enemies behind.

Speaking of Red Bean, what I don’t understand the most about this team is, is using such NFT sales to deliver to the community because they feel that the road ahead is difficult, so they seize the last “opportunity” while the project is still hot?

Such a team really let me down the community that has been loyal to it all the time. Thinking of the project founder’s previous experience, I’m afraid this is another manifestation that is hard to change.

Even if such a team has creativity and marketing skills, it is still difficult to do a project well in the long term, so I sold all the red beans, small beans, and project airdrops in my hand without hesitation.

The collapse of Red Bean is not only a huge blow to the entire NFT ecology, but also pushes all the pressure and expectations of the entire ecology to Bored Ape.

It can be said that the pressure and challenges Bored Ape is facing now are greater than those of any project in the entire crypto community, because it bears the expectations of a racecourse.

Previously, no project has ever focused on such high expectations. Even in the rise of Ethereum, there has never been a saying that if Ethereum fails, what will happen to this racecourse.

In the long run, I still have confidence in the NFT track and believe that more good projects will emerge.

However, for now, Bored Ape is afraid that it will have to move forward alone in this racecourse, and experience even greater storms ahead.

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