Finding Gold Beyond PFPs: NFT Genres Worth Exploring

Last week, I discussed four questions a friend posed to me via WhatsApp regarding the changes in the NFT landscape since he exited the scene in late 2021. Many returning to the NFT space in due course might have similar questions. You can catch the full Q&A recap in the article “4 Questions Newcomers Have About NFTs.”

There was a question in that set of Whatsapp messages which requires its own full length feature: “What are the Top 5 projects to hold during this bear market?” While it wouldn’t be wise to make bold predictions and list 5 projects individually, it does prompt a broader question about which types of NFTs have thrived during this market downturn and which ones have struggled.

Let me start by emphasizing that “this is not financial advice.” With that out of the way, if you’re just returning to NFTs and looking at the charts, you’re probably thinking “What on EARTH has happened to the price of PFP projects?!”

PFP Projects Dethroned

The heyday of the PFP will likely return, but the primary function of a PFP is to flex wealth, status, or affiliation with an exclusive community. During this bear market, this need diminishes. Mainstream attention has waned, so who is there to flex to? The 30 people left on NFT Twitter!? Thus, NFT investors have looked to three categories during this time in place of PFPs:

Membership NFTs: These projects have shown greater resilience compared to PFPs. Token-gated communities grant access to like-minded, intelligent, well-connected individuals—a valuable resource during bear market periods where focus is on building. Neo Tokyo serves as a notable example of this.

Utility NFTs: These are much like membership based NFTs in a way, but there’s a greater focus on the offering of access to tools and learning resources. These may prove to be wise investments for those who want to be well-prepared when the bull market returns and they’re already proficient in their chosen area of expertise. Steady Stack is an example of a utility based NFT project.

Art NFTs: For those inclined to be patient and wait out the bear market, art remains the best choice. Art endures well, especially when investors seek quality havens for preserving value. The absence of utility (usually) gives art its unique allure—it just “is,” devoid of the lofty expectations that often come with NFT projects.

Digital Artifacts on Bitcoin

NFTs on Bitcoin, or ‘digital artifacts’ as they’re more commonly referred to within the Ordinals space, are a solid pick to do well once we come out of the bear. Unlike NFTs on other chains, Ordinals are enduring digital artifacts etched onto the most robust and decentralized database ever created. In layman’s terms, standard NFTs are hosted on servers, whereas Ordinals are immutably inscribed onto individual satoshi’s. “There is no second best” as Saylor tells us, and the man himself has spoken in favor of them.

Like on any chain, a lot of fluff has been inscribed on Ordinals. However, it’s widely accepted that inscriptions that are sub-10K (within the first 10,000 inscribed) and collections with either utility, a strong community, or are fine art, are expected to hold their value. It’s reasonable to assume that when interest returns to Bitcoin, potentially driving it to new all-time highs, Ordinals could attract plenty of attention.

Final Thoughts

PFPs were all the rage during the NFT mania, dominating the scene even after the wider hype subsided. However, as enthusiasm dwindled and projects either ran out of fresh ideas or diluted their supply with cash-grab secondary and tertiary collections, the bubble burst, resulting in a cleansing of sorts. This has shaped the current landscape, where projects with genuine value thrive while superficial ones struggle.

PFPs will undoubtedly make a comeback, but it may not happen until more prosperous times return and people have disposable income to spare. Until then, consider investing wisely in projects and founders committed to the long term, and surround yourself with communities and individuals who can contribute to your journey of self-improvement.