Young people who buy “digital collections”: some earn 100,000, others are stuck

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Hundreds of thousands of people bought a digital avatar, and the NFT boom set off by foreign boring apes was blowing to China. In the tuyere, in just one year, big factories have entered the game one after another, and small platforms have grown savagely. But recently, the “exit” of Tencent’s Magic Core seems to mean that the domestic digital Tibetan industry has entered a cooling-off period. For players, can the dream of getting rich overnight still come true?

Author | Zhao Ruoci Editor | Liu Yang

Source: Leopard Change

“Some platforms take off in less than ten days.” The clothing store owner Xiao Song is a post-90s generation. He started digital collections in June, invested 30,000 yuan, and made a net profit of 100,000 yuan.

But after the skyrocketing, it will inevitably face cooling, Xiao Song also told “Leopard Change” bluntly: “Now that platform has fallen, I ran early and made more money.”

With Zuckerberg officially changing Facebook’s name to Meta, the concept of the metaverse became popular around the world. As one of the extended concepts of the metaverse, NFT has emerged overseas with the help of blockchain technology. According to data from iiMedia Research Institute, the global NFT market will exceed US$40 billion in 2021.

This trend of “getting rich overnight” immediately blew into the country, and large and small factories entered the game one after another. In order to “prevent the risk of virtual currency hype”, the big manufacturers that carry out NFT business have renamed it as a digital collection. Tencent’s Magic Core, Ali’s Whale Scout, NetEase Planet, and Baidu Super Chain are all products of this trend.

A research report by the Caitong Securities Research Institute shows that in January this year, the total monthly issuance of the domestic digital Tibetan market exceeded 45 million yuan, and by April, the monthly total issuance had reached nearly 300 million yuan.

However, the boom has not lasted long, but it has recently ushered in “cooling down”, and many users who have started have been “stuck”. Among the big factories, the first to exit is Tencent’s “phantom core”. On August 16, Magic Core announced that it will stop the distribution of digital collections from now on, and users can choose to continue to hold digital collections that have been purchased, or they can initiate a refund application.

Why did digital collections skyrocket overnight, and why did they usher in a “big cooling”? In the future, where should players and platforms go?

Some people earn tens of thousands, and some people get cut leeks

Digital collections refer to the use of blockchain technology to generate unique digital certificates corresponding to specific works and artworks, and on the basis of protecting their digital copyrights, to achieve authentic and credible digital distribution, purchase, collection and use. To put it simply, it is to attach a unique “digital ID card” to the work.

Digital collections, first and foremost “collections”. For example, in September 2021, Tencent released a panoramic digital card with Cave 156 of the Mogao Grottoes. In October, AntChain launched a digital collection of cultural relics such as the Siyang bronze square statue of the National Museum of China. In May of this year, Whale Scout and 28 cultural and museum units issued digital cultural and creative products for the cultural relics in the collection.

However, in addition to “collection”, digital collections also attract such a group of players, who are not out of love for art, or really support emerging technologies, but see it as an “investment”, trying to use it in the transaction process. High returns are obtained through premiums, and the dream of becoming rich overnight is realized.

In a 500-person digital collection exchange group, some players asked, “Has anyone made money from digital collections?” More group friends were silent.

Someone did make a fortune when it skyrocketed. Xiao Song told “Leopard Change” that the digital collection of “Food Rat” once presented to users in the “Eighteen Shuzo” ​​app has risen to more than 8,000 yuan.

But more players, like Wang Tai, “earned money at the beginning, but now they’re trapped again.”

Wang Tai, a third-year student, started to buy digital collections in May this year, and invested a total of about 8,000 yuan. He told “Leopard Change”: “The stock market of iBox, a digital e-commerce platform in Tibet, was more than 10 billion yuan at its peak. Now it is only a few billion yuan. If you think about it, you can know how much it has fallen.” In Wang Tai’s consignment records, he was in On August 14, he bought a digital collection for 8,088 yuan. On August 25, he sold it on consignment at a price of 1,378 yuan, a loss of 6,710 yuan.

Wang Tai showed a screenshot, which showed that the market value of his iBox holdings was 3535 yuan, the profit and loss of the position was -3941 yuan, and the profit and loss ratio was -54%.

If you want to speculate to make money, you must accept its instability. Wang Tai observed that “Huanxi Luohan” was released on the “Eighteen Numbers” platform, and it was sold for more than 9,000 yuan half a month ago.

“High-risk and high-return, most people who play this want to quickly enter and exit quickly.” Wang Tai said, “When funds come in, they will rise, and then retail investors will chase after them. Once sideways, they will basically fall. Down, many people will panic, and then trample the goods.”

iiMedia Research Consulting survey data shows that digital collections are more attractive to young consumers. Among the consumers of digital collections in 2022, 53.3% are young people, and 35.8% of young consumers treat digital collections with a black technology attitude.

“Students play a lot of Shuzang, and some students even pay tuition fees to play, but they all lose money in the end.” Wang Tai said to “Leopard Change”.

Digital Tibetan platform, opportunity or risk?

Under the huge market demand, everything can be NFT, and domestic digital collection platforms have sprung up like mushrooms after a rain.

The “Research Report on the Development of the Global NFT Digital Collection Market in the First Half of 2022” shows that as of June 13, 2022, the number of companies entering the digital collection field has reached 589. Many companies are looking to take digital collections a step further from the metaverse.

Large factories enter the digital collection, and the possibility of long-term development is greater.

For users, the transaction security of the digital collection platform backed by the big factory can be more guaranteed, and the prospect seems to be brighter. The preferred platforms for Shuzang player Bingbing are Whale Scout and Magic Nucleus. Currently, he holds 51 digital collections on Whale Scout. “These two platforms should be regarded as the most trafficked and best endorsed Shucang platforms.”

According to the statistics of the industrial blockchain information platform “Lianxin”, the sales volume of Magic Core has grown rapidly since 2022, and the monthly sales in April were nearly 20 million yuan. Wang Tai told “Leopard Change”: “In the beginning, anything released by Magic Core will be sold out.” It was sold out; the digital collections related to “Under One Person”, which were limited to 6,000 pieces at 98 yuan per piece, were all sold out.

However, in just a few months, the popularity of Magic Core plummeted due to the failure to open the secondary market and the inability to transfer gifts. According to the Magic Core App, when the Shandong Ship digital collection was released in March this year, more than 150,000 people participated in the pre-purchase qualification lottery. By the time of the digital collection of Castiglione’s China Imprint series in July, the number of participants was only 28,000.

Multiple digital collections of Magic Core also experienced slow sales. For example, more than 20,000 pieces of “Master Hongyi’s Calligraphy Motto Screen Digital Masterpieces” were issued, and more than 8,000 copies of the “Ten Bamboo Studio Painting Manual” series, which issued 25,000 copies, were unsaleable.

From this point of view, “it can’t be sold” is the direct reason why Tencent gave up the magic core. According to the 2022 Q1 financial report, the net profit in this quarter was 25.55 billion yuan, down 23% year-on-year. In optimizing the cost structure and shrinking non-core businesses, it may be a wise choice to abandon the immature magic core.

For users, large platforms that do not open the secondary market have a relatively small chance of making money, and it is more difficult to drive consumption. Xiao Song said bluntly, “big platforms can’t make money at all, and they are true collectors.” However, even if the magic core exits, it is still decent, and users can apply for a refund.

Another platform, the one that opens up the secondary market, is popular among “investment” players, but it has hidden risks.

The secondary transaction of domestic digital collections is still in a gray area, so platforms endorsed by large companies, such as Whale Scout and Magic Core, generally do not open the secondary market. Such platforms earn issuance fees through issuance. Even so, there is still the possibility of a deal. Bingbing told “Leopard Change”: “There are also many people buying and selling on this platform through third parties, such as Xianyu, QQ groups and other private transactions.” In a whale exploration exchange group, some users took screenshots of their collections and marked the price.

iBox, which started to rise in April this year, is regarded as the leader by many Tibetan players and has millions of users.

Although iBox claims that it does not support speculation on NFT, users can freely buy and sell after registering an account and binding their mobile phone. The main process is that after the platform discloses the issue price and circulation quantity, users buy it and then re-price it according to the market to complete the change of hands. Among them, iBox charges a 4.5% handling fee to the participants in the secondary market. According to media reports, the price of the “Jade Emperor”, a digital collection of the “Havoc in Heaven Series”, which was issued on the platform at a price of 99 yuan, once rose to tens of thousands of yuan in the secondary market. That is to say, the platform can make a lot of money just relying on the fee platform.

The myth of making wealth by repurchasing and reselling in the secondary market has attracted countless players to enter the game. “When I bought it, it was already at a historically low price. I didn’t expect that it has been falling recently, and it is nowhere in sight to rise again.” Wang Tai told “Leopard Change”.

Due to unclear regulatory policies, small platforms that open up the secondary market have grown wildly, and the wind of speculation has intensified, and some platforms have even run away directly, resulting in increasing capital risks. For example, after the “Guangyi Digital” was launched in May this year, the increase was huge, but within a month, it was listed as a fraudulent platform for rebates by the public security organs, and a large number of user accounts were frozen.

In June of this year, the WeChat public platform “Code of Conduct” added provisions related to the transaction of digital collections, clearly stating that engaging in virtual currency or digital collections business is an illegal operation, and providing secondary transaction services for digital collections will be banned.

Before the addition of this rule, the WeChat client had banned more than ten public accounts related to digital collections, including ArtMeta Digital Collection, Yidianshu Collection, Guizang Metaverse, and Huasheng Meta. After reviewing, there are acts of publishing, disseminating or engaging in related business activities without obtaining statutory licenses or licenses, and the account has been suspended.”

After the industry cools down, where will the future go?

At present, the digital collection industry is a new thing in China, and there are many problems in financial risks and technological improvement.

“People’s Daily” commented that at present, the legal nature, transaction methods, supervision subjects, and supervision methods of NFTs in China have not yet been clarified. NFTs have risks such as speculation, money laundering, and financial productization. We should maintain a cautious attitude towards NFT investment and be vigilant ” Drumming and spreading the flower” financial scam.

Relevant departments have also begun to pay attention to the supervision of the digital Tibetan market, and have successively issued relevant regulations to regulate the development of the industry.

In April 2022, China Internet Finance Association, China Banking Association, and China Securities Association issued the “Proposal on Preventing NFT-related Financial Risks”, proposing 6 codes of conduct, such as not including securities, insurance, Financial assets such as credit and precious metals are issued and traded financial products in disguised form, and virtual currencies such as Bitcoin, Ethereum, and Tether are not used as pricing and settlement tools for NFT issuance and transactions.

On July 6, the “Digital Collection Application Reference” was released by the editor-in-chief of the Blockchain Copyright Application Center of the National Press and Publication Administration’s Comprehensive Key Laboratory of Science and Technology and Standards, and made professional discussions on the current situation, risks, specifications, and qualifications.

However, most of the relevant documents issued at this stage remain at the level of guidance and advocacy, lacking specific legal provisions and guidance at the operational level. The platform is also in the stage of self-discipline, and relatively large platforms are more cautious. For example, WhaleTrack’s digital collections must not be used in illegal ways such as resale, speculation, and over-the-counter transactions. Only free transfers are supported, and the first transfer must be purchased after 180 days.

And the platform for opening the secondary market seems to be quietly adjusting in the wind.

On August 25, the official website of iBox International Edition issued an announcement saying that based on the adjustment of the core business direction of iBox International Edition, the platform will make an orderly clearance in the near future. According to Jiemian News, on August 26, iBox Chain Box responded: “iBox International Edition is invested by Huobi, operated by the original overseas operation team and led to clear out. The specific situation of Hainan Chain Box is not clear. It is not the same as ours. The main body will not affect the normal operation of iBox Hainan Chain Box.”

Whether the withdrawal of the international version of iBox indicates that the domestic market will also usher in a major reshuffle is still unknown, but what is certain is that industry chaos prevails, the transaction of digital collections is in a gray area, and the platform is in the allowable transaction. In this case, it is easy to become a channel for speculation and speculation, which violates the current regulatory requirements, and the policy will definitely be tightened in the future.

The big platforms began to withdraw, the prices of the collections in the hands of players began to fall, and the first wave of bonus periods seemed to be fading. However, when the bubble begins to burst, it may be the moment when the market order is rebuilt.

Returning to the original concept of “digital collection”, it should first have a collection value, becoming a “speculation” should not be its destination, at least it should be “reliable on price”.

In short, domestic digital collections are still in their infancy, and there may be unlimited development possibilities in the future, but this time the cooling will undoubtedly make many people “calm down” first.

Bingbing told “Leopard Change”: “Maybe everyone joins in the fun, and now the platform is very sluggish, and many people are trapped.”

(At the request of the interviewee, Xiao Song, Bingbing, and Wang Tai are pseudonyms)

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