The story behind Doodles: The "visual cotton candy" valued at $700 million

Original Title: 《Doodles Domination: How a 1-year-old NFT project turned into the next big thing》

Original Author: KC IFEANYI

Original Translation: Moni，星球日报

In June 2022, Reddit co-founder Alexis Ohanian unexpectedly appeared at the NFT NYC conference, announcing that his venture capital firm 776 Fund had invested in a new company, which he said would "set various standards" in the blockchain space and even had the potential to become a global entertainment brand—this company is Doodles.

Since its official launch in October 2021, Doodles has become one of the hottest blue-chip NFT projects, attracting purchases from Pranksy and DJ Steve Aoki, and Alexis Ohanian himself holds several, stating that these NFTs remind him of his 5-year-old daughter, Olympia.

A year later, on September 13, 2022, Doodles announced the completion of a $54 million equity financing round at a valuation of $704 million, led by Alexis Ohanian's 776 Fund, with participation from Acrew Capital, FTX Ventures, and 10T Holdings. This is clearly a significant financing deal for an NFT project in a bear market.

Katelin Holloway, founding partner of 776, believes that Doodles will become the most inclusive, creative, and joyful media brand in the Web3 space, with the ability to define the NFT industry. In fact, many NFT holders and creators are pondering a question: how can digital images be elevated to a form of social media? With this question in mind, let’s take a look at how Doodles has established itself in the shaky crypto market and evolved into the next generation of "entertainment empire."

At the Beginning, Finding the Right Path

The three co-founders of Doodles, Evan Keast, Jordan Castro, and Scott Martin, all came from Dapper Labs. Evan Keast and Jordan Castro were core developers of "CryptoKitties." With the immense success of this NFT digital pet game, the two began to explore building their own NFT project in early 2021, hoping to achieve a "community-centered" and "truly fair" approach. When discussing token distribution and ensuring fair allocation, Evan Keast admitted, "In early 2021, although many NFT projects emerged, transparency was not high."

After some contemplation, Evan Keast and Jordan Castro decided to start with PFP (Profile Picture) NFT projects. According to data from the NFT analysis platform NFTGo, the market capitalization of PFP NFTs was as high as $13.3 billion at that time, indicating a sufficiently large market depth. Therefore, their primary task was to select an NFT with a "iconic appearance."

In reality, the vertical market for PFP NFTs was highly competitive. Before the birth of the Doodles project, there were already distinctive projects like the "Bored Ape" BAYC and pixelated punks CryptoPunks, making it quite difficult to carve out a niche. This daunting task fell to the third co-founder, animator Scott Martin.

Scott Martin's work has appeared in products from major companies like Google, Dropbox, and Adobe. His cartoon characters feature bold outlines, vibrant colors, and eyes that are hard to relate to human faces, which attracted a lot of fan attention. After discussing ideas with Evan Keast and Jordan Castro, a whimsical world of humans, flames, pickles, and popsicles emerged. With the support of NFT technology infrastructure provider West Coast NFT, 10,000 generative Doodles NFTs were officially launched in October 2021.

Focusing on Community, Avoiding Hype

In fact, Doodles faced some controversies at its inception.

About a month before Doodles went live, the team temporarily shut down their Discord, which had already amassed over 1,000 members. This closure of the community communication platform caused an uproar, but Evan Keast remained unfazed and resolute:

"We were frustrated with the massive hype and noise in the NFT market at that time. Many speculative NFTs flooded in, with seemingly random artists or founders minting and distributing NFTs without considering project development or creating a roadmap, so we wanted to try a different approach."

After the initial minting, Doodles set its starting price at 0.123 ETH, which was relatively high at the time. After successfully raising 420 ETH in initial funding, Doodles reopened Discord and quickly generated a buzz, soon becoming a heavyweight blue-chip project in the NFT market.

With its playful design and soft colors, Doodles resembles "visual cotton candy." To a large extent, Doodles' success stems from the approachable and easily recognizable characters designed by Scott Martin. Scott Martin explained, "PFPs are essentially something everyone wants to identify with. If it's angry, negative, fierce, or overly complex, then the connection between the brand, the individual, and the image is unlikely to evoke a good feeling."—In this regard, Scott Martin emphasized that inclusivity was a primary consideration when creating Doodles characters to resonate with the community.

Demonstrating "Dominance"

Throughout Doodles' development, the community treasury "Doodlebank" has played a crucial role, allowing NFT holders to vote on certain aspects of the project, such as creating official derivative projects like Noodles and Pukenza, and determining the development roadmap for the expansion project Space Doodles.

However, to become a global entertainment brand, the Doodles team needed a CEO with expertise in IP building.

In early 2022, Billboard president Julian Holguin reached out to Doodles for some simple consulting work due to business needs and quickly became very interested in the project. In May, Julian Holguin decisively decided to join Doodles as CEO.

Julian Holguin's addition undoubtedly brought significant help to Doodles. He began to build a brand around Doodles while exploring large-scale commercialization. "Doodles has a lot of cash on its balance sheet, which can fully support a mature tech and media company. Creating new experiences for potential customers using blockchain technology or NFTs is not particularly special, but you need to have a brand, tell a story; making a T-shirt is not special, becoming Gucci is special, and that is the significance of Doodles' existence in the NFT ecosystem."

To ensure brand cohesion, Doodles chose to grant NFT holders limited IP rights, which seems somewhat at odds with the decentralized philosophy. However, if we look at Yuga Labs' strategy, we will find that Doodles' approach is actually very reasonable. Earlier this year, Yuga Labs acquired Larva Labs and subsequently granted full IP rights to Bored Ape Yacht Club holders as well as CryptoPunks and Meebits, setting a high standard for NFT projects. This move quickly yielded results, especially in a bear market, as these NFT projects under Yuga Labs maintained high value and did not "discount" due to poor market conditions.

Clearly, the Doodles team hopes to bet on the overall long-term value of the brand and holders, rather than directly granting IP rights to individuals. Some projects have already begun to reach out to Doodles seeking licensing permissions, such as comics, TV shows, and music videos, but for now, the Doodles team seems to have not openly expanded its IP. Reports indicate that Doodles is seeking to establish higher-level partnerships and may even be acquired in the future.

Emerging from the Bear Market

Doodles has a highly approachable "look" and a strong team capable of realizing their plan to create a global entertainment brand, but one thing is hard to ignore—the NFT market remains very sluggish. Against the backdrop of a crypto bear market, global NFT sales hit a historic low in 2022, decreasing by over $4 billion. Doodles was not spared, with transaction volume dropping by over $100 million in June.

However, the NFT market has not collapsed completely; innovative services like ENS continue to attract attention, and some PFP NFT projects are likely to successfully weather the market downturn. If you enter Doodles' Discord, you will see that the community is still interacting and growing, with various meetings and offline gatherings. 776 founding partner Katelin Holloway admitted that Doodles' strong community was one of the main reasons they decided to support the company, "Without a strong community, no Web3 company can survive. The Doodles team has been community-led from the start, and we know what a healthy, inclusive, and thriving community should look like."

Alexis Ohanian concluded, "Everyone can feel that the transition from bear to bull is about to come, whether in 6 months or 12 months, true builders will be ready for that moment, and we are not slowing down at all."