NFT and Mystery Box Economy: From Pop Mart to Blockchain

Pop Mart was listed on the Hong Kong Stock Exchange, attracting widespread attention from the market. After delisting from the New Third Board, the company's valuation soared 21 times in just a year and a half, becoming the true "mystery box king".

According to public data, Pop Mart's revenue has grown rapidly over the past three years, increasing from 158 million yuan in 2017 to 1.683 billion yuan in 2019, with an annual growth rate exceeding 200%. Its net profit has surged 289 times in just three years, rising from 1.56 million yuan to 451 million yuan.

The success of Pop Mart stems from its unique "addictive" economic model. The sense of surprise when unboxing and the sense of achievement in collecting hidden versions are its core competitiveness. As a representative of new consumption, trendy toys are similar to the non-fungible tokens (NFT) in the crypto field, both belonging to niche subcultures. The success of Pop Mart has certain enlightening significance for the NFT industry.

From physical cards to digital collectibles to NFT

The mystery box model was not pioneered by Pop Mart. As early as 1996, Nintendo launched the Pokémon TCG cards. This collectible card game attracted many collectors. According to statistics, by 2019, global sales of Pokémon cards exceeded 27.2 billion.

In addition to physical cards, the opening boxes and card-drawing mechanics in video games are also very popular. From the treasure chests in DOTA2 to the card-drawing system in Onmyoji, these are effective means for game companies to attract players.

The emergence of Blockchain technology has opened up a new world for collectibles. In 2018, the Crypto Kitties application on Ethereum sparked a craze where users could collect and breed unique virtual cats. These digital collectibles, based on NFT technology, possess uniqueness and indivisibility, making them naturally suitable for scarce products.

A certain Blockchain card game raised over 9 million yuan in its presale period, demonstrating the immense potential of NFT cards.

Concerns Regarding the Mystery Box Model

Despite the huge success of Pop Mart, the physical mystery box model still has some problems. Too many "hidden styles" stimulate consumption, but also raise some doubts. Some users believe this is an "IQ tax," as the scarcity of hidden styles is completely controlled by the company, lacking transparency.

In contrast, NFT technology can address the issues of scarcity and permanence. The uniqueness and immutability of NFTs can enhance fairness while solving the drawbacks of physical collectibles being easily replicated and digital collectibles relying on game servers.

NFT Enhancing Liquidity and Financial Attributes

The liquidity of traditional mystery boxes and electronic collectibles is often limited. However, NFT technology can greatly enhance the liquidity of assets. After a certain Blockchain game launched its trading market, the number of card trades quickly surpassed that of USDT.

NFT not only increases liquidity but also enhances the financial attributes of products. For example, a certain DEFI platform issued an NFT "Hammer" that can be used for mining, governance, and dividends.

IP is key, mystery box gameplay is supplementary

The success of Pop Mart is largely attributed to its IP management. As of June 2020, the company owns 93 IPs, including proprietary IPs, exclusive IPs, and non-exclusive IPs. High-quality IPs can bring stable user traffic and purchasing power.

For the emerging NFT sector, high-quality IP is equally important. Some blockchain projects have begun to try collaborating with well-known IPs, such as the GoPepe series of cards released on the WAX chain based on EOSIO, which has achieved good results.

Challenges Facing the Development of NFT

Despite the promising outlook, the development of NFTs still faces some challenges:

1. The high Gas fees and low efficiency of Ethereum affect the user experience.
2. The user base of DApps on non-Ethereum public chains is relatively small.
3. The NFT infrastructure is not well-developed, as most wallets do not support the display of NFT assets.
4. The issue of copyright infringement on IP is serious.
5. The management of NFT exchanges is chaotic and lacks a unified standard.

To achieve large-scale applications of NFT, it is necessary to improve infrastructure such as wallets, exchanges, and public chains, establish a sound on-chain data system, and develop richer gameplay. With the resolution of these issues, NFT is expected to play a more important role in the digital economy.