Competency or investment? The impact of NFT design features on product performance

Abstract

This study investigates how NFT design features affect project performance. From the consumption perspective, NFT design features are divided into competency-related (image complexity, consistency) and investment-related (initial price, royalty). Using transaction data of 3297 NFT projects, we find that image complexity has an inverted U-shaped effect on long-term performance, while consistency boosts both short-term and long-term performance by formulating brand symbolism. Royalty as investment cost negatively affects short-term performance, while royalty and initial price exhibit inverted U-shaped impacts on long-term performance due to their mixed roles of costs and quality signals. Market uncertainty amplifies the impacts of complexity and royalties while diminishing the initial price impact in the long term. Findings support NFT project design, enhancing Web3 consumer behavior understandings.