Pixelmon’s CEO’s strategy: UsesFractionalized NFTs to rejuvenate the digital collectibles market
The Pixelmon crypto project, previously infamous as the “worst NFT project ever,” is transforming by venturing into fractionalized nonfungible tokens (NFTs) to stage a comeback. Initially introduced in February 2021, Pixelmon gained notoriety for all the wrong reasons, as shared by the current CEO, Giulio Xiloyannis, in an interview with Cointelegraph.
Originally initiated by a 19-year-old developer on Feb. 25, Pixelmon aimed to create a Pokemon-inspired game enabling users to collect, trade, train, and battle Pixelmon monsters. However, the project faced widespread ridicule within the crypto community after raising US$70 million in Ether but unveiling 68 NFT characters of questionable quality at launch, notably featuring “Kevin,” an awkward character that symbolized the project’s downfall.
Upon acquiring Pixelmon in May 2022, Xiloyannis recognized the necessity of completely overhauling the artwork to revive the project and cater to its community effectively. Despite the revamp, Kevin, the infamous character, will remain untouched, serving as a symbol of crypto’s resilience and a testament to the project’s history.
Xiloyannis clarifies the concept of “fractionalized NFT IP,” acknowledging its potential complexity for many individuals but emphasizing its straightforward nature upon closer examination. Drawing parallels to the world of Pokemon, he illustrates how Pixelmon intersects with blockchain gaming, NFTs, and intellectual property rights.
To simplify, he presents a scenario where Nintendo had created 100 NFTs of Pikachu in the 1990s, granting owners a 1% share in royalties from Pikachu’s usage. This means that whenever Pikachu is utilized on merchandise, in-game skins, or other applications, owners receive on-chain royalties equivalent to 1% of Pikachu’s total royalties.
In contrast to traditional NFT-based blockchain games that use NFTs for restricted game access, Pixelmon, set for imminent release, will offer free gameplay. Xiloyannis believes this approach is pivotal for fostering genuine adoption within blockchain gaming.
Owning a Pixelmon NFT entitles holders to royalties whenever the monster’s image is utilized beyond the game, mirroring the concept of royalties for a hypothetical Pikachu NFT owner each time Pikachu’s likeness is featured in merchandise or other media.
Pixelmon NFT holders receive payouts in MON Protocols’ native MON token. Recently, a token pre-sale was conducted, distributing MON tokens to holders based on the rarity of their respective NFTs.
Xiloyannis, while expressing his strong belief in the fractionalized IP model, also highlights potential risks associated with it for holders.
Beyond the worst-case scenario of the game failing to gain traction and NFT holders not receiving adequate returns on their initial investment, Xiloyannis points out a key concern related to attention distribution.
He explains that fractionalized IP ownership essentially involves a subjective gamble on which character will receive significant attention. It is possible to acquire an asset heavily used in-game but lacks external monetization potential.
Interestingly, Xiloyannis notes that this dynamic could elevate the value of the infamous “Kevin” NFTs, as holders speculate on the character likely to be most utilized. Recent sales of the “OG Kevin” NFTs, with some fetching over 4 ETH (approximately US$14,000), exemplify this trend.
However, Xiloyannis cautions that selecting the right monster is akin to investing in an unpopular Pokemon NFT before a game launch, only to realize later that it was not the optimal choice.
