Key Points
NFT derivatives are a series of NFTs that resemble popular NFT projects.
While some NFT derivative projects are not created with the intention of building long-term value or interactive communities, not all NFT derivative projects are just for cash.
When considering purchasing any digital asset, you should always do your own research to ensure you understand the associated risks and what you are buying.
In 2020, non-fungible tokens (NFTs) came out of nowhere and have since overshadowed multiple industries, becoming a cultural trend of the times. Now the market value of non-fungible tokens (NFTs) has reached billions of dollars.
If you keep an eye on the NFT market, you must have come across a series of NFTs that look like popular NFTs. These NFTs are called NFT derivatives, and they usually contain the properties of existing items without introducing more new elements.
Let’s quickly review everything you need to know about NFT derivatives.
What are NFT derivatives?
For those new to the industry, NFTs are cryptographic tokens that represent unique digital assets hosted on a blockchain. Each token is a unique asset that is either fully digital or a tokenized version of a real-world object (such as real estate or clothing). In addition, each NFT contains unique metadata and identifiers that distinguish it from other tokens. This ensures that they are virtually impossible to tamper with or forge. Currently, the most common use case for NFTs is collectibles, such as digital art.
NFT derivatives refer to NFT series that combine the attributes and styles of popular NFT projects. In addition to being visually similar to the original NFT, the names of the derivatives are also similar.
Popular NFT series such as Bored Ape Yacht Club (BAYC) and CryptoPunks are the main inspiration for many derivatives. Some NFT derivative projects even absorb elements of two original projects at the same time. For example, the Derivative Ape Association (SODA) is an NFT derivative project that combines the characteristics of BAYC and Doodles.
Most derivative projects do not obtain authorization from the NFT projects they imitate, that is, they use elements from various versions of existing projects. Unless the original project issues a formal cooperation notice, you can assume that all derivative NFTs are unofficial.
However, the founding team of a popular project may release subsequent offerings as a by-product of the project. This type of NFT series is usually called an official derivative project. For example, the Mutant Ape Yacht Club and the Bored Ape Kennel Club are both official projects released by the founder of BAYC, and they both have NFT utilities such as exclusive community access and unique membership benefits.
Why are people keen on creating NFT derivatives?
NFT derivatives are on the rise, which is closely related to the widespread adoption of NFTs around the world. The NFT community has mixed opinions on derivative projects. Some people think that they are plagiarizing existing projects and are not original works, while others think that they are a tribute to the original.
In any case, the original intentions of digital creators to create derivative projects may be varied. Moreover, unofficial derivative projects (also known as subsidiary derivative projects) are also fundamentally different from the by-product releases released by the project's founding team.
NFT derivatives projects: pros and cons
As NFTs become more popular and their market value surges, some creators create derivative NFTs to profit from similarities with popular projects. Such derivative projects often show the characteristics of runaway scams.
Their main goal is to sell NFTs, the more the better. The individuals or groups behind these derivative projects may hype their series on social media, promising exciting roadmaps and other attractive benefits, but have no intention of fulfilling any promises even after the minting date. Most buyers are deceived too deeply, and it is too late when they find out, which is a pity.
The best way to avoid falling victim to a runaway scam is to do your own research (DYOR). Investigating the project team and evaluating their long-term plans is a tried and true rule. For more information on how to evaluate NFT projects, read our article 6 Key Indicators for NFT Collectors to Evaluate NFT Projects.
If you find a series that does not meet our content guidelines while browsing the Binance NFT website, please report it. We will investigate and remove it if we find that they violate any copyrights or are suspected of running a scam. For more information on how to report to the Binance NFT team, please refer to our guide "How to Report Violations on Binance NFT".
While some NFT derivative projects are not created with the intention of building long-term value or an active community, not all NFT derivative projects are just for cash. Sometimes, it can be an interesting way for community members to explore their creativity. For example, Noodles and Jenkins the Valet are both NFT derivative projects that have built lasting value and are supported by the founders of the original collectibles.
In addition, NFT derivative projects with solid roadmaps and long-term plans have the potential to diversify the industry and even lower the barrier to entry for novice collectors.
Welcome to Binance NFT and start your collection journey now to collect a wide range of high-quality NFTs!
in conclusion
While derivatives may help diversify the NFT market, NFTs come in all forms. Some are created based on the original project, while others are homages to the original project.
Now you have a basic understanding of what NFT derivatives are and how to identify them. Remember to always do your own research and don’t be afraid of missing out (FOMO). Before purchasing any digital assets, make sure you are aware of the relevant risks.
Explore the colorful NFT world
Artists, digital creators, and NFT enthusiasts explore and trade digital collectibles through Binance NFT. Browse and discover high-quality NFTs through the platform. Stay tuned for NFT-related updates through our Twitter and Telegram accounts!
Like this article? Check out these related articles for more information:
(Support) "Introduction to Binance NFT Market"
(Blog) The best way to display your NFT collection
(Blog post) Technical Analysis: What is NFT Metadata?
(Blog) NFT Authentication: Fighting Counterfeit NFTs and Scams
(Binance Academy) Seven NFT Use Cases
Disclaimer: NFT trading is unregulated and therefore the market is highly risky. Please trade with caution. Any losses are irrecoverable. You understand and agree that the risks associated with accessing and participating in this event are at your own risk. Binance NFT Marketplace does not make any suggestions or recommendations regarding your NFTs.