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Why Are NFT Avatars So Popular and What's Coming Next?

2021-10-07

Key Takeaways

  • NFT avatars are digital images of a character in a "profile picture" format generated by an algorithm. Each of them is individually unique.

  • NFT avatars are community-driven and hold intrinsic value as a form of digital identity, investment, and provider of community perks. 

  • NFT avatars are also evolving in terms of built-in functions, carrying more utility in the metaverse. 

  • NFT avatars are here to stay due to their role in the larger NFT metaverse. Collectors can get started with the Binance NFT Marketplace, where they can find an array of affordable NFTs to purchase. 

The NFT avatar market has grown rapidly. Some NFTs have even sold for millions of dollars, including ones from the CryptoPunks collection. This trend has sparked a great wave of curiosity and interest in the NFT scene and crypto space, where many have started their own collections. 

However, it can be a bit overwhelming getting started with NFT avatars. To help ease the process, we're going to dive further into what NFTs are, the reasons behind their popularity, and what we can expect in the future.  

What are NFT Avatars? 

NFT avatars are images of a character in a "head shot' digital profile picture format. Each of them is individually unique and generated by an algorithm with different traits in clothing, accessories, hairstyles, facial expressions, and more. These differences make up the character's look. NFT avatars are not just limited to animals, as many feature more human-looking characters, and others incorporate elements from science fiction and fantasy. Among the most popular collections of NFT avatars are CryptoPunks (the OG), Hashmasks, Bored Ape Kennel Club, and Avastars.

 

The Growing Trend of NFT Avatars

The growth in NFT avatars has the potential to skyrocket, fueled by private collector capital and institutional investment. For instance, Visa purchased the Cryptopunk NFT "Digital avatar With Mohawk" for $150,000. Many other NFT avatar projects have also been well-received. Ten thousand Bored Ape Yacht Club NFTs were sold within a day of their launch, while the Penguin NFT Club sold a Pudgy Penguin for $469,000.

 

The popularity of NFT avatars doesn't stop there. The social media movement and obsession with individuality in various networks also fuel demand. For instance, many collectors have changed their profile photos on social media to their NFT avatar headshots, and this trend has created attention in the NFT space. Many users share their NFT avatars through social media and community groups such as Reddit and Discord, encouraging more crypto investors to join the scene.   

 

In recent months, the success of Bored Apes has inspired a wave of similar clubs and a mania for NFT avatars among crypto-enthusiasts. Lucky Doge Club is one such example, with a successful launch on the Binance NFT Marketplace on August 27 that sold all of its 500 NFTs. 

 

Why Are NFT Avatars Dominating The NFT Market?

NFT avatars are more than just digital art. They are unique assets with intrinsic value and a large collectibility factor on the secondary market. But that's not the only reason they're popular:

 

A Sense of Community

Creating a sense of community is one important reason for the success of NFTs. An NFT avatar is also a ticket to access an exclusive community. For example, a Bored Ape NFT grants access to the Bored Ape Yacht Club Discord channel and a series of perks and exclusive benefits. It's also an indication of membership to an exclusive club. Many NFT avatar projects build community chats on social media, thus further enhancing the group feeling and the asset's reach and value. NFT collectors who own an NFT avatar are proud of this ownership, often displaying them as Twitter avatars. 

 

NFT avatar projects can also reflect the values the owner stands for. For example, the World of Women collection is driven by unique ownership clubs with different royalty tiers. It also has the vision to empower women through art and diversity. A WoW NFT avatar is a badge that demonstrates that the owners also stand by a specific value that can have a viral impact online. 

 

People often intrinsically want to belong to a particular group or community and identify with them. This aspect is one of the core values that NFT avatars provide.

 

Digital Status 

An NFT avatar is also a reflection of the owner's digital status. For instance, an OG CryptoPunks avatar's price has grown so much since its debut, thanks to the hype created around it. Given such a price, owning an NFT Punk and displaying it signifies that the owner has a real investment in NFTs. Users of other NFT avatars also reflect a sense of digital identity as part of an evolving NFT phenomenon. 

 

NFT Avatars in a Metaverse 

The core of NFT avatars is the community, which is the foundation for a metaverse – a digital world with its own forms of identity, audience, and governance. NFT avatars are slowly evolving to a stage of maturity in this regard, as evidenced by the various use cases of NFT avatar collections. Many projects are working to implement additional utilities, including royalties, character upgrades, and gamification. 

 

One of the more notable projects is The Sandbox project. The Sandbox collaborates with NFT avatar projects that allow collectors to use their avatars in the metaverse. Examples include Bored Ape Yacht Club, Gutter Cats, Hashmasks, and more. Through the interoperability of NFTs, users can turn 2D collectible images into 3D playable avatars that are animated and express whole interactions within The Sandbox.

 

Avatars As An Investment

Value-wise, NFT avatars are limited in number and, hence – scarce. This factor drives investors to purchase them, hoping that their value will rise in the future. If one avatar in a collection appreciates, the rest often follow suit. The potential of NFT avatars, especially in the metaverse, has great potential. The popularity and longevity of NFT avatars also encourage crypto enthusiasts to view these collectibles as a form of long-term investment. 

Read: How to Assess the Value of an NFT?

The Future of NFT Avatar Projects 

NFT avatars are here to stay and will continue to evolve in terms of utility and features. This fact will build a more inclusive NFT ecosystem with a combination of different functionalities, including royalties, staking, gamification, and more.

 

To get started collecting NFT avatars, users can check out the Binance NFT Marketplace, where we feature affordable and quality NFT avatar collections like Lucky Doge Club, Crypto Sharks, Angry Pandas, Cyber Doberman, and many more. 

 

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