AI_Video_LP/webSite/content/blog/nftavatars.md

+++ title= "What Is an NFT Avatar and why are NFT Avatars so popular?" date = "2022-01-28T18:34:55+08:00" tags = ["NFT"] type = "blog" categories = ["NFT"] banner = "https://editorial.mintable.app/wp-content/uploads/2021/09/avatars.jpg" +++

Non-fungible tokens (NFTs) have become a hot topic since 2021. The crypto community is going crazy over collectible NFT avatars. This isn’t a new trend – projects such as CryptoKitties and CryptoPunks were some of the earliest NFT projects on the Ethereum network, and are still some of the most successful projects to date. In the recent months, more still have been hitting new highs, such as the Bored Ape Yacht Club avatar collection, which sold $96 million USD worth of NFTs in under an hour, and Alpacadabraz which launched their 2D NFT project in October 2021 will be coming out with a massive 3D Collection drop and heavily investing in their sandbox on the Metaverse. Naturally, the popularity of NFTs has quickly led to the creation of many new ones. Deciding which NFTs to invest in can be overwhelming, not only because there are so many NFT projects to choose from, but because there are also new ones being released almost daily.

What Is an NFT Avatar?

NFT avatars are algorithmically generated digital images of cartoon or pixelated characters, usually from the shoulders up, that are in a “profile picture” format. Each NFT avatar is completely unique, with an array of distinguishing traits (i.e., clothing, hairstyles, accessories, etc.). The avatars can be cartoon animals, humans or abstract creatures, with fantasy and science fiction elements. Many NFT avatar projects have other functions built-in, or at least planned for the future. For example, some NFT avatars give their holders access to special virtual clubhouses, while others may have future implementations in games or multimedia projects.

The market for NFT avatars grew rapidly in 2021, with numerous NFT avatars selling for millions of dollars. This trend sparked a lot of curiosity and interest in NFTs and crypto art, and many enthusiasts have started investing in and creating their own collections. NFTs may sound like a passing fad, the technology has the potential to revolutionize digital art, as well as ownership of assets and collectibles in NFT games. NFTs are one-of-a-kind cryptographic tokens enabled by Ethereum’s ERC-721 standard, indivisible and therefore completely unique.

Therefore, NFTs could find use cases in many different industries because they can tokenize pretty much anything: art, music, pictures, videos, GIFs, in-game collectibles, certificates and tweets — even guides like this one.

Why Are NFT Avatars So Popular?

The growing demand for NFT avatars has predominantly been fuelled by social media discussions about the new tech, and the exorbitant amounts private collectors and institutions are paying for them. Many NFT collectors have changed their profile pictures on social media to their NFT avatar headshots, bringing further attention to the NFT space. While the market for NFT avatars is still relatively niche, many of the rarer NFTs from popular projects have seen an explosion in secondary market value on NFT marketplaces like OpenSea, with some selling for many times their initial mint price. There’s no doubt that the market for NFT avatars is growing, as evidenced by the discussions they incite on social media, as well as blockchain data. For example, NFT projects were reportedly responsible for an increase in Ethereum gas prices in August 2021.

Beyond their collectibility and intrinsic value as unique assets, NFTs are popular for the following reasons:

1. Community: NFT collections typically have communities built around them. Owning an avatar is usually a ticket to access these communities, some of which are quite exclusive. For instance, when you own an Alpacadabraz NFT, you can use them in a variety of fun, browser-based competitive games to not only show off your unique alpaca but also to win cool prizes.
2. Status: The NFT avatars in an investor’s collection are a reflection of that collector’s digital status. For example, the OG CryptoPunks NFT avatars have become so well-known since their debut in 2017 that owning even one of them and displaying it publicly is a serious flex in the crypto community.
3. Scarcity: Each individual NFT is completely unique. You can copy and paste an avatar as much as you like, but only the token holder can claim real ownership. Scarcity and limited quantity have helped to drive up the price of and demand for NFTs. The older and rarer an NFT, the more coveted and expensive it is. If just one avatar in a collection appreciates in value, then the entire collection often follows suit. Many collectors and enthusiasts view NFT avatars as a type of long-term investment.

What Are NFT Avatars Used For?

NFT avatars may look like simple digital headshots of cartoon or pixelated characters — but they’re much more than that. Beyond the typical hallmarks of an NFT avatar, such as the profile picture format that shows a headshot of a character from the shoulders up, each avatar is completely unique and non-duplicable.

The avatars are created with programmatically generated traits to guarantee their uniqueness, both visually on a surface level and internally at a code level. The uniqueness of NFTs makes them useful for a variety of uses beyond simple aesthetics. Some prominent examples of use cases for NFT avatars include:

1. Gaming: Several play-to-earn crypto games published in 2021 use NFTs to create collectibles and items that players can own and trade on NFT marketplaces and in in-game virtual worlds.
2. Fundraising: Several nonprofits have turned to NFTs as a form of revenue generation. Some are minting NFTs as rewards for donors, while others are creating NFTs and auctioning them as part of fundraising initiatives.
3. Crypto Art: The digital art world has a lot to gain from NFTs as a new method of tracking ownership of commercial rights and establishing authenticity. Much of the craze around NFTs stems from the sale of crypto art. For example, in early 2021, digital artist Beeple sold an NFT artwork at Christie’s auction house for the crypto equivalent of $69.3 million.

Are NFT Avatars a Good Investment?

Of course, there’s no sure-fire way to tell if the NFT collectible you buy is going to appreciate in value. NFTs offer a unique but high-risk opportunity to make huge profits, but there are no guarantees in the crypto world. Unless you’re a seasoned investor, the best course of action is to buy NFTs from projects you’re actually interested in and which provide attractive perks to NFT holders. Once you obtain an NFT, it’s a waiting game to see how much another investor is willing to pay you for it.