China's NFT Survival Rules: Consumer Attributes and Community Culture
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China's NFT Survival Rules: Consumer Attributes and Community Culture
NFT: Consumption or Finance?
Navigating Web3 tides with focused insightsAuthor: Liu Honglin, ManQin Law Firm
Since the concept of NFT digital collectibles gained massive popularity in 2021, players and investors worldwide have flocked to this space, quickly making it the next hot trend after cryptocurrencies. However, as the initial hype fades—especially in China—the positioning of NFT digital collectibles has become increasingly nuanced.
As a legal professional with long-standing focus on blockchain, Attorney Honglin has been continuously exploring viable commercial pathways for NFT digital collectibles. Recently, after conversations with several NFT entrepreneurs, I’ve grown increasingly convinced: within China’s regulatory and cultural context, the relationship between the "consumption attributes" and "financial attributes" of NFTs will determine their long-term viability.
From a global perspective, NFT digital collectibles are no longer merely synonymous with digital art—they are advancing rapidly down the path of financialization. Many overseas platforms treat NFTs not just as unique digital assets, but also as instruments for financial investment: speculation, trading, and even financial derivatives based on NFTs are emerging one after another. But can such models be replicated in China?
Clearly, they cannot. China has always maintained strict regulation over virtual currencies, especially intensifying crackdowns on cryptocurrency-related activities in 2021. At the same time, the government continues strengthening oversight of financial risks associated with token-like assets. As a result, the “financialized” approaches popular in overseas NFT markets are inevitably curtailed in China. In my view, for NFT digital collectibles to survive sustainably here, they must follow a path where "consumption attributes outweigh financial attributes." One of the key appeals of NFTs lies in their ability to deeply integrate with various cultural industries. Digital art, sports and entertainment, celebrity merchandise—and more—can leverage NFTs to deliver deeper interactive experiences for fans and users. For example, NBA Top Shot attracted legions of basketball fans by selling digital collectible cards featuring iconic NBA moments. Similar models exist in China: artists releasing limited-edition digital artworks, virtual idols launching exclusive NFT merchandise, and so on.
China is a vast cultural consumption market. If NFT digital collectibles can integrate with local culture and ride the wave of cultural consumption, they could open up significant new markets. Examples include Peking Opera-themed NFTs, digital versions of traditional handicrafts, or digital props from domestic TV dramas and variety shows—all potential future hotspots for consumer-oriented NFTs. Such cultural integration not only satisfies emotional needs but also enhances the scarcity value of NFTs, thereby supporting their legal and sustainable existence.
Beyond cultural industries, NFT digital collectibles can also merge with education, public welfare, and social responsibility initiatives to create novel use cases. An increasing number of nonprofit organizations are experimenting with issuing NFTs to raise funds, leveraging their uniqueness and scarcity to attract donors. For instance, some environmental groups issue limited-edition digital artworks, directing proceeds toward conservation projects. For donors, this is not only a way to support good causes but also an opportunity to receive a unique NFT as a keepsake. The application of NFTs in education also holds great promise. Online learning platforms, for example, might issue NFTs to grant users exclusive study materials, limited-edition course content, or verifiable certifications. This approach not only boosts learner engagement but also pioneers a new model of digital educational consumption.
What Defines Consumption Attributes?
When discussing consumption attributes, many people may first think of tangible goods—buying clothes, electronics, or limited-edition sneakers. Yet, in the NFT space, these consumption attributes are equally present. For example, limited-edition digital artworks or digital trading cards issued by platforms are fundamentally no different from buying a rare pair of sneakers.
Take a simple case: a brand launches a series of limited-edition NFT sneakers. Owners can not only showcase them in virtual worlds but also enjoy special discounts at the brand’s physical stores by presenting their NFT. For many users, this is purely a consumption act—they’re not buying the NFT to resell for profit, but to access these added benefits. This model is highly replicable in China because it aligns closely with the definition of consumer goods.
The uniqueness and singularity of NFT digital collectibles give them scarcity characteristics in the digital realm akin to physical collectibles. Just as limited-edition sneakers captivate young consumers, digital collectibles generate similar enthusiasm online. Particularly within China’s gaming industry and otaku culture, the consumptive nature of NFTs is especially evident.
Financial Attributes Are Not Entirely Absent
Of course, emphasizing consumption over finance doesn’t mean NFT digital collectibles lack investment value altogether. In fact, like limited-edition sneakers, while NFTs are primarily consumer items, their scarcity can lead to premium pricing among specific user groups.
Die-hard fans are willing to pay extra for products they love, while some traders may buy, hold, and later resell NFTs for profit. This phenomenon is common in global sneaker and art markets—and it naturally extends to the NFT space. Decades ago, stamp collectors passionately pursued rare stamps, some of which now command high prices due to scarcity. Today’s NFT enthusiasts aren’t fundamentally different. At that point, although NFTs appear to be consumer goods, their uniqueness and scarcity endow them with a certain level of "investment value."
However, financialization of NFTs in China must be carefully managed. Given the country's strict regulations on cryptocurrencies and related financial activities, NFTs cannot be widely speculated upon or traded as freely as in overseas markets. To mitigate risks, some platforms have begun limiting price volatility to ensure healthy market development. For example, setting caps on price increases helps prevent excessive speculation and wild price swings. This approach preserves the investment aspect of NFTs while containing financial risk accumulation.
NFTs and Community Culture
Despite tight regulation on financial aspects, the Chinese NFT market still holds enormous untapped potential. By integrating with consumer goods through limited releases and exclusive rights, NFT digital collectibles are creating sustainable market spaces for users. China’s massive base of young internet users and strong cultural consumption habits provide fertile ground for future NFT projects. As digital collectibles, NFTs often amplify their value through community-driven culture.
Fan communities represent a viable path for the legal survival of NFT digital collectibles—users in these circles share deep emotional connections rooted in common interests. For example, fans of art, music albums, or virtual idols may use NFTs to form closer bonds with what they love. This connection goes beyond financial returns; it’s about emotional and cultural resonance. These enthusiast communities function as niche markets where targeted audiences enable NFTs to achieve high recognition and acceptance. For instance, a limited-edition NFT music album might grant buyers opportunities to interact with the artist or receive exclusive concert tickets. Such projects align perfectly with the consumption attributes of NFTs while generating additional value and experience through community culture.
Moreover, this model adds legitimacy to NFT transactions. A collector wishing to sell an NFT can reasonably expect a premium based on scarcity and demand within the community. This establishes a foundation for the long-term development of NFTs in China. Prices thus fluctuate around genuine user demand and consumption utility—not runaway speculation.
Despite promising prospects, achieving sustainable growth requires greater user education and market maturity. Currently, many users still perceive NFT digital collectibles solely through the lens of "hype" and "speculation," overlooking their true consumption potential and practical applications. Platforms and the industry must conduct more educational efforts to help users understand that NFTs are not merely tools for profit—they can serve as bridges connecting creators and consumers in the digital world.
By enhancing public understanding and reducing speculative behavior, we can build a healthier NFT ecosystem. Users should be able to obtain unique digital collectibles, engage in reasonable trading and investment, rather than blindly follow trends or speculate recklessly.
Today, many platforms are already using technical measures to promote legalization and standardization of NFT digital collectibles. Leading platforms, in particular, are proactively aligning with national regulatory requirements to ensure compliance. The development of NFTs in China will inevitably differ from overseas markets—it won't be dominated by financialization and speculation. Instead, market conditions and policy frameworks dictate that the future of NFTs in China will lean toward consumption and collection. While scarcity confers some financial attributes, this remains an added benefit—not the core.
ManQin Law Firm Summary
Are NFT digital collectibles consumer goods or investment assets? In China’s context, prioritizing consumption over financial attributes will be key to their long-term survival. We cannot deny that NFTs possess some investment value, but in the Chinese market, this must be controlled and constrained. Like limited-edition sneakers or rare stamps, NFT digital collectibles can serve as collectibles within enthusiast communities and yield modest premiums under certain conditions.
The future of NFT digital collectibles lies in delivering richer consumer experiences within a compliant framework, while fostering a healthy, sustainable ecosystem. In this process, NFTs will become bridges linking digital assets with real-world consumption, opening new possibilities for the broader application of blockchain technology in China.
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