Doodles Entertainment Empire’s Bold Bet: From NFT Blue Chips to Tokenization Experiments

Confronted with a stagnant NFT market, Doodles opted to launch the DOOD token to invigorate the ecosystem and address liquidity challenges, which also sparked controversy and posed market risks.

Author: Lawrence, Mars Finance

1. A Brief History of Doodles: From “Cartoon Avatars” to the Ambition of “Web3 Disney”

As one of the most recognized blue-chip NFT projects within the Ethereum ecosystem, the evolution of Doodles exemplifies a successful case of IP incubation in the Web3 era.

1. The Genesis of Co-Creation Between Artistic Vision and Community (2021-2022)

In October 2021, 10,000 vibrant cartoon avatars designed by Canadian illustrator Scott Martin (Burnt Toast) debuted on Ethereum. These NFTs, dubbed Doodles, rapidly gained traction due to their distinctive “children’s stick figure” aesthetic, and the floor price surged past 5 ETH, earning a spot in the “blue chip club.”

The core team of three founders — Scott Martin, Evan Keast, and Jordan Castro — each bring vital expertise:

• Scott Martin: Visual architect, responsible for character design and world-building.
• Evan & Jordan: Former core members of CryptoKitties, experienced in NFT community dynamics.

Unlike other PFP (Profile Picture) projects, Doodles emphasizes the “holders are shareholders” concept from the outset:

• Establishment of a Doodlebank community treasury, where holders vote on fund allocation.
• Distribution of wearables via mechanisms like the Genesis Box to enable dynamic NFT upgrades.

2. Cross-Border Expansion and Capital Support (2022-2024)

2022 marked a pivotal strategic shift for Doodles:

• Leadership changes: Former Billboard president Julian Holguin stepped in as CEO, while music icon Pharrell Williams assumed the role of chief brand officer.
• Capital advancements: Successfully raised $54 million in funding with a valuation of $704 million, spearheaded by 776 Fund (owned by Reddit co-founder Alexis Ohanian).
• Ecological initiatives: Acquired Emmy-nominated animation studio Golden Wolf, launched collaborations with Adidas and McDonald’s, and developed the Doodles 2 dynamic NFT system for cross-platform character customization.

Doodles transitioned from a straightforward NFT project to a “Web3 Entertainment Group,” expanding its business horizons to encompass animation, music, gaming, and offline events.

3. Navigating Transformation Amid Crisis (2025)

In January 2025, founder Scott Martin reclaimed the CEO role and announced a renewed focus on “radical innovation”:

• Ceasing overly commercial collaborations (like McDonald’s coffee partnerships).
• Unveiling the DreamNet ecosystem, aimed at constructing an AI-driven decentralized content platform.

This strategic pivot is a response to the ongoing decline in the NFT market, which saw Doodles’ transaction volume plummet by 67% year-on-year, with floor prices stagnating around 3 ETH.

2. Tokenization Breakthrough: The Economic Model and Strategic Logic of DOOD

Amid a generally tepid response to the NFT landscape, Doodles opted for a breakthrough through tokenization. On May 9, 2025, the native token DOOD will be launched on Solana, with plans for cross-chain integration to Base L2.

1. Token Economics: Realigning Interests within Community Narratives

According to the white paper, the total supply of DOOD is set at 10 billion, with the following distribution framework:

Design highlights include:

• Community Focus: 68% of the tokens are allocated to the community, surpassing similar projects (like Azuki’s 37.5%).
• Multi-Chain Integration: The initial launch on Solana capitalizes on high TPS (65,000+/second) and meme culture, with subsequent cross-chain support via Base connecting to the Ethereum ecosystem.

Potential Issues:

• Ambiguity of “New Blood”: The allocation of 13% to New Blood lacks transparent criteria, raising concerns about internal manipulation.
• Institutional Pressure to Exit: Early investors like 776 Fund have not outlined exit plans, potentially capitalizing through ecological funds.

2. Value Capture: Evolving from JPG to “Digital Skin”

DOOD is envisioned as the “economic blood” of the Doodles ecosystem, with its value capture mechanism structured around three layers:

• Governance
• Proposal Voting: Holders can influence the creative direction for DreamNet.
• Staking Rewards: Locking tokens will yield animation IP dividends, discounts on co-branded products, and other benefits.
• Consumption Scenarios
• DoodlesTV: Users can pay with DOOD to access exclusive animated shorts.
• Virtual Fashion: Purchasing wearables on the Stoodio platform.
• In-Game Transactions: Prop trading in future metaverse games.
• Speculative Aspects
• Solana’s MEME culture boosts trading attractiveness.
• Cross-chain bridging with Base may create arbitrage opportunities.

Nevertheless, DOOD’s practical application remains inferior when compared to its competitors:

• Comparison with PENGU: Pudgy Penguins has maintained a steady cash flow through physical merchandise.
• Comparison with ANIME: Azuki is aligned with an anime crowdfunding platform, providing clear consumption scenarios.

3. Analyzing the Motivation Behind Currency Issuance: A Lifeline or a Harvesting Tool?

As NFT transaction volumes have halved, and blue-chip projects are floundering, Doodles’ decision to issue tokens has sparked diverse reactions.

Strategic Rationality

1. Addressing Liquidity Issues

The non-standard nature of NFTs creates illiquidity concerns. Tying tokens to these assets allows holders to acquire liquid assets through staking and airdrops, thus alleviating pressure to sell NFTs at diminished prices.

2. Community Engagement Experiment

The success of the DreamNet system hinges on token incentives:

• Content creators can earn DOOD rewards for uploaded content.
• Users gain points through interaction (likes, shares).

This “creation is mining” model seeks to replicate the success of StepN.

3. Investor Exit Strategies

Investors need to secure exits through token listings. Assuming $54 million in financing, DOOD’s fully diluted valuation (FDV) must reach $700 million to prevent losses for VCs, while Doodles’ current NFT market value stands at only $64.8 million.

Concerns of Exploitation

1. Risks in Token Distribution

Although 68% of tokens are earmarked for the community, allocation guidelines are unclear:

• 30% of community airdrops lack specified snapshot times, posing a risk of “rat trading.”
• The ecological fund, controlled by the team, raises concerns about potential market manipulation.

2. The MEME Trap

Choosing to launch on Solana serves to align with the MEME hype culture. Notably, 80% of projects on this chain lose 90% of their market value within a month of listing, with most trading occurring on centralized exchanges and limited on-chain liquidity.

3. Risks of NFT Reflexivity

Falling token prices may instigate a wave of NFT selling, creating a “death spiral.” Following the token issuance by Azuki in 2024, its NFT floor price experienced a 58% decline.

IV. IPO Outlook: Short-Selling Signals and Risk Alerts

According to Marsbit Research Institute’s model, DOOD may exhibit the following trends:

Short-term speculative outlook

• Day one listing: Driven by MEME sentiment, FDV could escalate to $1.5-2 billion.
• Airdrop selling pressure: With a 30% community allocation, potential selling could reach the equivalent of 3 billion (around 450 million USD) in the first week.

Long-term risks

• Pressure for ecosystem cashing: If the DreamNet MVP product isn’t launched within 6 months, the token may lose its narrative support.
• Multi-chain operating costs: The cross-chain bridge between Solana and Base might be susceptible to hacker breaches.

Short-selling strategy recommendations

Optimal signals for short selling include:

• FDV surpassing $2.5 billion (coinciding with a DOOD price of $0.25).
• Significant transfers to team wallets.
• Delays in the DreamNet launch.

Risk Warnings:

Solana’s significant market control entails risks of short squeezes and exchanges like Binance may implement restrictions on short selling.

5. Conclusion: Paradigm Shift and Speculative Bubble in Web3IP

The tokenization venture by Doodles represents a quest for “digital asset securitization.” Its idealistic aspirations manifest in:

• Aiming for value sharing between creators and consumers via a token economy.
• Exploring the transformation of NFTs from mere collectibles to “digital identity passports.”

Nevertheless, the harsh realities are unmistakable:

• In the nexus of interests involving VCs, exchanges, and market makers, the community remains at a disadvantage.
• The maturation of the Web3 entertainment ecosystem is far from sufficient to justify a valuation in the tens of billions.

For average investors, the guidance is:

• Short-term involvement: Take advantage of liquidity premiums upon initial exchange listings, with a stop-loss set at -20%.
• Long-term avoidance: Unless the user retention rate for DreamNet surpasses 50% post-launch, do not maintain positions beyond 3 months.
• Ecological monitoring: Pay attention to the musical collaboration with Pharrell Williams and Golden Wolf’s animation development.

In the cryptocurrency sphere, “innovation” and “harvest” are often two sides of the same coin. Whether Doodles can overcome the “coin issuance is the peak” fate remains to be tested during the autumn and winter of 2025.

Author: MarsBit

This article reflects the views of PANews’s columnist and does not represent the stance of PANews. PANews assumes no legal responsibility. The views articulated in this piece do not constitute investment advice.

Image Source: MarsBit
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