To anyone not immersed in the NFT world, it might seem strange to hear of some NFTs being labelled blue chip. In traditional markets, blue chip refers to companies and stocks that are of the highest quality, widely recognized and with a strong track record. In other words, they are safe investments that have been around for a while.
NFTs, by contrast, simply have not existed long enough to have what would pass for blue chip status in more mainstream markets. Nonetheless, the blue-chip descriptor is widely used in the NFT space to denote that an item has a high status and is highly desirable.
And, provided that crypto as a whole is here to stay, then it follows that certain non-fungible tokens will retain value over time. This is particularly plausible when you take into account the crossover between NFTs and the art world. Given that traditional art markets contain blue chip items, why should the same not be true of digital art markets?
Even in the event that the focus of NFTs was to shift away from art and design, and they become valued instead for their utility (acting, for example, as membership passes, means of transporting personal data, or as digital deeds), it still seems likely that early, experimental items will be of historical interest to collectors.
Relatedly, an aspect of note about NFTs is that they can blur the boundaries between art and utility. An example of this would be Bored Ape Yacht Club (BAYC). Some people might argue against BAYC being good art, but that’s a subjective view, and the fact remains that BAYC’s visuals were created by an artist and that many buyers like the design work. Put simply, it may not appeal to everyone, but it’s art.
But, on top of that, BAYC NFTs act as keys to a network that has delivered airdrops of further NFTs and a related token (ApeCoin), and access to real-life events. Holders of BAYC NFTs will also find themselves with whitelisted places to buy from new, non-BAYC related NFT projects, and with access to otherwise closed Discord servers where they can rub shoulders with influential participants in the worlds of crypto, NFTs and art.
While this can all start to sound a little elitist and aloof, it serves as an illustration of the in-flux nature of the NFT space, in which no-one is entirely sure of the endgame, but where multiple purposes come to overlap and blur together.
Which Collections Are Considered Blue Chip?CryptoPunks and Bored Ape Yacht Club
Both CryptoPunks and Bored Ape Yacht Club are now owned by the same entity, Yuga Labs (the creator of BAYC), but CryptoPunks predates Yuga and was originally the property of Larva Labs.
Originally distributed for free in 2017 and traded among a small number of collectors, CryptoPunks set several standards that would come to be imitated by other collections in the years to come.
The main template CryptoPunks established was that of a matching character collection (containing assets known as PFPs, or profile pictures) in which there are generative variations on a base profile character, some of which have rare traits that are more highly valued.
Although numbers now vary, PFP-style NFT collections have tended to be made up of 10,000 items, and that standard also originated with CryptoPunks.
In 2021, Bored Ape Yacht Club followed these conventions, taking the ape character trait from CryptoPunks and extending it to an entire collection, while moving away visually from the pixelated retro aesthetic of CryptoPunks.
Thanks in large part to being picked up and run by influential figures in the NFT space (who of course profited enormously), BAYC became a cultural phenomenon, Yuga Labs went on to acquire CryptoPunks from Larva Labs, and Yuga is now in the process of creating a metaverse/gaming world called Otherside.
The upshot of all this is that CryptoPunks and Bored Ape Yacht Club are the two most widely recognized NFT collections and are likely now to always hold historical value among the crypto-rich, and perhaps even among more traditional art collectors.
When it comes to generative art (meaning art produced by an automated, algorithmic process), the NFT platform of note is Art Blocks, which was launched in 2020. Many artists have distributed work through Art Blocks, and not everything released is prohibitively expensive.
Of the many sets available, the Art Blocks collections that are the most prestigious, and likely to remain as collector’s items and long-term holders of value, must be Fidenza, by Tyler Hobbs, Ringers, by Dmitri Cherniak, and Chromie Squiggle, by the creator of the Art Blocks platform himself Erick Calderon.
On Bitcoin and Cardano
Away from punks, apes and abstract art, there are other comparatively obscure avenues of NFT history that are of interest to collectors and digital investors. NFTs are now primarily associated with the Ethereum blockchain, but pre-dating Ethereum NFTs, unique digital assets were being minted on top of the Bitcoin network through a platform called Counterparty, founded in 2014.
Of particular note when it comes to Bitcoin NFTs are Rare Pepes, a collection of assets which were created between 2016 and 2018, and revolve around the meme culture associated with Pepe the Frog, a character created by artist Matt Furie.
And in the Cardano ecosystem, you might come across mention of Berries, a set of 100 tokens that, in March 2021, were the first NFTs created on the Cardano network.
Berries were airdropped to wallets in the Berry staking pool, but it was reported that a small number were lost, with at least one being sent to an exchange. That has turned out to be an expensive error since the cheapest Berry available for sale now is priced at 115,000 ADA or around 60,000 USD.
It is through such stories that crypto history is written, while fragments of history, both physical and digital, can take on a character and value of their own.
This article was written by Sam White at www.financemagnates.com.