One of the last posts of 2021 urging everyone to participate in the profile picture and avatar NFT revolution that occurred this year. The avatar collections of 2021 have the possibility of becoming a distinct generation of NFTs unto their own with the metaverse, similar to how we refer to DeFi projects in 2020 participating in “DeFi Summer 2020”.

This generation of Avatar NFT collectors represents the first wave of innovators and early adopters of the Digital Age, taking their first steps into decentralised social media in the post-Facebook world. Investors in avatars in 2021 have an opportunity to purchase these Avatar collections at a potential discount to 2022–23 prices due to the current largely unknown utility and value of the collections.

If investors were to wait to invest in 2022 when more utility is built, the discounted price opportunity will most likely be gone. Additionally, do not invest in an avatar NFT solely for financial gain. Invest in one as a means of creating your decentralised digital identity and as a means of participating in a decentralised community of like-minded individuals.

In my opinion, everyone should buy an ‘.ETH’ domain name and avatar NFT. That way, individuals can own their name and face in the digital age.

Practice the ‘NFT Rule of 3’

Before we rank avatar collections, frame your potential investment around the NFT Rule of 3, which describes an investor purchasing a minimum of 3 NFTs of a collection if they are going to invest in a collection at all. This is particularly relevant to avatar NFTs as many owners grow emotional bonds to them given the avatar is their digital representation, making them less likely to sell no matter how high the NFT’s value goes.

  • The first NFT is used as your avatar, as entry into the decentralised community and as your participation NFT for the community. This NFT is held in perpetuity.
  • The second NFT is available to sell in the short term as a means of covering your initial investment costs and/or realising some short-term profit if the price increases dramatically. Something not often discussed is that short-term profit realised above the investment cost of an asset can then be re-invested into other projects thereby increasing your portfolio size, and ensuring your ability to consistently participate on-chain.
  • The third NFT is there to hold for the long-term and to sell as part of your broader investment portfolio strategy. This NFT is held multiple years in the hope of an exponential price increase as the avatar’s metaverse and utility grows.

NFT Rankings

Categorised table of NFT avatar projects

Analyst’s pick for each tier:

  • Whale Tier: 1) CyberKongz, 2) Nouns, 3) Bored Ape Yacht Club
  • Shark Tier: 1) Cool Cats, 2) CrypToadz, 3) Solana Monkey Business
  • Dolphin Tier: 1) Gutter Cat Gang, 2) Blitnauts, 3) World of Women
  • Top Tier: 1) Anonymice, 2) SupDucks, 3) Doodles
  • High Tier: 1) Forgotten Rune Wizard Cult, 2) Lazy Lions, 3) Ether Orcs
  • Good Tier: 1) dotdotdots, 2) The Vogu Collective, 3) Koala Intelligence Agency

Value Propositions for NFT Holders

Avatar collections planning for the long-term should have long-term and incorporate many of the valuation propositions listed below. The Roadmaps of blue-chip avatar collections continue to have a strong influence on the value propositions of smaller collections.

  • Access to a private community and private Discord channels
  • Access to private Web3 social media platforms through NFT-gating (, Metalink, etc.)
  • Launch of a fungible token (ERC-20)
  • Utility for the collection’s fungible token
  • Dynamic functions for the NFTs like combining, staking, burning, evolving, breed, mutating, etc.
  • Future 3D model generation of 2D NFTs
  • Airdrops of additional NFT assets within the collection’s metaverse
  • Revenue sharing from platform operations
  • Full commercial ownership of NFT
  • A DAO for the collection
  • Guilds or sub-communities
  • Snapshot voting
  • Future media production (video, animation, comic, music, written, etc.)
  • Incubator/Accelerator for projects building for the ERC-721 or ERC-20 tokens
  • Ownership of land in Decentraland, CryptoVoxels, The SandBox or Minecraft.
  • Metaverse meetups within Discord, Decentraland, CryptoVoxels or The SandBox.
  • Future plans for blockchain-based games
  • Twitter Spaces meetups
  • Vibrant Discord and Discord meetups
  • In real life (IRL) meetups
  • IRL headquarters
  • Annual fanfests
  • Charity contributions
  • Great artwork that inspires derivative collections
  • Fully on-chain NFTs
  • A strong team of both software developers, artists, designers, marketers and builders
  • The creation of lore, ecosystem and a metaverse around the NFT collection
  • Future unknown NFT primitives

NFT & Community Aesthetics

It’s important to enjoy the buying and ownership of an NFT. Your chosen NFT collection should connect with your design tastes and should take into account how you want to be represented in the digital age. It should be used as an avatar and holders should be open to connecting with other members who hold an NFT collection in the same collection. Lazy Lion NFT holders should expect to connect with other Lazy Lions.

NFTs (ERC-721) Releasing Fungible (ERC-20)  Tokens

At Collective Shift, it’s commonly assumed that all good avatar collections will eventually launch and operate their own fungible (ERC-20) tokens, with NFT holders being the primary beneficiary and users of those tokens.

Genesis CyberKongz and their $BANANA token were the first examples of a successful token launch for an NFT collection. It has been annonuced that Bored Ape Yacht Club (BAYC) is following this strategy and are doing so in a conscientious manner having retained the law firm Fenwick & West to help them compliantly execute roadmap plans including token design and launch. It’s clear the team at BAYC is dedicating significant time and resources to their token development and we believe their token will become the gold standard for ERC-20 tokens issued by NFT projects. Once the BAYC token launches in Q1 2022, we could see a new wave of tokens launched that take that tokenomics model and expand upon it.

The research team is tracking ERC-721 projects that are releasing ERC-20 tokens. Follow along here.

Solana NFTs

There are 5 Solana-based Avatar collections added to rankings; Solana Monkey Business, Degenerate Ape Academy, Aurory, Thug Birdz and Boryoku Dragons. As a general theme, Solana-based avatar collections are considered a riskier investment than Ethereum-based collections. This higher risk is largely a result of the nascent, unproven nature of Solana NFTs, combined with a prevalence for anonymous founders and limited public developers within the ecosystem. The number of anonymous NFT teams as a % of total teams is higher within Solana than Ethereum.

While there are many avatar collections on Solana, upon discussion with Solana focused investors, it was considered prudent to only select an initial list of 5 older projects that have higher floor prices. It was also noted that the Solana Monkey Business (SMB) NFT community holds a significant amount of influence with the Solana NFT ecosystem, and they often can determine the success or failure of a newer collection released on Solana based on their sentiment. For those interested in diving deeper into Solana NFTs, the SMB community on Discord could provide continued cutting-edge Solana NFT information.

NFT Collection Airdrops

If you are the holder of an Avatar NFT that has not released additional NFTs, there is a high probability all collection holders will receive an airdrop in the future. All good NFT collections will airdrop holders of the original collection with additional NFTs as a means of building out their collection’s metaverse. Apes get dogs, Heroes get Villains, Cats get Rats, Blitmaps get Blitnauts.

There are examples across all major NFT collections of NFT holders receiving monetary benefits in the form of additional NFTs, simply for holding the original collection. While airdrops are widely discussed in the DeFi industry, they are less widely discussed in the NFT industry, even with the propensity for airdrops being known and built into the roadmap. If NFT holders are not airdropped assets, they will often receive preferential treatment for the minting of new releases.


High Discount for Lack of Marketability (DLOM)

A larger risk for NFT investments is the high illiquidity at sales time. I’ve noted to friends that if NFT holders want instant liquidity for a given avatar collection, they can expect to sell at a discount of 0–20% of the floor price. If investors want to realise the floor price for an NFT sale, that may take some hours or days for a trade to complete.

And for those that seek to gain a profit above the floor price, or above their attribute floor price, a successful sale could take weeks or months to complete. Venture-backed startups at the Series Seed and Series A stage typically have DLOMs between 30% and 50% for their common stock due to the fact it is unable to be sold due to a lack of a market. If investors require that their investment be able to be liquidated quickly, NFTs are not a good investment. Time-pressed NFT sellers are at an increased disadvantage than sellers in more liquid markets.

Lack of utility for NFTs

The inability of a team to create sophisticated tokenomics and successfully execute a token with real utility is a large risk for all NFT collections. Building utility for the NFTs and a metaverse/ecosystem around the NFT collection is a long-term proposition held by all collections.

Anonymous founders

Within NFTs many of the founding teams are anonymous individuals. By doing this they are simultaneously increasing their personal safety, while also increasing our investment risk. The ability to remain anonymous directly increases the risk of a rug pull or a bad actor software developer. For this reason, NFT collections with public teams are seen as a safer investment and therefore oftentimes trade at a premium at and after minting due to the increased demand from safety-conscious JPEG buyers.

In addition to tracking “anonymous vs. public teams”, the composition and intention of the founding team are important. Great teams have talented team members that cover key industry sectors important to NFTs like software development, artwork, design, marketing, business development and community operations. Also, given how nascent the NFT market is, many teams are working on the project in a part-time capacity. Good teams are working full-time or are moving towards working full-time for the collection. 

A crypto bear market in 2022

An industry-wide bear market in 2022/2023 led by Bitcoin and major blockchain tokens could adversely impact the NFT market at a greater proportion than other crypto assets due to the inherent illiquid nature of the assets. Before utility is discovered and executed for each NFT collection, a large and prolonged decrease in liquidity and trading volume for the broader crypto industry could render NFTs as one of the riskiest asset classes within crypto ahead of DeFi and DAOs. 


The success or failure of BAYC in releasing a fungible token in Q1 2021 based on regulatory oversight could prove a prophetic indicator of the pace of avatar NFT growth in 2022. Success could trigger a new wave of “NFT 2.0” projects incorporating the new tokenomics design into new projects. Failure could result in a prolonged stagnant period for NFTs as blue-chip projects continue to lobby regulators and work with lawyers to bring about more-complex financial mechanics for NFT collections.

Two Asks of the Reader

  1. Do you agree with the avatar NFT rankings? What should be higher/lower? What collections should be added?
  2. If you have anecdotal evidence on any of the top NFT collections, please share your experiences in this Google Sheet. This is an experiment at aggregating and organising anecdotal evidence on the top avatar NFT collections within a trusted investor community.