Are PFPs making a comeback?

Key Insights

• Over the past few weeks, there has been a notable rally in the floor prices of PFP NFTs, indicating a resurgence in market interest and potential growth.
• Transitioning towards brand-building and practical applications, the PFP NFT market is evolving, a trend clearly seen in Pudgy Penguins, Tensorians, and Mad Lads.
  

In the past year, the PFP NFT market on Ethereum and Solana experienced a notable shift. After a consistent decline in trading volume following the previous bull cycle, there was a significant rebound in floor prices over the past few weeks, potentially marking a renewed interest in the market.

This resurgence in the market is particularly evident in mid-tier collections, with floor prices ranging from 2-8 ETH, and with CryptoPunks. However, native Yuga projects haven't seen similar increases in floor price or interest, indicating a potential change in their market standing.

In the past, holders of PFP NFTs were incentivized to retain their assets due to the value derived from airdropped derivative projects, as seen with the Bored Ape Yacht Club. Yet, this trend has declined in popularity over the year, exemplified by the Azuki Elementals, where the introduction of derivatives diminished the value of the original NFTs. Now, the focus is shifting towards creators who are expanding into broader brand-building activities. Pudgy Penguins, diversifying into merchandise, IP rights, and toys, is a prime example of this shift and has notably led Ethereum's PFP rally with an over 100% increase since July.