• Will an NFT “digital collection” with Chinese characteristics be successful?

  • Recently, NFT platforms led by Tencent and Alibaba have removed the word NFT and changed their names to “digital collection” after receiving communication from the relevant regulators.

    On October 31, the NFT Alliance joined hands with the China Academy of Fine Arts, Hangzhou Internet Notary Office of Zhejiang Province, CCTV Animation Group, Hunan Provincial Museum, Ant Financial Services Group, Jingdong Technology, Ali Auction and Tencent Cloud to release the “Self-Regulatory Convention for Digital Culture and Creative Industries”. A set of NFT model with Chinese characteristics began to take shape. It includes 11 consensus items, namely: empowering the real economy, promoting national culture, promoting industrial development, insisting on originality, maintaining value support, protecting consumer rights and interests, controlling alliance chain technology, safeguarding network information security, eliminating virtual currency, preventing speculation and financialization risks, and preventing money laundering risks.

    It is fortunate for the domestic industry that NFT is not subject to comprehensive regulation. But will this NFT with Chinese characteristics succeed? We don’t know, but at the very least, it has a completely different logic than the current NFTs in the Western world.

    First, the logic that drives it

    The core reason for this year’s NFT trend remains the logic of the cryptocurrency industry, building a marketplace platform for constant trading, building a community of NFTs and traders, all backed by fast profits. Profitable trading remains the core reason for NFT’s popularity, with OpenSea’s total trading volume already exceeding $10 billion and a steady daily trading volume of around $50 million. Most participants are in it for the profits, not for the collection.

    Chinese style “digital collecting” requires “resisting any form of malicious speculation on the price of digital art” and it is not yet known if trading will be open and auction houses are barely involved, so it is a different nature of driving attribution.

    Second, the logic of certainty

    The second reason for the mainstream acceptance of NFT is that the decentralized public chain makes the collection of digital art possible due to its legitimacy and liquidity. It is because digital collectibles are susceptible to copying and infringement that the blockchain has become more valuable. To ensure ownership of NFTs, the vast majority of NFTs have chosen the decentralized ethereum public chain over other more centralized public chains. Domestic digital collectibles based on affiliate chains such as those owned by Tencent and Ali only have the form of a blockchain and therefore have no realistic claim to ownership, losing their significance as collectibles.

    Third, the logic of participation in creation

    In the traditional NFT network, anyone can create and upload on OpenSea, and any user with a cryptocurrency wallet can directly participate in buying and trading. However, for Chinese institutions, it is not possible to create and participate and trade in a completely free and open manner and must be approved, making them difficult to be accepted by the international NFT community and ecosystem.

    Fourth, native IP

    NFT’s success is serendipitous. The formation of native NFT head IPs led by CRYPTOPUNKS and bored ape yacht club has led to the formation of a large number of native waist IPs, as well as many innovative projects such as Art Blocks and NFT DAO.In contrast, digital collectibles with Chinese characteristics currently have no independent native NFT IPs or images, and are more They are more often used as accessories for celebrities, games or even corporate advertising with a strong marketing overtone.

    In general, digital collectibles with Chinese characteristics are very different from traditional Western NFTs in terms of underlying logic and overall ecology. We can’t tell if it will be successful in the future, but it will certainly be a completely different route. In contrast, Chinese game studios, which already have a lot of experience going overseas and are generally very good, are more likely to stand out from the competition in the overseas industry chain.

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