I always knew Galapagos syndrome was not a myth, but according to my past economics science classes, this modern business pattern couldn’t apply easily to a decentralized and intangible environment. Things are evolving. Over the last decades, Japanese emergent creative scenes have been unique in many fields, including games, fashion, music, and more. Japanese creators have been offering in-house exclusive products that often embrace the local culture, unfolding narratives that can sometimes be tricky for outsiders to understand. The Web3 space is no exception.

Of course, numerous Western projects have significant fan bases and holders throughout the country – especially blue-chip NFT and PFP collections. RTFKT is one of these successes. By merging collectibles, gaming, fashion, and sneaker culture in a digital, screen-based environment, their creations have become favorites among Japanese cryptophiles. And when iconic japanese artist Murakami teamed up with the metaverse brand for their CloneX collaboration, it made waves. Still, Japanese creators launch new on-chain initiatives and Web3 projects daily, with many sharing specificities and visions deeply rooted in the domestic culture. This aspect makes the local crypto space unique and exciting, as it is complex to decipher correctly without cultural knowledge.

By hanging around Tokyo and being connected with creatives, it’s easy to witness the gap between the local Web3 and cryptoart scenes within the megapolis versus outside the country. In addition to the profusion of the anime-esque aesthetic, the almost-weekly NFT events, some of them sharing similarities with legitimate otaku gatherings, and of course, the PFP sticker exchange (which is taking over the business card ritual within the Web3 community), the increasing crypto frenzy seems to have finally made it to the mainstream. Today in Tokyo, you can stumble across normies talking Web3 at the 7-Eleven, or even enjoy an NFT-centric TV J-drama from the comfort of your kotatsu.    

Despite this, the adoption of NFTs has been relatively slow in Japan. According to Ren Stern, founder of virtual goods brand Senspace, we have yet to reach the peak of the hype, which is an excellent opportunity to skip the short-term profit-focused cycle, or at least shrink it, and jump straight to the long-term value-driven one. But with the love for limited collectibles, brand collaborations, a thirst for new trends and tech, and values centered on community and wellness, all the lights have turned green. The conditions have been met to shape a one-of-a-kind and flourishing Web3 space. Although let’s make it clear: visual artists paved the path.

If pop-culture driven projects and mainstream on-chain content have taken over the current Japanese crypto space, visual artists have led the way, being fairly represented since the late 2020 NFT boom. Some Japan-based creative minds like Kazuhiro Aihara, Kaoru Tanaka, mae, and Saeko Ehara, have been exploring smart contract magic, contributing to the space with their dynamic psychedelic visuals, pixel art, or generative art long before the digital tokens went viral throughout the archipelago.

While old-school work ethics (including strict business practices, lack of transparency, low flexibility, and slow decision-making) and Japan-localized freelance gigs were quite the norm, the Web3 space expanded possibilities for artists and creators to navigate in a more fluid environment. “I have been working in the entertainment industry making visuals,” Saeko Ehara told me when I asked her how NFTs are a game changer. “Right after I started minting, I connected to the online community and got many opportunities to showcase my work worldwide. NFTs erased the borders and canceled our isolation,” she said, adding that love and respect have been her watchwords while digging into the cryptoart space. Many will say that opportunities, globalization, and transcendence are similar to what happened in other locations around the globe, which is true. However, the whole pattern is slightly different here.

Visual artists kicked off the crypto creative movement in Japan. They opened the door and accelerated acceptance and understanding, explored the space alone and quietly for long months. Indeed, it took until early 2022 for most of the domestic Web3-powered communities, PFP projects, and branded content initiatives to emerge, instead of growing along with art-related creations, as it happened worldwide. During that incubation period, project initiators had been familiarizing themselves with the space. They watched, learned, and adjusted their future strategies to unveil mature projects that had been slow-cooking for months. This unrushed and cautious move, sticking to Japanese values like ganbaru (頑張る ~ effort) and gaman (我慢 ~ enduring), is the antithesis of many hyped pump & dump, accelerated projects as seen in the West. The resulting digital collections, anime-inspired assets, and on-chain projects have been drawing a dynamic and polished crypto landscape, pushed by limitless devotion and a collection culture without any equal in the world.

Scarcity has always been a big deal in Japan. Not only Supreme or Nike’s weekly drops or special collab releases, but almost everything limited in time or edition may grab the attention of its devoted community and can induce endless lineups. “I believe that the Japanese collector culture has now become a prominent culture in the world, and I am sure that NFTs will be essential in the development of this culture,” Japanese virtual human Imma explained to me when I asked about her view on this. “However, since the collection culture itself is already evolving in every industry, I feel that NFT is not the only mainstream and evolutionary force,” she added. “Rather than creating a large number of contents with the sole intention of making something collectible, the creators should focus on the value of the content they are creating,” she concluded, hinting at the collecting trend fueling consumerism. “I think the content comes first, and one way to expand the content is collecting.” 

Gashapon (ガシャポン) can be another great example that highlights how collectibles are ingrained in Japanese culture. These vending machine capsule toys have been popular among hardcore collectors and casual fans — adults and children alike — since the 1960s. Non-fungible collectibles are the digital era’s version and their extension within the metaverse. From a long-term perspective, because the Japanese culture of collecting runs deeper than trends, NFTs will allow tons of new possibilities as long as the concept of rarity and ownership habits are a thing.

Beyond the Gatcha-Gacha madness, anime, games, VTubers, and many more subcultures are essential add-ons to the Japanese crypto creative space. Many of these otaku-flavored Web3 projects have been staying local by choice or just because non-Japanese people are not ready for them. Still, some have reached the world, contributing to building a legacy and exporting a nation’s cultural heritage that Japan can be proud of. 

Shinsei Galverse is the best example among these success stories, being the first Japanese Web3 project to break out outside the country. “Before Galverse, PFP projects were strange phenomena in a distant land. Now big companies and IP holders are creating content to follow in our project footsteps,” Galverse’s creative director and co-founder Emi Kusano explained to me. “We feel lucky to have unlocked something, and I would like this project to continue being an example in the future.” Ranked first on OpenSea during a couple of days right after its release last year, the Showa-era anime IP and NFT project proves that through otaku culture, building a profit-disinterested and passionate global community is something possible. “Many people buy NFTs for speculative purposes, but I think lots of local Galverse holders are part of the project because they enjoy the community,” Galverse’s artist, animator, and co-founder Ayaka Ohira added. “In Japan, there is a culture of secondary creation, such as Comiket culture, and a culture of Oshikatsu (推し活 ~ act of supporting or cheering on something or someone you really like), and I can feel these vibes in the Web3 space.”

Finally, VTubers also have a say in this vibrant space. Of course, you can find them from all over the world, but they are quite big in Japan, and top accounts can rake in millions of dollars a year. They have brought a niche subculture to a thriving industry while steadily becoming creative builders in Web3.

Indeed, a major VSinger agency called KAMITSUBAKI STUDIO has begun crowdfunding with blockchain technology. According to metaverse-based Virtual Singer Edo Lena, this is the first step toward merging the VTuber community and the Web3 one. “I have been active as an individual VSinger for a few years. Still, I expect this culture to spread globally by connecting with the Web3 community, not just for otaku, and it will likely happen,” the diva told me, insisting that VTubers are aware of crypto scams and haven’t fully drank the Kool-Aid yet. “I believe the community fusion will crop off sometime soon. However, to reach that point we may have to wait for crypto to be integrated into daily life in the same way digital money payments are already safely used in Japan,” she concluded.

As the bear tendency is not that much of a downer for local forces, Japan will continue to develop its own ecosystem, crypto winter or not. The primary purpose is to genuinely explore Web3 as a tool, as well as the community building side, and, as much as possible, not to emphasize the profit and speculation aspects.

With a handful of talented young artists and creators, IRL Web3 hangouts like the Shibuya-located MUTANT STAND, and of course, Japan’s largest NFT event NFT ART TOKYO, nothing can block the crypto-creative scene’s growth. “NFT ART TOKYO focuses on IRL events with the mission of supporting all kinds of artist activities with NFT from behind-the-scenes,” OG team member Sadas told me. “In the future, we plan to collaborate with various events and communities to serve as a bridge between local NFT artists and the rest of the world.” Since the government announced last year its willingness to support and apply friendly legislation toward the development of the Web3 industry, and also big investors started putting big cash on the table, the crypto community’s rallying cry, LFG!, has never made much more sense than now.