An Overview of the Korean NFT Scene

What’s the Utility?

It became apparent that NFTs were already a cultural phenomenon when Paris Hilton showed off her Bored Ape on the Jimmy Fallon show. Celebrities and NBA players began amassing high-profile projects and launching their own collections. Some for the hype, some for the "culture". Yet NFTs are still in question as to how they can be valuable, or have any value at all.

The main function of NFTs is to prove one’s digital ownership. For example, a jpeg of an ugly monkey. But the notion that images can still be "right-clicked and saved" by anyone attracts much criticism. To some, it makes no sense when it comes to proving one’s ownership of a digital file. Ownership implies a sense of control, which NFTs seem to fail at.

Not surprisingly, the NFT collector community has become more and more obsessed with the utility of NFTs. What does an NFT offer besides a picture? A thriving community? Alpha drops?

Incentives to attract investors soon turned into perks. BAYC holders were airdropped with ApeCoin and had privileged access during the Otherdeeds land sale, and with the upcoming ApeFest, BAYC holders will once again be compensated with exclusive perks. Therefore, we have a case for NFT ownership. The ugly monkey is just face; the benefits that come along are the real deal.

A Thriving Scene

Though NFTs are establishing their use case as a membership, they are largely perceived as speculative assets by the majority. Still, there is a grassroots movement in the Korean NFT scene growing in multiple directions, which includes 10k PFPs, investment DAOs, and digital art projects.

Meta Kongz is the most notable NFT project in Korea at the moment. The 10k PFP NFT project garnered a huge following in Korea as the creator’s celebrity status brought about media attention early on. The project entered partnerships with Korean brands like Shinsegae, GS Retail, and Hyundai Seoul, not to mention blockchain projects like Terra World and The Sandbox.

The project positions itself as the BAYC of Korea and has been wildly successful, attracting celebrities and influencers as holders, which added to its value as a social club pass. However, Meta Kongz recently decided to migrate to the Ethereum blockchain due to "scalability issues" relating to global partnerships.

Projects like Sunmiya Club and SuperNormal are also touting the PFP NFT collection cliche. Each gained significant followings in Korea and entered into partnerships with corporations. Partnerships included other PFP projects as well. Sunmiya collaborated with both Meta Kongz and SuperNormal, making the Korean PFP NFT community highly interconnected with each other.

Meanwhile, investment DAOs have also emerged in Korea. To name a couple, 1EG DAO and Gaia Protocol are well-known as investment DAOs, but take drastically different approaches to return profits.

1EG DAO hosts the 1 Ether Game, which allocates 1 ETH from the DAO treasury to game participants. Participants will trade NFTs to pay back the treasury. The winner of the game will be rewarded with 3 ETH or 30% of their profits. Rather than relying on the wisdom of the crowd, the DAO invests in individuals instead.

Gaia Protocol is made up of three NFT projects, each with its own investment thesis: Gaia Genesis, Gaia Supernova, and Gaia Stable DAO. The project aims to deploy investments in a variety of DeFi strategies.

Currently, the Gaia Protocol is building DeFi infrastructure on the Klaytn blockchain to create a robust DeFi ecosystem. Some projects under development include Gaia Bank and ZeroX, each responsible for DeFi services and bridging assets.

Gaia Protocol Value Boosting Strategy — Gaia Protocol is planning to develop DeFi protocols to create revenue and distribute dividends to its NFT holders. Source: @gaia_protocol

The Wrath of Do

The market is experiencing a 2018-style fall, combined with a multitude of bearish incidents like the recent Luna fallout. Gaia Protocol claimed that they "have been receiving many inquiries relating to our goals and sustainability," and "it will take a lot of time and effort to overcome." The project revealed that they also took "a lot of damage" after the Luna crash during a questionnaire with Xangle.

"We are seeing multi-chain strategies are in play leveraging L1s and L2s, because relying on a single chain creates a single point of failure. Gaia Protocol also plans to go multi-chain. We are willing to enter Polygon, Ethereum, Arbitrum, Optimism, etc. The Gaia Bridge and ZeroX are some relevant projects in this regard."

As Meta Kongz decided to migrate to the Ethereum blockchain, the project is following suit, claiming that they "will gain second-hand experience" from their predecessors when migrating to Ethereum, and will be able to further strategize their multi-chain efforts.

Korean authorities are eager to take action as tens of thousands lost their investments after the UST depeg, while some are voicing that NFTs should be treated as securities. Gaia Protocol responded that “some NFTs resemble securities,” but “NFTs can include utilities like memberships and adaptation rights,” adding that “investors must be disclosed with accurate information and potential risks on projects, while regulators should prevent and punish fraudulent rugpull projects.”

Furthermore, Gaia commented that regulators must “understand that DAOs have different organizational structures compared to corporations” because “misplaced regulations can hinder innovation in the industry.”

After the Winter

Despite all the controversy, NFTs are still making their way in Korea, especially in music and art. The Gangdong Arts Center hosted a month-long NFT exhibition, while major hip-hop artists are releasing their own PFP NFT collections. Just to name a few: Meta Bumz by Young & Rich Records, GMGN by Hwaji, and You by JUSTHIS are notable projects.

The Waterbomb Festival also released its NFT collection, Waterbomb League. The NFT collection will grant its holders benefits to one of the most anticipated music festivals in Korea. The collection’s 30 day trade volume is currently sitting at around 70 ETH.

Besides mainstream projects, there are also projects that focus on more niche markets. Vasari DAO aims to "create an ecosystem where artists can be properly compensated for the works they've contributed within the process" in the contemporary art scene.

We are seeing a decline in the overall market, but at the same time, NFTs are penetrating the mainstream more than ever. As one of the most crypto-savvy nations, Korea is fully embracing the technology, and we are only at the beginning of the saga. Let’s just hope NFT projects can stay resilient during this crypto winter and see them blossom after the cold.

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