Exploring the creation logic of popular NFT avatar projects from the perspectives of product and operations

Original Title: 【Comprehensive and Detailed】The Logic of Creating a Successful NFT Avatar Project

Author: zoroo.eth

1. Core Three Elements of NFT: Design, Rules, Rights

1.1 Design

As an image-based NFT, specifically a PFP avatar project, design is of utmost importance.

More important than the visual representation of the image is the core of the design, which is the soul of the NFT.

For example, the rebellion of CryptoPunks, the nihilism of BAYC, and the laziness of mfer. The entire NFT Collection must be a spiritual whole, fully aligned with its worldview, mission, Roadmap, etc.

The design of an NFT is not solely the responsibility of the designer; it involves all stakeholders, team members, product managers, and designers working together. Although the actual execution is primarily done by designers, successful design relies on the overall control of the team.

A typical avatar NFT is usually broken down into various attributes, which are designed and then combined to see the effects for adjustments.

The most needed designers here are artists and graphic designers.

Lazy mfer

1.2 Rules

Rules need to be carefully considered in advance, including but not limited to:

• Which chain to use?
• How many Collections to release?
• If releasing 1 Collection, how many NFTs will it contain?
• Will there be a Public Sale and Presale, what will the pricing be, and what selling methods will be used?
• Will there be auctions? What form of auction?
• How many whitelist spots will be prepared, how many mints per whitelist, and will there be single wallet mint restrictions in the Public Sale?
• How much time between PreSale and Public Sale?
• Will the minted NFTs be blind boxes, and when will they be revealed?

Many of these factors are also very critical. Note: Going on ETH is one logic, while going on Polygon, Solana, or other chains is a completely different logic; if purchasing with RMB, it follows the logic of domestic digital collectibles, usually requiring a consortium chain, which involves a completely different operational approach.

The number of NFTs in a Collection is also crucial. Currently, over 95% of people buying NFTs are motivated by investment, buying low and selling high. This means that people need to feel that your project has potential and can appreciate in value; otherwise, they won't mint. If the number of NFTs in the Collection is too high, people will perceive a significant risk of not minting out, and not minting out means that the secondary market price cannot significantly exceed the mint price, essentially leading to a loss, which in turn lowers people's willingness to mint. Therefore, the number of NFTs in the Collection will affect people's enthusiasm for minting and needs careful consideration.

• Pricing is crucial, no need to elaborate.
• The overall rules need to be carefully thought out and refined.

Currently, the typical configuration for avatar NFTs is as follows:

• Only on ETH, releasing 1 Collection with a few thousand NFTs
• Divided into Public Sale and Presale, sold at a fixed price, generally below 0.1 ETH, with Presale being slightly cheaper
• Whitelist usually has thousands of spots, typically limiting minting to 2 per whitelist, with no restrictions in the Public Sale
• Generally, there is a 24-hour gap between Presale and Public Sale
• Minted NFTs are blind boxes, revealed a few days later

CryptoPunks has 10,000 NFTs, which is considered a large Collection

1.3 Rights

After observing around 40 leading NFT projects and some other NFT projects, the rights involved can be summarized into several types:

Virtual Community Rights

• Exclusive Discord communication channels
• Exclusive WeChat groups (for domestic projects)
• DAO governance rights
• Whitelist lottery for other projects
• Membership lottery for other projects
• Participation rights in exclusive events like The Sandbox, such as metaverse land, metaverse concerts, etc.
• ……

Physical Rights

• Participation rights in offline events, such as parties, concerts, art exhibitions, etc.
• Physical merchandise, such as clothing
• Other physical prizes or lotteries
• ……

Product Rights

• Holding this NFT unlocks paid membership features for this product (common in some tool products)
• Future chain games will offer certain privileges to NFT holders (many NFTs make such promises)
• Future social products will offer certain privileges to NFT holders (like Monaco)
• ……

Token Rights

• Future NFT projects will provide whitelist spots for giveaways or directly give NFTs
• Future token issuance will allow free airdrop of tokens
• ……

Rights are inseparable from the project's Roadmap. The better the project performs, the greater the benefits for holders, and everyone understands this.

BAYC's Roadmap

2. Product & Design

2.1 Website Product

Typically, avatar NFT projects need to create their own official website.

The official website serves two main purposes: Minting and showcasing. It should display the project's spirit, soul, and characteristics, clearly articulating what needs to be expressed.

A month or two ago, I reviewed the official websites of the top 40 NFT projects with a friend, organizing their website modules, which can be categorized into the following types of content:

• Project: Project introduction, vision, philosophy, values, worldview, story background, brand, rights, Roadmap, partners, media coverage, etc.
• Team
• Token: NFT Mint/Claim related, data situation, gallery/database/rareness, market (links to OpenSea or their own market), claim or related situation of their own token, etc.
• Users: Tutorials, FAQs, suggestion submissions, proposal links, user agreements, image editors, etc.
• Store
• Media links, contact information
• Account system and login

Of course, the vast majority of official websites will not have such detailed content; many are features gradually improved by mature leading projects, and each project can choose based on their situation.

AZUKI's Mindmap

2.2 Website Design

While website design may not be as important as NFT image design, it can still create a strong first impression and is also a key factor.

The special designs seen on the official websites of the top 40 NFT projects include:

• Full-screen homepage, non-scrollable
• Cool animations, or a combination of dynamic and static elements
• Music playback
• News/updates pop-ups
• Glossary
• Falling effects
• 3D space activities, etc.

These can be referenced appropriately.

In this project's official website, we believe the following projects' websites can be particularly referenced:

• Azuki: The most thoughtful, comprehensive, and reasonable product design
• CryptoPunks: Old, simple, and comprehensive
• Punks Comic: Comic style, comprehensive information
• BAYC: A club-style website, typical and relatively comprehensive
• World of Women: Large scale, heavy philosophy, detailed roadmap, comprehensive
• Art Blocks: Art collection, representative of a special type
• RTFKT: Relatively flashy, 3D
• Meebits: Pixel style, relatively comprehensive
• The Sandbox: Game land, representative of a special type
• Loot: NFT gameplay, representative of a special type
• Hape Prime: Extremely simple yet high-end
• Creature World NFT: 3D, ugly style?
• Adidas Originals Into the Metaverse: Simple dashboard format
• Hashmasks: Dynamic scarcity, Mayan civilization feel
• NFT Worlds: Land, technical
• PhantaBear: Standard, little information
• Vox Collectibles: Exploratory introduction to the project, strong interactivity
• Pudgy Penguins: Warmth and memory

AZUKI's homepage effect, while lacking flashy animations, the overall effect is definitely the best

3. Technology

Overall, the technical difficulty of avatar NFT projects is relatively low, and the technical workload is also quite small.

3.1 Frontend

Frontend work mainly focuses on the NFT official website. Generally, it is relatively simple.

However, if the modules are complete and the design is complex, it can also involve a significant workload.

Frontend also needs to consider whether to implement some anti-bot measures.

3.2 Contracts and Backend

This mainly involves the NFT contracts. It is advisable to refer to the open-source code of major NFT projects to avoid many pitfalls.

For example, it is necessary to restrict direct minting through the contract; minting must be done through the project's frontend.

Reducing gas fees is a relatively important point; for instance, AZUKI uses the ERC-721A protocol, allowing multiple NFTs to be minted simultaneously, which can significantly reduce gas fees and was a key point in the project's promotion at the time, achieving good results.

There may also be some backend work at times.

3.3 Testing and Auditing

Typically, self-testing is done by frontend, backend, and contract engineers, with product and design checks, and team members can conduct joint testing, generally without the need for dedicated testers.

For large projects, it may be worth considering hiring an auditing firm for security assurance. However, ordinary NFT projects may not be willing to incur this six-figure cost upfront, and to be honest, most users do not care whether the NFT project's code has been audited.

3.4 Operations and Maintenance

The so-called operations and maintenance work here mainly refers to renting and maintaining servers, which incurs certain costs. Consideration must be given to concurrency issues. The concurrency level may reach thousands, tens of thousands, or even hundreds of thousands.

In a bull market for NFTs, popular NFT projects may also reach larger scales. The key point is that popular projects will have a large number of bots making repeated requests, causing various issues.

Of course, for the vast majority of projects, it is likely unnecessary to consider concurrency issues; not minting out and then experiencing a drop in price is the norm.

4. Operations

4.1 Discord Operations

In addition to the core three elements of NFTs, the external core is the community, which is generally established on Discord. The powerful community support features and open spirit of Discord make it an indispensable part of NFTs. Discord operations often become a key factor in determining the success or failure of a project.

Discord operations are a heavy workload, but by learning from the communities of leading projects, one can quickly master it, including but not limited to channel setup, use of third-party tools, hosting various activities like AMAs, recruiting and managing Mods, and distributing a large number of whitelist spots, etc. If it is a global NFT project, English becomes a crucial matter; for example, conducting AMAs requires a very high level of English proficiency, otherwise, it is difficult to cope. Additionally, managing Mods from around the world, with Mods in different time zones, is necessary to achieve 24-hour coverage.

There are exceptions; a few NFT projects may set up a basic structure on Discord without much operation, or even have no Discord community at all, yet still manage to mint and achieve some development. However, this generally relies on their unique design concepts, and such examples are rare and not easy to sustain.

A typical NFT Discord iceberg, with a large number of channels

4.2 Twitter Operations

If you want to create a global NFT project, you need to interact with people worldwide on Twitter in more authentic English, leveraging the cultural elements of English to boost your project, which is not easy for most Chinese people. Thus, many teams for managing Discord and Twitter have emerged.

If you follow a structured approach to Twitter, you can generally consider posting three types of content: synchronizing information about your project, interacting with industry trends, and hosting activities (such as retweeting for whitelist spots). Synchronizing the content you want to express about your project and effectively utilizing whitelist spots for growth would be considered passing.

Additionally, you need to consider whether to publicly disclose the Twitter accounts of founding team members. If it's inconvenient to share their main accounts, should they register secondary accounts and engage in some deliberate operations?

BAYC's Twitter

4.3 Other Community/Media Operations

Projects may sometimes involve Instagram, YouTube, Medium, Facebook, LinkedIn, etc. Domestic projects generally involve WeChat group operations and may sometimes include WeChat official accounts and Weibo. However, generally speaking, Twitter and Discord are the main battlegrounds.

Clone X's Instagram

5. Market

5.1 Project Collaboration

Project collaboration is one of the main forms of distributing whitelist spots. Generally, it involves mutual promotion and sharing some whitelist spots. Alternatively, a project may provide its own whitelist to another project for them to conduct whitelist giveaways in their community.

Of course, there may be other forms of collaboration. However, the quality and uniqueness of the project itself are very important. If the project quality is solid, a small number of whitelist spots might enable collaboration with many quality projects; if the project is subpar, even offering money may not secure many collaborations.

Core team members can negotiate project collaborations, and some projects also allow recruited Mods to negotiate, which can help expand reach but may also introduce potential issues that need to be weighed and appropriately managed.

Click to participate in the whitelist lottery

5.2 Other Promotions

In addition to collaborating with other projects, there are many possible promotional and collaboration methods.

For example, negotiating with Magic Eden for LaunchPad, or discussing listing on Binance NFT market (centralized market); if successful, it can greatly assist with NFT minting and subsequent market performance, but the difficulty is also high.

Another example is collaborating with certain KOLs for promotion, essentially having them help promote the project. Sometimes, it may only require providing them with some whitelist spots, while other times it may require paying some cryptocurrency.

More specifically, if you are creating a toy NFT in the metaverse, collaborating with well-known toy manufacturers in reality would definitely yield better results.

Even advertising in various Web2 products, while not particularly common, is a channel that should not be completely disregarded. There are many promotional methods to consider, depending on how to weigh them.

Magic Eden's LaunchPad

5.3 Market Value Management

The vast majority of NFT projects do not need to consider market value management issues, as most projects primarily focus on how to first overcome the hurdle of "Minting out." Before minting out, discussing market value management is unnecessary.

Market value management here refers mainly to the project's buying and selling behavior regarding its NFTs. There are many situations and possibilities, such as putting transaction royalties into the project treasury and then choosing the right time to conduct floor sweeping; whether these NFTs will be sold at the right time; or if the project retains some NFTs for future sale; or large projects that hope to use significant funds to control the market to achieve price increases, decreases, or maintenance.

There are also specialized NFT market-making teams, but for most NFT projects, there is no need for dedicated efforts in this area.

How to Successfully Commercialize? How to Develop Long-term?

Typical sources of income include:

• Minting income: If minting is successful, it is generally considerable. Assuming a price of 0.05 ETH and issuing 6000 NFTs, the income would be 300 ETH, approximately 6.6 million RMB at current prices.
• Royalty income: Most projects do not earn much from royalties, but leading projects can earn significant amounts, even far exceeding minting income. Assuming a final trading volume of 100 ETH and a royalty rate of 10%, that would be approximately 10 ETH, or 220,000 RMB.
• NFT trading income: Income from the buying and selling of NFTs by the project team and members, which is difficult to estimate. Moreover, engaging in such trading requires consideration of industry norms and community reactions; it is not simply a matter of doing as one wishes.

Loot's trading volume on OpenSea is 74K ETH

Typical costs come from:

1. Team costs: Costs for designers, product managers, technical staff, operations, marketing, etc.; design, technology, operations, and marketing may face similar outsourcing situations. Consider whether auditing is needed; sometimes consulting or hiring advisors may be necessary.
2. Server costs
3. Collaboration/promotion costs: Possible IP licensing costs, potential project collaboration costs, possible paid promotions, etc.
4. Gas costs: Gas costs incurred during development, testing, and market-making processes.
5. Costs for fulfilling subsequent commitments.

• Community operations require at least hundreds of thousands of RMB annually; if done well, it may require millions.
• If commitments are made to develop chain games in the future, that would require at least millions in investment, and if done well, there is no upper limit.
• If future plans include tools, SocialFi, or token issuance, significant costs will also be involved.
• The benefit is that future developments in chain games, tools, SocialFi, or token issuance will generate new income, not just pure cost expenditure.

A small part of the roadmap for the blue-chip project CoolCats, all of which are costs

Long-term Value

1. Beyond just selling an image for users to use as avatars, avatar NFTs can have more long-term value.
2. The parent company of BAYC, as a pioneer, is raising the ceiling for all avatar NFT projects and setting industry benchmarks.
3. Learn from all leading, blue-chip, and quasi-blue-chip projects.
4. Build a strong community, maintain and develop the spiritual core, and expand the ecosystem.
5. CC0 protocol, user-generated content, a more prosperous IP ecosystem.
6. Release more related NFTs to form a system.

• A better, larger, and richer community, even SocialFi.
• Online and offline integration, offline events, physical merchandise, various rights.
• Expand into ACG and create games.
• Become a metaverse brand, targeting metaverse consumption.
• Acquire other NFT projects or non-NFT projects for more collaborations.