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Oxalus Insights

NFT Avatars Are Growing Fast & What Is The Future 2022

Guides Nov 27 2022

Since the rise of Web2 platforms like Yahoo, Facebook, etc., the idea of a digital avatar has flourished. As NFTs have grown in popularity, a new type of digital avatar known as NFT avatar has emerged. 

Avatars created with NFT quickly became a worldwide fad because of their many advantages over older, more basic digital representation forms. They are based on novel technology, are highly personalized, display customizable, and are exchangeable. In the past, a social media avatar was worth zero since it can be copied and pasted by anyone on the internet anytime. Today, one Twitter avatar can be worth millions of dollars.

So what exactly are NFT avatars? Why have they become dominant on social media? And what will their future look like? Let’s explore together!

What Are NFT Avatars?

NFT avatars are non-fungible tokens that come in the form of avatars, which are digital profile pictures of fictional characters in “headshot” style. Each collection of NFT avatars is defined by a group of traits (such as skin tone, haircut, clothing, facial expression, etc.), and each avatar in that collection is created algorithmically to have its own unique and random artistic traits. Not all NFT avatars are animals; several include humanistic figures, and some even draw inspiration from science fiction and fantasy. The trend in NFT avatar design right now is toward a cartoonish or pixelated aesthetic.

What Are NFT Avatars Used For?

There are several applications for NFT, such as:

  • Representing users’ digital identity

These avatars are digital representations of users that can be used to interact with NFTs and other blockchain-based applications like NFT games and metaverses. It can store data or information about a user and have users create unique and personalizable experiences in the blockchain world.

  • Representing community membership

In many cases, possessing one of these avatars indicates membership in a community. Members of the “Bored Ape Yacht Club” get exclusive spiritual and material rewards, including NFT airdrops, invitations to exclusive community events, and access to a private Discord channel populated by other very influential people.

The creators’ own creativity is the only real constraint on what NFT avatars may do. Possibilities for NFT avatar use cases will increase as more people get familiar with and start utilizing them.

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Is NFT Avatar A PFP NFT?

The alternative term for NFT Avatar is “profile-picture NFT” (PFP NFT). Consequently, you’ll often hear about well-known NFT Avatars projects like Bored Ape Yacht Club, CryptoPunks, etc. being referred to as PFP projects.

The Dominance of NFT Avatars

The market for NFT has dramatically accelerated in the previous few years, with the domination of NFT avatar projects

The first NFT project to go viral was CryptoPunk, dubbed Ethereum’s oldest NFT project (although in reality, it may not be the first NFT project on Ethereum), and led to the explosion of NFTs in 2021.

In January 2022, NFTs reached a peak on OpenSea with a $5B monthly trade volume thanks to the rise of NFT Avatars such as Bored Ape Yacht Club (BAYC), Mutant Ape Yacht Club (MAYC), CloneX, and Azuki. While BAYC went beyond a 100 ETH floor, Azuki’s floor price rose 163% from 4.29 Ether (ETH) to 11.29 in just two weeks after its launch on January 21. Currently, avatar NFT projects make up 8 of the top 10 in terms of total trading volume on OpenSea.

Despite the global NFT ecosystem undergoing a short-term setback due to the negative market environment, NFT avatars are likely to remain a lasting trend thanks to the actions of social media giants. Twitter allowed its users to switch to NFT avatars in January 2022. Shortly afterward, Meta Platforms Inc., the parent company of Facebook and Instagram, announced that NFTs will also be accepted as profile images. Reddit is no exception when it comes to releasing its own Collectible Avatar collection along with its own blockchain wallet in July 2022.

With the push of social media, NFT avatars will become increasingly popular and in demand among the general public in the near future.

Why Avatars Dominate the NFT Market

NFT avatars are attractive due to several factors beyond their collectibility and intrinsic value.

Scarcity

Demand and the price for NFTs rise in tandem with their increasing scarcity. Most avatar collections are limited to just 10K or 20K avatars, with each piece being completely one-of-a-kind. That picture can be copied and pasted by anyone on the internet, but the avatar’s true owner retains a rightful claim. This motivates investors and art collectors to amass NFTs of high-profile projects in the same way they hoard Picassos.

Community

One of the main factors contributing to NFTs’ success is the sense of community they foster. For certain NFT collections, an entire community has sprung up to provide users with benefits beyond what was originally intended. Avatar ownership is sometimes a prerequisite for joining these communities, some of which are rather exclusive, like the Bored Ape Yacht Club. Indeed, the pride of belonging to an exclusive group is a powerful incentive for human action, making the possession of NFT avatars of considerable spiritual significance.

Digital Status

An NFT avatar may also be seen as a representation of the owner’s digital standing. Because of all the attention, it has received since its release, the value of an original CryptoPunks avatar, for instance, has skyrocketed. With a price tag like that, it’s clear that the person flexing an NFT Punk has a significant financial stake in NFTs.

The owner’s beliefs and ideals can be reflected in an NFT avatar project as well. The World of Women (WoW) series, for instance, is propelled by several ownership groups that charge varying amounts in royalties. A WoW NFT avatar is a symbol that aspires to encourage female independence via cultural expression and diversity.

Investment Value

Due to their limited supply, the potential for widespread adoption, and active promotion on social media, NFT avatars appear to be promising long-term investments. An NFT avatar is a great investment opportunity for those who enjoy the prospect of financial gain from digital assets on the next bull run.

The Future of NFT Avatar

NFT avatars are here to last and their functionality and features will evolve further. As for what is next for NFT avatars, the future is wide open. In the not-too-distant future, NFT avatars will serve as our digital identities across a wide range of platforms, including virtual worlds, social networking, gaming, and educational simulations. Also, businesses may utilize NFT avatars for a variety of purposes, including online customer support and virtual trade displays. It will be fascinating to watch where this cutting-edge technology goes from here.

Looking for a fresh new online persona? Try creating or purchasing an NFT avatar today!


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