Non-fungible tokens, or NFTs, have captivated a growing audience. The concept of tokenized art and utility provides many benefits, although the industry is still in its infancy. Profile picture projects are an intriguing segment, even though they might not make for the best long-term investments.
The Rise of Profile Picture Projects
NFT artists and creators were quick to acknowledge the potential of non-fungible tokens. It allows for creating a collection s small or large as the artist would like, as images can be auto-generated. It didn’t take long before the first NFT projects offering profile pictures came to market. As excitement regarding virtual worlds and the metaverse grows, any trend related to it is likely to note success.
Moreover, until 3D avatars become commonplace, profile picture projects have a chance to thrive. Social media plays a crucial role in society, and using a fancy or unique profile pic can enhance one’s account. It is also a way to show off support for NFT projects, creating a win-win situation. These days, all influencers have profile picture projects they promote, either briefly or for the long haul.
Using an NFT as a profile picture adds a layer of privacy to one’s online profile. Rather than putting up a real-world photo, one can “hide” behind an NFT from a collection. Although that layer of privacy is relatively thin, these profile picture projects find traction among users on Twitter, Facebook, Discord, Telegram, and so forth. Moreover, the concept of a profile picture has been revamped, of sorts, thanks to non-fungible tokens.
CryptoPunks Sets The Tone
Historically speaking, CryptoPunks is widely considered the first successful venture in the profile picture projects segment. Larva Labs created 10,000 algorithmically generated portraits of punks in a 24×24 pixel format. These NFTs were given away for free back in 2017, allowing anyone with an Ethereum wallet to claim them. It took until 2021 before the Crytopunks started gaining massive traction, though.
Multi-million dollar sales are average for this collection today. Additionally, CryptoPunks still generates roughly 4,000 ETH in weekly volume on OpenSea, with most of the NFTs holding a price floor of 100 ETH or more. The once free-to-claim non-fungible tokens are now worth over $450,000 on average, indicating the power of profile picture projects.
Although it took a while for other PFP projects to come to market, the industry is oversaturated today. Virtually every project can be classified in the PFP section, as that is what they will be sued for by most people. Whether it is pixel art, real art, devils, dogs, pandas, Satoshi Nakamoto, or anything else, nearly all NFT collections are profile picture projects.
More PFP Projects Isn’t A Good Thing
Several successful PFP projects have followed in the footsteps of CryptoPunks. Bored Ape Yacht Club (also created by Larva Labs), Pudgy Penguins, PixelCats, Mutant Ape Yach Club, and others have all seen their share of success. However, the vast culmination of profile picture projects raises many questions that need to be addressed eventually.
The first question is whether it is still worth investing in PFP projects today. As more projects fail than succeed, it remains a risky endeavor. Additionally, the chance of “flipping” these NFTs for a profit is much lower than during peak interest in the Summer of 2021. While it may still be possible to flip some NFTs today, most projects may not lend themselves to that purpose.
Furthermore, it is painfully apparent most NFT PFP projects lack utility. They serve no greater purpose, and due to the sheer amount of similar projects, will not retain their value. Artists need to find ways to bring utility to these projects, but even that might not be sufficient to warrant long-term interest. PFP collections often span thousands of NFTs, and only so many people are willing to buy them.
Is There A Future For Profile Picture Projects?
Even though many NFT projects will fail within the first [few] week[s], there will always be those that succeed. Most of those will be profile picture projects, either with or without utility. There will always be a certain appeal to such projects, regardless of the art or how they have been generated.
One thing to look forward to is potentially using the profile picture NFTs in the metaverse. Rather than serving as a social media avatar, they could become one’s 3D avatar in the virtual world. Several NFT projects have established a presence in Decentraland or other virtual worlds, paving the way for exciting future developments. Whether that warrants investing money into any of these projects is a very different matter, though.