The Rise of Randomly-Generated NFT Collections and Community NFTs: Buy your ticket to elite status?

  • As the nascent NFT evolves, one clear trend has emerged. The dominant players in the NFT market are mass producers of randomly-generated NFT collections of sets, typically 10,000 NFTs, that all involve the same visual character–bored ape, pudgy penguin, or crypto punks–in a set. Then a computer program randomly generates various differences in facial and other features, and backgrounds.
  • For example, the Pudgy Penguin NFTs look like this, with 8,888 penguins with the same central character, but with changes in features:
  • An additional aspect of buying an NFT from a collection is often getting extra perks, such as a membership to an exclusive club of owners of NFTs from the collection. For example, buy a Bored Ape Yacht Club NFT and you get membership into the club, “whose benefits and offerings will increase over time.” It’s not exactly clear what those benefits are or will be, but Steph Curry is in the club. The Utah Jazz team is offering its own NFTs, which will give buyers access to a virtual locker room. Of course, the price of admission to buy popular NFTs is quite high and probably out of reach for the average consumer.
  • NFTs are also infiltrating in the gaming world. Players can buy NFTs that become part of the gaming experience, such as the “skins” characters wear in the online game. These gaming NFTs can be viewed as community NFTs because they enable a person to gain perks in the community of players for a particular game.
  • To return back to the issue of randomly generated collections of NFTs that are mass produced by computers, some critics might not like the development, especially if they dominate the market and diminish the opportunities for human artists. Others may question the elite memberships attached to high-priced NFTs as only further entrenching the wealth disparity in the United States and the world. To get into the Bored Ape Yacht Club, for example, you’ll need at least $150,000 to join.
  • These are valid concerns. We hope to explore them again.