January 12, 2022
BEIJING – Non-fungible tokens, or NFTs, which refer to ownership certificates of virtual assets based on blockchain technology, are gaining popularity, as more Chinese players are openly embracing the digital collectibles, industry experts said.
They said each NFT denotes ownership of a unique item and thus could not be duplicated. This uniqueness makes the items valuable, and could be regarded as a manifestation of digital asset credentials in the metaverse.
Mandarin pop star Jay Chou’s fashion brand Phantaci, and Ezeka decentralized entertainment platform－jointly released a digital avatar called “Phanta Bears” on New Year’s Day and sold 10,000 copies in less than 40 minutes, bringing in a total value of 62 million yuan ($9.7 million).
Each bear has been given a set of unique characteristics, with different colors, clothing and accessories, showcasing the technology that verifies the ownership of unique digital assets.
Chinese e-commerce giant JD launched an NFT platform called Lingxi in JD app last month. The first batch of the digital collections was represented by JD’s mascot Joy, a white cartoon dog.
Each edition is limited to 2,000 copies and costs 9.9 yuan. All these digital collections, which are based on JD’s Zhizhen chain, a licensed blockchain network, have been sold out.
In terms of purchase rules, real-name registration is required before purchase, and once purchased, it cannot be returned. The purchases will be recorded in JD blockchain and cannot be tampered with.
JD said it expects to further explore the application of NFTs in multiple areas including copyright protection, social responsibility, art, e-contracts and e-commerce in the future.
NFTs use the blockchain technology to authenticate digital objects such as drawings, animation, music, photos and videos. Experts said with more celebrities and industry giants getting into the field, the global NFT market will continue to boom this year and become a hot spot for investment in the future.
Li Ming, director of the Blockchain Research Department at the China Electronics Standardization Institute, said NFTs, which are unique, indivisible and traceable, could be used to mark the ownership of a particular digital asset.
Other Chinese tech heavyweights, including Alibaba and Tencent, have also jumped onto the NFT bandwagon.
For instance, AntChain, a blockchain subsidiary of Alibaba’s financial technology affiliate Ant Group, launched 8,000 limited-edition NFTs based on two pieces of digital artwork inspired by ancient murals in cooperation with Dunhuang Research Academy in June.
Buyers can set the artwork as a background for the payment interface in the Alipay app. Priced at 9.9 yuan, the digital collectibles were also quickly sold out.
“The certificate of digital assets is a key element in the metaverse underpinned by blockchain technology,” said Yu Jianing, executive director of the metaverse industry committee at China Mobile Communications Association, a Beijing-based industry association.
He said NFTs are currently applied to digital artworks, collectibles, music, game tools and other digital and virtual goods, and every digital asset in the metaverse could be represented as an NFT, which could act as a bridge between the physical and virtual worlds in the future.
Apart from NFTs, some cutting-edge technologies such as virtual reality, augmented reality, artificial intelligence and the internet of things will also play vital roles in building the metaverse, Yu said.
As one of the hottest tech buzzwords, metaverse promises a future where the virtual and physical worlds are inextricably interconnected. The metaverse is basically a shared virtual environment or digital space created by technologies including VR and AR.
Chinese stock photo provider Visual China Group recently announced the launch of its digital art collectibles platform named “meta-visual”, which will empower artists in the aspects of technology, distribution and operation, and provide artists and collectors of visual art digital collections with services such as creation, protection and transaction.
Meanwhile, experts said NFTs have certain financial attributes, warning some speculators might overhype the concept like cryptocurrencies, which could spawn equity bubbles.
Investors should make rational decisions and remain cautious about the risks of blind speculation, preventing NFTs from being new tools for hype, Yu said.