The Next $CARDS? A Deep Dive into Phygitals, the Pokémon Card RWA Trading Platform

Over the past two weeks, the Pokémon card RWA sector has seen a surge in popularity, driven primarily by the remarkable performance of CARDS, the token issued by Collector Crypto, a blockchain trading platform for Pokémon cards. The token has experienced nearly a tenfold increase in value during this period.

Initially launched at $0.04 in early September, CARDS has continued to climb, recently reaching new highs and approaching $0.40. Its fully diluted valuation now exceeds $668 million.

This rapid price increase has thrust the niche Pokémon card RWA sector into the spotlight. The combination of blind box mechanics and nostalgia for the Pokémon IP has triggered market-wide FOMO.

Data from Dune Analytics reveals that the top four platforms in the TCG (Trading Card Game) sector collectively generated $31 million in revenue from card pack sales over the past week.

Meanwhile, another platform in the Pokémon card RWA space, Phygitals, has caught the market’s attention and sparked widespread discussion. Recent moves by Phygitals suggest that the platform may be preparing to launch its own token. Many investors who missed out on CARDS are now pinning their hopes on Phygitals.

A Canadian Startup Rejecting Venture Capital

From its early prototype at a hackathon to gaining market validation and recognition, Phygitals has consistently stood out with its unique approach.

The origins of Phygitals date back to the Solana hackathon in January 2023, where its founder, "Mister Colada," introduced the concept of a "tokenized trading card marketplace."

After nearly two years of refinement, the public beta version was officially launched in February 2024, followed by the operational debut of the card trading marketplace in March of the same year.

Unlike most crypto projects that seek venture capital funding in their early stages, the Phygitals team has firmly adhered to a zero external funding policy. The team has repeatedly emphasized publicly that they neither need venture capital nor external financing.

This idealistic stance has shielded the project from liquidation pressures typically associated with VC involvement, allowing it to maintain its purity. However, it also means that its growth relies entirely on cash flow.

Fortunately, judging by the current buzz surrounding the platform, their approach seems to be paying off. Data from DeFiLlama shows that Phygitals generated over $2.4 million in fee revenue over the past two weeks alone.

A New Card Collecting Experience

Here is the link to Phygitals' official website.

The core of Phygitals’ product lies in fully digitizing the traditional card pack opening process, ensuring that each digital card corresponds one-to-one with a physical card while maintaining strong liquidity in the secondary market.

Pokémon NFTs obtained through opening card packs can either be redeemed for their corresponding physical cards or traded on the secondary market. This approach eliminates the challenges of low liquidity, high shipping costs, and difficulties in verifying authenticity that are common in traditional card trading.

Users can choose from card packs at different price points on the Phygitals platform, priced at $1, $25, $50, $80, and $250. The higher the price, the greater the chance of obtaining rare cards. Due to the platform’s recent popularity, the $80 card packs are currently marked as “sold out.”

Phygitals’ most notable innovation is its mechanism allowing users to sell cards obtained from opening packs back to the platform at 85% to 90% of the current fair market value. This liquidity mechanism, similar to that of market makers, addresses the long-standing liquidity issues in the NFT market.

Currently, users can sell their cards back to the platform within 30 minutes of opening a pack at 85% to 90% of the fair market value. In the future, Phygitals plans to extend this buyback window to seven days. This design gives digital cards liquidity levels that are almost comparable to fungible tokens.

In addition, Phygitals has recently hinted at entering its “second phase.” Based on content shared on its website and X, the platform appears to be preparing to focus on social features. These updates may include live-streaming functionalities, allowing users to watch streamers open card packs while also encouraging them to purchase packs and experience the thrill of opening them firsthand.

It is clear from these mechanisms that Phygitals has placed significant emphasis on liquidity.

By providing a reliable buyback system and liquidity for all users, the platform removes potential concerns for card collectors, encouraging more people to purchase card packs. The blind box nature of the packs, combined with the nostalgic value of the Pokémon IP for an entire generation, has created a FOMO effect. This has led countless users to enthusiastically open packs and share their experiences on social media, fueling viral marketing.

Token Launch Imminent, How to Anticipate Airdrop Opportunities

Although Phygitals has not yet released any detailed tokenomics information, on September 15, the team officially announced that it has secured the ticker symbol "$PKMN" on Hyperliquid.

This aligns with the teaser shared on September 12, where the team hinted that something big is coming.

This aligns with the previously introduced mechanism where users earn points by opening card packs. The team has also hinted that accumulated points and holding NFTs issued by Phygitals may lead to future rewards.

These hints have sparked widespread speculation that Phygitals is on the verge of launching its token. This anticipation has drawn in users who missed the tenfold rally of CARDS, as they now rush to join Phygitals’ card-opening frenzy, hoping to secure a leading position in this emerging sector.

At the current stage, users can earn points by purchasing card packs from the "Packs" section on Phygitals’ official website. The points awarded are equivalent to 100 times the price of the purchased pack.

Given the varying probabilities of obtaining high-tier cards from different card packs and Phygitals’ buyback mechanism, the $50 and $80 packs currently offer a better balance of cost-effectiveness for those aiming to accumulate points for potential future airdrops. However, opening card packs is inherently a blind box experience. While there is a small chance of pulling rare, high-value cards, most users are more likely to receive common cards, which can be sold back to the platform.

Based on user feedback, the buyback price for common cards obtained from a $25 pack typically ranges from $13 to $25. Lower-tier cards can be automatically sold back to the platform at 85% of their fair market value, while slightly higher-tier cards require manual confirmation of the buyback price.

However, since the card quality is determined randomly, these figures should only serve as a reference.

While all signs seem to point toward a likely token launch by Phygitals, this remains speculative at present. Investors should be cautious, as opening card packs carries significant uncertainty.

Mixed Market Reactions to Phygitals

The market's response to Phygitals has been sharply divided, with some celebrating the thrill of pulling high-value cards, while others raise concerns about the transparency of card pack probabilities.

Positive feedback has largely focused on the platform’s liquidity and its seamless process for redeeming digital cards for physical ones. A devoted Phygitals supporter, @Legendarygainz, shared on Twitter that he pulled a misprint card worth $3,000, confirming the presence of high-value cards in Phygitals’ inventory.

Another Pokémon card collector, @pominik, showcased his smooth experience of redeeming a digital card for a physical one, further affirming the platform’s credibility in this aspect.

On the other hand, criticism has mainly targeted the transparency of Phygitals’ probability mechanisms. Some users reported repeatedly pulling low-value cards from premium packs, hinting at potential algorithmic biases. Adding fuel to the skepticism, numerous Twitter posts showed users pulling identical cards at the same time, leading to accusations that the platform might be engaging in coordinated marketing using duplicate content.

Overall, the market sentiment toward Phygitals remains more optimistic than negative. A majority of users and KOLs believe Phygitals has the potential to succeed CARDS as the next big thing, further amplifying the market’s FOMO momentum.

Phygitals currently stands at the intersection of a trillion-dollar collectibles market and the emerging RWA sector. Despite facing criticism, it is undeniable that the excitement around opening card packs has already taken hold. Many of my friends have willingly spent tens of dollars simply to enjoy the thrill of the blind box experience.

Whether it’s Collector Crypto or Phygitals, both platforms have successfully integrated Pokémon cards with blockchain technology. Following the success of CARDS, users both inside and outside the RWA trading sector are eagerly awaiting the next big opportunity. Let’s see if Phygitals can bring the Pokémon card craze into the crypto world.

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