All kinds of celebrities are getting into the business of non-fungible tokens, or NFTs – tokens that take the form of digital assets like cartoons (or pieces of art, as admirers prefer to describe them).
Professional footballers in England have gone crazy for high-profile NFTs like the Bored Ape Yacht Club (BAYC) brand, for instance, spending huge sums on the collection of 10,000 unique designs.
Rapper Eminem is another fan of the Bored Apes, acquiring one of the cartoon monkeys on New Year’s Eve for almost half a million dollars.
Other celebrities are creating NFTs themselves, like the actress Lindsay Lohan, who has released a canine-focused token she calls “fursona”. Hotel heiress and celeb Paris Hilton has done the same (she is said to be so enraptured by the world of blockchain at the moment that she called two of her dogs Crypto Hilton and Ether Reum).
NFTs have been gaining popularity in China as well, with Mandopop star Jay Chou grabbing headlines when Phanta Bears, a collection of 10,000 algorithmically-generated digital avatars – and a spin-off from Chou’s PHANTACi fashion brand – sold out in less than 40 minutes on New Year’s Day. Ezek, a blockchain entertainment platform, hosted the sale. Fans of the craze point out that the tokens are based on blockchain, which provides proof that there is only one owner of each design, making them “provably scarce”.
NFTs and the celebrity world are a match made in heaven, it seems. For a start, top-end tokens like the Bored Apes are already too expensive for most buyers. Celebrities have the financial means to trade them, however. They can also bring starpower (and pre-existing fanbases) to the launches of new tokens. In a sign of the enduring popularity of the 42 year-old singer, the 10,000 NFT pieces in the Jay Chou range were sold for a total of about Rmb62 million ($10 million), for instance. Each Phanta Bear was priced at 0.26 Ethereum (ETH), or nearly $1,000 in traditional cash.
Some of the buyers then resold the avatars at higher prices on trading platform OpenSea. The most expensive one – Phanta Bear #9999 – soon changed hands for 20 ETH (around $77,000).
Similar to other NFT avatars, each Phanta Bear has unique features. “The Phanta Bear is a collection of digital collectibles generated by 10,000 algorithms, which can double as a membership card for the Ezek Club. Each Phantom Bear has a unique set of traits and unlocks different, unique access rights for its owner,” blockchain platform Ezek explained.
Chou’s record company JVR Music then issued a statement saying that the singer hadn’t participated directly in the planning or management of the NFT launch nor had he taken any profits from it. Nevertheless, commentators reckon that Chou hopes to sell virtual NFT clothing in future. There was speculation that he will host virtual concerts on Ezek’s metaverse platform as well.
For the most part, mainland Chinese consumers have been excluded from the NFT mania. That’s because trading in NFTs typically requires payment in virtual currencies, which are strictly controlled in China, because of concerns they will be exploited for speculation and capital flight.
Companies like Tencent and Bilibili have been testing the water on NFT issuance. But the difference is that the tokens serve only as collectibles. Once purchased, they cannot be resold, unlike international counterparts, which are traded on platforms such as OpenSea.
There are still warnings to traders that many NFTs won’t hold their value. “Related research on blockchain is still in the early stage and business models on NFTs are not perfect,” Chief Business Review advised. “Whether it is possible to make money buying and selling NFTs at high prices is hard to predict.”
“In the long run, the value of collectibles needs to be able to stand the test of time in order for its value to last. But celebrity posters and collectibles like baseball cards are all directly related to the popularity of the celebrities, just like these NFTs,” Yang Ga, an NFT curator, told TMT. “If these celebrity-backed NFTs do not have long-lasting aesthetic value, it means their prices can go up very fast and come down just as quickly.”
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