Are CryptoKitties the one true NFT?

CryptoKitties Opened the NFT Game – and, According to One Analyst, They May Also Close It. First Generation CryptoKitties Could Indeed Be a Rewarding Investment for Collectors With Patience.

I don’t know who James Bachini is. He calls himself a crypto investor and blockchain analyst since 2017. But what he writes about CryptoKitties resonates with me, so I want to introduce it to you with my comments.

He writes that he has invested the money he set aside for his children’s college in cat pictures. CryptoKitties are “the bet in the NFT space I trust the most.”

CryptoKitties, it should be noted, are the OG of non-fungible tokens (NFTs), a kind of collectible game that launched at the end of 2017. One could create CryptoKitties and then breed them to generate more kittens. Depending on luck, the kittens would have more or fewer rare traits, making them more or less valuable. This was so much fun that CryptoKitties completely clogged the Ethereum blockchain at the time, presumably for the first time, and became a hit long before NFTs became mainstream.

“CryptoKitties occupy a unique place in the history of blockchain adoption and NFTs,” writes Bachini. While CryptoPunks, later one of the most valuable NFTs, existed during this time, it was CryptoKitties that made the breakthrough. “The first Web3 game that took off and made waves.”

Technically, CryptoKitties are interesting. They are based on the ERC721 standard for NFTs, which at the time wasn’t even a standard, and introduced numerous functions in the smart contract such as auctions, breeding, and so on. Unlike the NFT series of the boom years 2021/22, like CryptoPunks, Bored Apes, or Pudgy Penguins, CryptoKitties are not scarce, as new ones can always be created through combinations. This lack of scarcity, a characteristic so significant for later collections, reduced their value although the breeding was initially fun.

However, there are the “Gen Zero” or “Gen0” Kitties, as Bachini explains: The first batch that was minted, not bred. At that time, there was a hard limit of 50,000 for these Gen0 kittens, but only 38,015 of them were minted. Bachini assumes that these Kitties will become coveted items over time.

Currently, they cost between 0.019 and 0.03 Ether per NFT, which is around 50-65 Euros. On the CryptoKitties marketplace itself, they are available starting from 0.03 ETH, but prices quickly rise and can reach fantasy prices of thousands of Ether. On OpenSea, they start at 0.04 ETH.

As a well-known, visually appealing NFT BlueChip, Bachini trusts that demand will pick up in a later market cycle—2025 or 2029 but possibly even outside the usual 4-year Bitcoin cycles. So far, however, there is little evidence of this. This is shown by the “Wrapped Virgin Gen-0 Cryptokitties”. These are fungible ERC20 tokens backed by Gen0 CryptoKitties. They have been on the market since early 2021, peaked in autumn 2021 at over $1,500, and have been steadily declining since. Currently, at $54, they are only marginally above their low of $46, with no upswing in sight.

Nevertheless, Bachini’s thesis has its charm. CryptoKitties are not only nice to look at and hold a eternal spot in the NFT history—they also have functionality. And in the Gen 0 series, at least, they are scarce. Therefore, it could be an option for NFT collectors to hold at least a few of them in their wallet.