Every NFT in China is obsessed with Chinese culture, why?
When Matt Hall and John Watkinson laughed at CryptoPunks on June 23, 2017, and offered the eccentric pixelated punks for free, the project was an experiment for the two creative technologists. The two [“were unsure if it would work technically and psychologically”] and certainly did not anticipate the NFT art scene to take off and become a sensation.
Four years later, as the “Wise Alien” and “Covid Alien” punks were sold for $7.5 million and $11.8 million, respectively, the NFT frenzy reached colossal proportions. Artists, collectors, and connoisseurs from all over the globe rushed into the community, including ones from China.
In China, NFTs are more commonly referred to as digital collectibles, a term that gained popularity after Alipay’s Dunhuang-themed NFTs were resold and offered for tens of thousands of yuan on Xianyu, an online thrift store. Due to the country’s cautious stance on crypto exchanges, Chinese collectors are unable to purchase NFTs with ETH on platforms such as OpenSea. As a result, people turn to domestic platforms such as IBox, OneArt, ArtMeta, etc.
Despite the fact that most sites in China prohibit the secondary trade of digital collectibles, collectors can still buy and sell their collectibles using the “gifting” functionality and conduct monetary transactions elsewhere. Additionally, there are smaller portals that facilitate secondary trade. Despite regulatory uncertainty and the possibility of smaller platforms being prohibited, Chinese collectors are eager to assume the risk. Digital collectibles frequently have five-figure (RMB) prices with substantial 24-hour volatility. According to Artwool, an NFT data website, there are 38 digital collectible platforms in China that allow secondary trading.
Many of the top-priced digital collectibles are cultural or historical-themed items. For example, a traditional Chinese watercolor series on NFT platform IBox was much hyped due to being the digital replicas of Zhang Daqian’s works, one of the best-known Chinese artists of the twentieth century. The series was initially released on May 25, for 199 yuan per piece, and skyrocketed in less than a month. Collectors bought the Zhang Daqian digital collectibles for more than 60,000 yuan. A piece from a peacock collection first released on May 7 for 99 yuan by Meng Qin, a nationally accredited visual designer, was sold for 33,350 yuan ten days later, an increase of almost 337 folds.
Digital collectible investors find traditional and culturally-themed items to be particularly endearing, which might strike NFT collectors as surprising, since many NFT works popular on OpenSea tend to have a more modern or futuristic aesthetic. For both the digital collectibles’ creators and collectors, traditional-themed items are a safer bet. Concepts such as watercolors and Dunhuang Mogao Grottos are already widely accepted by the public and have established fan bases, necessitating fewer efforts to market them through storytelling and IP-development. In addition, traditional and historical narratives tend to resonate more with mainstream values in China.
These culturally-themed digital collectibles also attract people for another reason – the fandom economy. Jay Chou, one of China’s most beloved singers and a cultural symbol for pioneering hip-pop culture, contributed greatly to the digital collectible hype in China. The singer helped promote Phanta Bear, a project jointly launched by Jay Chou’s fashion brand PHANTACi and EzekClub last year. The average price of Phanta Bear reached a high of 7.87ETH on the tenth day of its release, 30 times the original price. A Phanta Bear dressed in traditional Chinese attire was last sold for 33 ETH. The artist’s songwriting partner, Fang Wenshan, collaborated with Soka Art to launch a Fang Wenshan X Jay Chou co-branded limited edition collectible doll with NFT anti-counterfeit certification last year.
However, the hype of traditional-themed items also leads to a lack of originality and innovation, as artists can simply upload digital replicas of their past physical works to pass as NFTs. Regulatory risks in secondary trading easily startle collectors, and panic selling is common, which renders the market unsustainable and reduces the opportunity for innovation. Although it is more popular than other themes, not all collectibles with a classic theme can be successful.
In a group chat of collectors on ChangAn In, a digital collectible platform depicting Xi’an, a city in northwest China and one of the Chinese Four Great Ancient Capitals, collectors are loyal to their ChangAn In digital collectibles. “This group chat may become a group chat of future owners of apartments in Qujiang,” a collector joked. (Qujiang is one of the most expensive districts in Xi’an.) Two weeks after the intended release date, less than a third of the digital collectibles have been sold, to the dismay of the dreamers.
Given the unpredictability of the digital collectibles market, many Chinese collectors wish for exquisite Chinese digital collectibles to launch on overseas platforms such as OpenSea, thereby luring global collectors as China’s next cultural export. X Rabbits Club (XRC), a derivative of the Lengtoo IP with 65 million followers across the web, is often considered a pioneer in this field. XRC’s total transaction volume has surpassed 8,400 ETH. Its current floor price is 0.077 ETH, a substantial decrease from its former level of 1.5 ETH but still greater than its initial release price of 0.0502 ETH. Many XRC holders remain confident in the NFT since the club’s management team is still launching new efforts to revitalize the project.
The recently released ApsarasNFT, a collection directed by China’s Dunhuang Grottoes Protection Research Foundation, also fits Chinese collectors’ expectations well. ApsarasNFT is a series of hand-drawn paintings inspired by Dunhuang relics, first released at a price point of 0.0492 on June 26. Shortly after the debut of the presale, the NFT total transition volume surpassed 100E and ranked 44th in the OpenSea total list. Collectors are ecstatic about ApsarasNFT given its credibility – it’s extremely rare for authoritative institutions in China to authorize NFTs distributed outside of China. Although some question the legitimacy of the China Dunhuang Grottoes Protection Research Foundation, many Apsaras holders believe the project is a “hidden gem” and will soar to 1.0-1.5 ETH level in the future, according to discussion observed inside the Apsaras community.
As China’s tech giants join hands to shift the focus of digital collectibles away from their financial value and emphasize intellectual property protection, market fraud and price gouging would likely be further prohibited. When domestic platforms become less investor-friendly for investors, these Chinese cultural products will undoubtedly seek markets overseas. Crudely made artworks with weak narratives and poor community management will likely be eventually replaced by innovative projects that have both artistic value and economic value. The XRC and ApsarasNFT might be setting a precedent for NFT as cultural export projects, with many more to follow.
Photo by Aaron Greenwood on Unsplash