What are Blue-chip NFTs?

I. What is blue-chip NFT?

1. What is blue-chip?

To grasp the concept of Blue-chip NFTs, we first need to understand what "Blue-chip" means.

Blue-chip is a borrowed term from the stock market referring to assets that are valuable and highly sought after by many people.

In any industry, users can label anything as blue-chip, such as a painting by a famous artist or a high-value real estate property with strong potential for future growth...

*Blue-chip is a term borrowed from stocks*

The term "blue-chip stocks" has been used since the 1920s. Similar to a poker player wanting to collect as many valuable chips (blue chips being the most valuable), investors seeking long-term profits diversify their portfolios with blue-chip companies/projects.

Blue-chip companies are industry leaders recognized for strong growth, long-term profitability, and ability to withstand market downturns.

Examples of global Blue-chip companies include Apple Inc, Amazon, and Coca-Cola.
In Vietnam, examples of Blue-chip companies include Vinamilk, Vingroup, and Masan Group.

2. What is blue-chip NFT?

Similarly to the concept of Blue-chip in traditional assets, Blue-chip NFTs are NFT projects that are highly valuable, expected to maintain stable value, and have long-term profit potential.

Blue-chip NFTs are considered relatively safe investments with proven track records of success and stable growth.

3. The role of Blue-chip NFTs in the NFT market

Leading role: Blue-chip NFTs lead trends in the NFT market. The success of these projects often sets a standard for other NFT artworks, driving development and attention within the field.
Building trust and confidence: Blue-chip NFTs are recognized in the market, instilling trust and confidence in the NFT community due to their high asset value and perceived stability as a safe investment. This fosters trust and security for owners while attracting interest and investment from major investors.
Shaping digital art values: Blue-chip NFTs contribute to shaping the value of digital artworks. Establishing and acknowledging the value of these prominent and promising works can have a ripple effect throughout the entire NFT market.

II. What makes an NFT Blue-chip?

In general, Blue-chip NFTs have several common characteristics, including relatively high floor prices, strong brand power, endorsement by celebrities, commitment from the project team, and real-world utility. Specifically:

Statistical Metrics: Market Capitalization and Trading Volume

Statistical metrics are the most prominent factors in recognizing a project as a Blue-chip NFT. Specifically, for an NFT project to become a Blue-chip, it must demonstrate high market capitalization and trading volume through statistical figures.

Based on the insights from NFTGo, the top 10 NFT projects typically have a market capitalization starting from around $100 million and above. However, within the broader context of the crypto market, this figure may not appear exceptionally high.

When comparing these figures with Blue-chip DeFi projects like Aave or Compound, the stability of top Blue-chip NFT projects can be uncertain and subject to potential replacement by other emerging Bluechip projects in the future.

The credibility of the team behind the project (who are the team members, what is their reputation?)

Generally, the team's reputation and experience are significant factors when considering an investment in any coin or token, and this applies to Blue-chip NFT projects.

For instance, Azuki, founded by the Chiru Labs team, includes young entrepreneurs from Los Angeles with extensive experience in both traditional and Web3 markets. Such credentials can enhance the prospects of an NFT project becoming a Blue-chip.

Utility is another essential aspect of Blue-chip NFTs. They should offer clear applications and value, such as unlocking exclusive content, access to special events, or participation in exclusive communities. A strong use case and a clear path to success through specific plans are critical.

Pudgy Penguins serves as an example here. The project not only creates a collection but also provides substantial value and real-world experiences for users even within the Web2 market. Pudgy Penguins' NFTs can function as user avatars, connect individuals within a community, and serve as investment assets.

Overall, the combination of high market metrics, a reputable team, and practical utility are key factors in identifying and investing in Blue-chip NFT projects.

Pudgy Penguins also allows owners to license the project's trademark. This means owners can creatively engage with the commercial market by creating products and services related to Pudgy Penguins. This not only enhances the value and potential appreciation of the NFT but also opens up new business opportunities.

How strong is the community?

An NFT project cannot be considered Blue-chip without support from its community. Recognition and trust from the community help digital artworks become significant players in the market and contribute to shaping the value of the collection.

The strength of an NFT community can be measured through metrics and activity across social networks, for example, having over ~150K members on platforms like Discord, Instagram, and Twitter.

Visually, members commonly display the project's PFP as avatars, demonstrating pride and individuality.

Roadmap

Nearly all NFT projects develop and publish roadmaps to communicate milestones with their community. This allows followers to track the project's development progress. The team's ability to execute these roadmap milestones demonstrates their commitment to delivering as promised.

When a project successfully meets these milestones according to its roadmap, it can be considered to have met one of the criteria for recognition as a Blue-chip NFT.

III. Top 5 leading Blue-chip NFT projects

As of the current moment, we can highlight the top 5 leading Blue-chip NFT projects such as:

1. Bored Ape Yacht Club (BAYC)

Launched in 2021 during the peak of the bull market, this is a famous NFT collection on Ethereum featuring 10,000 unique cartoon apes. Upon release, one Bored Ape Yacht Club (BAYC) was priced at 0.08 Ether (ETH), approximately $220 at the time.

Subsequently, the entire collection sold out within 12 hours. By mid-October 2022, the floor price of BAYC surged significantly to 76 ETH per NFT, equivalent to approximately $100,418 at that time.

2. Mutant Ape Yacht Club (MAYC)

This is a branch collection of the famous Bored Ape Yacht Club, consisting of 20,000 unique Mutant Ape digital artworks. Half of the collection was sold in a public auction, generating $96 million within one hour of its launch.

The remaining 10,000 Mutant NFTs were created from the "Mutant Serum" distributed to holders of BAYC.

3. Azuki

Inspired by anime and launched on January 12, 2022, Azuki NFT is a collection of 10,000 PFP NFTs. It quickly became a Blue-chip NFT in the cryptocurrency community not only for its anime-themed aesthetics but also for outselling some of the biggest names in the NFT market in terms of volume immediately after its release.

Initially releasing 8,700 NFTs priced at $3,400 each, the collection sold out within minutes, generating approximately $30 million in revenue.

Following the public sale, the creators organized a private sale where they sold Azuki NFTs for $2 million. Since its reveal, the floor price of the collection skyrocketed to over 10 ETH within less than a month.

By the end of March 2022, Azuki's popularity exploded, pushing the floor price of the NFTs to around 40 ETH.

4. Degods

Launched in October 2021, this collection quickly became a sensation in the NFT community on the Solana blockchain. Later, DeGods migrated to Ethereum earlier this year.

DeGods consists of 10,000 PFP NFTs depicting a series of gods, each with unique traits generated using generative art algorithms.

One of the factors contributing to DeGods' popularity was the implementation of a 33.3% tax on any NFT sale transaction below the floor price at the time of the mechanism's introduction.

5. CryptoPunks

Launched in 2017, CryptoPunks is regarded as one of the first and most unique NFT projects on the Ethereum blockchain. It features 10,000 distinct pixel art images, with each image representing a unique pixel character.

IV. Conclusion

In summary, Blue-chip NFTs are a special type of NFT that are highly valuable and assessed through critical factors such as market capitalization, trading volume, project reputation and experience, attractive utility features, adherence to roadmaps, and strong community support.

Projects that meet these criteria become high-value digital assets that garner significant attention.

Beyond being valuable digital assets, Blue-chip NFTs play a crucial role in shaping trends and influencing the NFT market of the future. These projects lead in trends, creating new utilities and experiences for users.

The success and development of Blue-chip NFTs also impact the overall NFT market growth, fostering broader adoption and acceptance of digital assets across industries and user communities.

With this potential and significant role, Blue-chip NFTs have been and will continue to drive the development and transformation of the NFT industry, opening up new opportunities in the digital asset space.

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