“Can someone explain to me why NFT ‘clones’ are selling for so much?”
Redditor littledoofus asked Reddit a question last month.
There’s been a lot of buzz about NFTs lately, and that includes the rise in popularity of NFTs with collectors that resemble popular artworks. LittleDoofus wants to know why we seem to be assigning so much value to NFTs, and whether or not the rise in popularity of NFTs is just a fad?
LittleDoofus’ post continued:
“Ok so I kinda understand how someone might see the CryptoPunks or Ether Rocks projects as valuable digital collectibles, but what’s going on with the craze over the clone projects? I see so many lazy CryptoPunks clone projects (no affiliation to Larva Labs) with no-name ‘artists’ behind them selling for a lot.. why? Is it just scammers trying to scam each other?”littledoofus
The crypto world is filled with copy cats. The clones sell for a fraction of the price of the original. Some people even think these copies are worth something, but they aren’t. They just make some extra money while they are young. It’s a rip-off. Clones also exist across different blockchains. SolPunks, for example, was built on the Solana blockchain and “is in no way affiliated with Larva Labs and/or CryptoPunks” built on Ethereum. But, the punks look the same. There are also NFT “derivatives” that cash in on the popularity of a well known brand by using a similar “punk” or “ape” name. These clones are copycats, imposters, tributes, spinoffs, or rent seekers, depending on who you ask.
The crypto ecosystem is all about recreation, remixing and the spirit of sharing. SushiSwap began as a clone of Uniswap’s code, and later forged its own path. Crypto community builder and venture capitalist Daniel Bar points to the current boom in generative art as an example of copying stuff that’s popular.
“It’s a bit like ICOs in 2017, mimicking grows like wildflowers,” he says. “But it does help the industry learn and develop”.
He admits that cloning isn’t necessarily the best way to earn more than the original project, but it does sometimes attract some money that would otherwise go to the original project.
“The people who buy the clones could have bought the real ones so, arguably, they may be devalued, say if one less bidder bids,” he says. “But, the real ones have actual perks that the fakes don’t so it’s like buying a fake Rolex.”
Crypto communities are also complex, ideological, and multi-faceted. While the unique strength of blockchain is authenticating “stuff” to enable trust between partners, there is, of course, much speculative spending on digital assets in the current bull market, informed by memes and counter-culture. Valid clones do make sense in this context, but let’s start at the beginning. What is the funk/phunk? This definition frames the whole conversation about the emergence of NFTs clones, and why people buy them.
The open source revolution has driven the high price for Clones.
CryptoFUNKS and Sad Frogs District are two well-known examples of copyright claims leading to copyright claim takedowns of cloned projects. The most well-known NFT marketplace Open Sea’s de-listing of NFT clone CryptoFUNKS in October ironically probably only increased its popularity. OpenSea had received a takedown notice from Larva Labs requesting the delisting due to copyright infringements. This angered the community who had already invested $4 million in the project and was worried it would potentially leave the NFTs worthless. In August, OpenSea also delisted some 7,000 minted images of Pepe the Frog in Sad Frogs District on its Discord channel for copyright infringements filed by the character’s creator, Matt Furie. This angered the community who had already invested $4 million in the project, and it was worried that it would potentially leave the NFTs worthless.
Bokky PooBah is a well-known crypto advocate who has taught free blockchain coding lessons for years. A Sydney-based Malaysian, he fell in love with the tech and its ideological underpinnings and has offered free blockchain coding lessons for free for years. His coding academy has no corporate support and no sponsorships. He joined crypto to build and continues to recruit people to build experimental things. He’s now going to be “having to buy a crypto-FUNK” because he’s now been forced to accept restrictive licensing from the very start of the game. He also explains that digital collectibles are “super powerful” and is building a decentralized NFT exchange — where NFT creators can ask for ongoing royalty entries in a ledger.
A new era of emerging digital property rights
As everyone knows, 2021 is the year of the NFT. It’s the year of the NFT. Literally. The word of the year in Collins Dictionary. Everyone from Wayne Gretzky to Marvel comics are launching their own NFTs. What’s less clear is whether or not a clone of a popular NFT series will have a market. They have value and make money. They’re popular, so there is value. But maybe not at the same level as the original. This is an important concept in cryptocurrency. As cryptocurrencies increase in popularity, it is essential that everyone has a secure way to purchase them and that they can be traced back to their origin. Non-fungible tokens are a method to do this.
A NFT is basically a form of notary service. It helps artists, musicians and others prove that they created something. Michael Kong, CEO of Fantom Foundation, says NFTs show “the full audit trail, level of authenticity attached to each unique token that you can see previous ownership—people ascribe great value to that. NFTSs are an interesting concept. They can wrap any data securely, so that’s why true open source believers are keen to see progress in developing the space.
One theory about NFT knockoffs is that they are equivalent to forks of an OS or blockchain that, in fact, increases the value and credibility of the original collection. This view suggests clones are actually driving NFT prices higher. After all, as the “right-click save brigade” points out, copies abound with NFTs. For PooBah, the highest earning artist “Beeple is boring … in terms of technology use.” It’s tech progress that excites him. Imaginative code is the art. In the end, for time immorally, the ownership is strong. And, this is the key point. And that’s why ownership is done on a blockchain, it doesn’t matter if people copy any images anyway. For PooBah, the highest earning artist is boring…in terms of technology use. But, imagination in code is the art.
NFT series will have a market. They have value and make money.
One of the reasons for their success is their ability to take advantage of new trends. While they were not the first people to use blockchain technology to create collectibles, their NFT series was one of the first big names to actually use it to build value. Their ability to identify the emerging trends and then capitalize on them has helped them become a big player in the space.
In conclusion, an NFT asset is a blockchain token which represents ownership over a unique digital item or asset. For example, a digital painting, a digital comic book, a digital video game, a digital book, a digital song, a digital avatar or a virtual reality character. A new and exciting area of the blockchain industry is the development of non-fungible tokens, or NFTs. With these, it is possible to create unique and one-of-a-kind items which cannot be duplicated or reproduced. They are a digital representation of real world things that can be identified by their unique characteristics and features. This new technology is revolutionizing the world of blockchain and online gaming.
Featured photo source unsplash.com