NFT Derivatives – Explanation and Details
Non-fungible tokens (NFTs) are quite popular around the world. Apart from NFTs, there are NFT derivatives.
What you need to know about NFT derivatives is that they are NFT projects created using intellectual property as well as creative assets from already existing projects.
To make a long story short, NFT derivatives usually contain attributes of existing projects without introducing many new elements.
Let’s first take a closer look at NFTs.
Non-fungible tokens (NFTs) are cryptographic tokens representing unique digital assets hosted on a blockchain.
Each NFT is unique. Interestingly, each NFT is either entirely digital or represents a tokenized version of a real-world item.
Furthermore, each NFT contains unique metadata and identifiers. As a result, it is all but impossible to alter an NFT. At the moment, the most popular use cases for NFTs are collectibles.
Users and technical aspects
Now, we can switch to NFT derivatives.
As stated above, they usually contain attributes of existing projects without introducing many new elements. Furthermore, an NFT derivative will also have a similar name.
Most NFT derivatives are based on popular NFT collections. For example, many such projects draw elements from Bored Ape Yacht Club and CryptoPunks. What’s interesting, some projects even draw elements from more than one original project.
One such example is the Society of Derivative Apes (SODA) is an NFT derivative project. The project mentioned above combines the features of Bored Ape Yacht Club and Doodles.
The vast majority of derivative projects borrow elements from versions of existing NFT projects without getting authorization from the NFT project, after which they are modeled.
There are NFT derivatives that are related to the original projects. However, collaborations aren’t common. So, the vast majority of projects lack approval.
However, the situation is more complicated than it may appear at first glance.
For example, a popular NFT project’s founding team may release a subsequent drop as a spin-off of their project.
Importantly, these types of NFT collections are considered official derivative projects. For instance, the founders of Bored Ape Yacht Club released Mutant Ape Yacht Club and Bored Ape Kennel Club. Both of them are official projects.
What makes NFT derivatives so interesting?
NFTs have become an inseparable part of the modern world. Unsurprisingly, NFT derivatives have also gained popularity.
However, not everyone likes them. According to some, they are unoriginal copycat versions of existing projects. Others have nothing against them.
Nonetheless, there is no lack of reason why a digital creator may decide to create a derivative project. We should differentiate between an unofficial derivative project and an affiliated derivative. Another option is a spin-off version by the original project’s founding team.
NFT derivatives have their advantages and disadvantages. There are creators who create derivative NFTs in order to profit from the likeliness of a popular NFT project.
The creators’ goal is to sell as many NFTs as possible. You should be careful when it comes to NFT derivatives.
The best way to avoid becoming a victim of a rug-pull scam is to do your own research. It is a good idea to check the information about the team behind a project and evaluate their long-term plans.
While there are numerous projects created without the intention of building long-term value, not all projects are cash grabs.
They are projects that are really interesting, to say the least. Such projects can be a fun way for community members to explore their creativity.
For example, both Jenkins the Valet and Noodles are derivative NFT projects. However, both projects have built long-lasting value. Moreover, they have received support from the founders of the original collection.
It is important to note that a derivative NFT project that has a solid roadmap, as well as a long-term plan, can potentially diversify the space. Moreover, it can even lower the barriers to entry for newer collectors.
