CELEBRITY-BACKED NFTs: BOOM OR DOOM?
From eccentric Internet memes, digital artworks, up to a series of virtual items sold at skyrocketing prices, NFT is undeniably today’s investment highlight. A few weeks ago, the world’s biggest group bands BTS, as well as Blackpink, just announced to release their bands’ NFT collection, when mixed reactions from BTS ARMY and Blinks flooded over in a matter of minutes. Yet, since 2021, this emerging market has cast a spotlight amongst public figures all around the globe. Snoop Dogg, Grimes, Paris Hilton, Shawn Mendes, and plenty of artists out there have expanded their merch collection through the Metaverse and engaged with thousands of fans who were depressed being unable to attend their live shows. Thus, you sure don’t want to miss out on the ever-growing trend, eh? After all, it might be your next treasure chest this year.
NFTs, what are they?
Non-fungible tokens (NFTs) are digital assets in the crypto market that represent a wide range of real-world objects such as images, videos, music/audio GIFs, and in-game items. Not merely representing an object, an NFT also contains a unique identifying code and/or other forms of authenticators that serve as proof of ownership and originality of the featured object. It means that even though a particular picture, video, or audio represented by an NFT has been, in anyways, stored or distributed elsewhere, its ownership legally belongs to the holder until they decide to sell the NFT to another person.
NFTs are developed using the same software and programming as most crypto assets. They are showcased on crypto platforms and traded with cryptocurrency. While most other digital creations are infinite in supply, creators typically launch NFTs in quite a limited edition and at prices that vary based on “how scarce” those NFTs are. Initially developed in 2014 by US digital artist Kevin McCoy, NFTs have gained huge fame and hype coinciding with the rise of cryptocurrency and metaverse worldwide.
NFTs vs Cryptocurrency
Figure 1. Fungible and non-fungible assets
Source: Ashokafintechclub.com
After reading about NFTs in brief, among some questions that pop up in your head might be whether NFTs and cryptocurrencies are the same kind of digital assets in the crypto market. So, the fundamental difference between the two lies in their fungibility. Cryptocurrencies, just like physical money, are fungible, meaning each unit in a cryptocurrency has equal value to one another which makes them acceptable as means of payment on the blockchain. One Ethereum is equal to another Ethereum, and one Dogecoin is always worth another Dogecoin. But that is not the case for NFTs. They are not fungible. An NFT cannot be exchanged for another NFT as each simply contains a digital signature used to verify its exclusive ownership. NFTs can only be bought and sold with cryptocurrency at values determined by the holder.
The stars are hauling it
Picture 1. Snoop Dogg’s avatars featured in the Sand Box NFT collection
Source: NFT Culture
Now, more than ever, celebrities from anywhere in the world are demonstrating their keenness in making a mint by producing their own NFTs. In April 2021, Hollywood rapper Snoop Dogg dropped his first NFT collection, “A Journey with the Dogg ‘’ in collaboration with Crypto.com. The NFT contains memories from Snoop’s early years, artworks, as well as music tracks and Snoop Dogge Coins. The collection lasted for 48 hours in the marketplace and each unit was sold at $100,000. Later on, the 50-year-old rapper also released many other NFT collections on Crypto.com, including Young Snoop, Death Row, Deez Nuts, and Drop The Mic. In February 2022, it was reported that he earned an estimated $44 million in revenue from selling roughly 8,800 units of his Stash Box NFTs.
Picture 2. Ridwan Kamil with a painter whose works were sold as NFTs
Source: Liputan6.com
Model and actress Luna Maya is the first Indonesian celebrity to sell NFTs in collaboration with Japanese creator Tokau in June 2021. She also had a partnership with Binance in promoting NFTs to the community with various content featured such as pictures, music, and videos. In December 2021, phenomenal singer Syahrini sold her NFTs titled “Syahrini’s Metaverse Tour ‘’ with a total of 17,800 units on Binance. All of the units were reportedly sold out just hours after being launched on the platform. East Java Governor Ridwan Kamil, on the other hand, recently managed to sell NFTs featuring the works of local painters at up to 45.9 million rupiahs on OpenSea. In addition to that, he also plans to empower artists and young people in West Java by educating them on NFTs so that they can sell their artworks as digital assets in the future. In an Instagram post, he mentioned that the emergence of NFTs has opened new doors in the creative sector in Indonesia.
Picture 3. Advertisement for K-pop boy band BTS in Seoul
Source: Bloomberg.com
In contrast to the positive reaction that most celebrities have received for their launch of NFTs, fans of K-Pop stars such as BTS and Blackpink have been expressing outrage and criticism towards the celebs’ plan to release their own NFTs in late 2021. The main concern raised by their fans is environmental sustainability which, according to studies, can be negatively impacted by the rising number of transactions on the blockchain. Hence, as a response to this issue, Binance has recently announced their partnership with Korea-based multinational agency YG Entertainment in developing NFTs in a more “eco-friendly and energy-efficient” way to minimize environmental impact. The future NFTs will contain intellectual property associated with Korean celebrities under the entertainment agency.
Forecasting: Spike or slump, and the impacts on others’ lives
Figure 2. NFT Markets Compared to Industry Counterparts in 2020 and 2021
Source: Statista and Cointelegraph Research, 2021
For the past few months, NFT has been paving its way faster than ever. In 2020, each category of NFT made a partly equivalent share. However, collectibles and art NFT were highly sought, accounting for 91% of the sales volume. Experts estimated that the total NFT sales volume will rise to nearly $67 billion, a projection from $17.7 billion in 2021. This indicates that the monthly growth rate will be around 185% on average. Furthermore, approximately 800,000 NFTs involving art and collectibles were purchased between January to August 2021, making it the hottest NFT throughout the year.
Thus, art and collectibles NFT prove to be the most substantial merchandise possessed by fans, to the extent that soaring prices are blurred by the resounding interest to fulfill their binge. Believe it or not, these facts have assured us what the future of NFT holds, particularly the celebrity-hallmarked NFT. Why so prospective? The reason/key lies in each piece of NFT, whose identifying code is distinctive and custom-made to every fan.
On top of that, imagine if we could drive an impact on local artists, who might never discover their potential to hit global records? Imagine if we could unlock the untapped multi-coloured Southeast Asian heritage and resonate them across boundaries. Moreover, it is a means of giving back to the community.
And eventually, envision us unleashing the artistic spirit igniting in each youth brick by brick to discover the true wonder that matters to them at its capacity. Instead of merely expressing our gratitude to the advanced technology, we are saving the lives of our children, those ingenuine artists, while aspiring every humankind to visualize their creativity to the next level. As the future waits for no one, seize the opportunity and secure your fortune today!
Sources
Baird, K. (2021, March 31). Snoop Dogg’s First NFT Collection: A Journey With the Dogg. BeInCrypto. Retrieved February 27, 2022, from https://beincrypto.com/snoop-doggs-first-nft-collection-a-journey-with-the-dogg/
Conti, R. (2022, February 15). What Is An NFT? Non-Fungible Tokens Explained. Forbes Advisor. Retrieved February 23, 2022, from https://www.forbes.com/advisor/investing/nft-non-fungible-token/
Hays et al., (2021, December 26). Nonfungible Tokens: A New Frontier. Cointelegraph Research. https://docsend.com/view/yfq9898d9ixz73qt
Liscomb, M. (2021, December 20). Lindsay Lohan’s Fursona And 12 More Weird And Wild Celebrity NFT Projects From 2021. BuzzFeed. Retrieved February 24, 2022, from https://www.buzzfeed.com/meganeliscomb/celebrity-nfts-2021
Nandini. (2022, February 20). Kupas Tuntas Trend NFT Artis Indonesia. Inbizia. Retrieved February 22, 2022, from https://www.inbizia.com/kupas-tuntas-trend-nft-artis-indonesia-288792
Sharma, R. (2021, December 14). Non-Fungible Token (NFT). Investopedia. Retrieved February 24, 2022, from https://www.investopedia.com/non-fungible-tokens-nft-5115211
Team, N. A. G. (2022, February 22). Snoop Dogg, NFT music and $44 million of success. NFTandGameFi. Retrieved February 27, 2022, from https://nftandgamefi.com/2022/02/22/snoop-dogg-nft-music-and-44-million-of-success/
Wright, K. (2022, February 8). K-pop NFTs: Binance and YG partnership will prioritize sustainability. Cointelegraph. Retrieved February 28, 2022, from https://cointelegraph.com/news/kpop-nfts-binance-and-yg-partnership-will-prioritize-sustainability
