Discover how Yamakoshi village in Japan is leveraging NFTs to attract digital citizens and support its aging population, potentially setting a precedent for other nations facing similar demographic challenges.

In the secluded mountains of Niigata, Japan, the small village of Yamakoshi is pioneering a unique approach to combat its aging population and declining birth rate through an innovative NFT strategy. The Neo-Yamakoshi Village project has attracted 1,700 “digital citizens” by selling non-fungible tokens (NFTs) in an effort to generate funds and sustain community activities. This initiative could serve as a model for other nations facing similar demographic issues, according to a report by Japanese research and consulting firm Yuri Group.


The Neo-Yamakoshi Village Project

Launched in 2021, the Neo-Yamakoshi Village project is spearheaded by local residents who manage the Nishikigoi NFT collection. Named after the vibrant breed of koi carp, these digital assets serve as both an identifier for Yamakoshi’s “digital citizens” and as governance tokens for participation in the village’s decentralized autonomous organization (DAO)-managed voting processes.


Since its inception, the project has raised over $423,000 through the sale of Nishikigoi NFTs. These funds have been allocated to various community initiatives, such as organizing a sports day for local school children. While physical residents receive the tokens for free, digital citizens must purchase them, with the floor price set at 0.0318 Ether (approximately $3,384 as of June 26), according to the NFT marketplace Magic Eden.


Global Interest and Potential Impact

The success of the Yamakoshi initiative has not gone unnoticed. Yuri Group's report suggests that if this strategy proves effective and is adopted by other villages, rural Japan could potentially raise up to half a billion dollars. This funding could support local communities while also promoting new social technologies with global appeal.


Japan’s Prime Minister Fumio Kishida has highlighted the importance of Web3 technologies in achieving “Society 5.0,” a vision that integrates advanced technologies like artificial intelligence, the Internet of Things, and big data to create a sustainable and advanced society. The Neo-Yamakoshi Village project received a grant of 10 million yen (about $62,500) from the ruling Liberal Democratic Party to test and implement these Web3 tools.


Challenges and Opportunities

Despite its promising start, the project has encountered several challenges. Educating older adults about the technology and its benefits has been difficult, resulting in low voter turnout for the DAO-managed processes. Language barriers have also posed issues for overseas digital citizens.


Moreover, the global NFT market has faced a downturn, with trading volumes dropping significantly in recent months. According to CryptoSlam data, global NFT sales volume is on track to close the second quarter of 2024 down 45%, with June projected to be the worst-performing month since October 2023. NFT market capitalization, dominated by collectibles and avatars, fell by 31.5% in the three months leading to June 26, according to NFTGo data.


Nevertheless, researchers at Yuri Group believe there is room for both practical NFTs and profile collectibles in Japan. “This is Japan, after all — the home of anime and manga and a country with a huge physical collectibles culture that lends itself well to NFT adoption,” said Will Fee, a researcher at Yuri Group.


The Future of Yamakoshi and Beyond

Yamakoshi’s virtual town hall, open to both physical and digital citizens, represents a blend of traditional community values with modern technological advancements. This hybrid model could inspire other rural communities in Japan and globally to explore similar strategies to address demographic challenges.


The Neo-Yamakoshi Village project exemplifies how NFTs can be more than just digital collectibles; they can be tools for social impact and community building. As Japan grapples with its record-low birth rate, innovative solutions like Yamakoshi’s NFT strategy could pave the way for sustainable development and community revitalization.


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(YOHAN YUN, COINTELEGRAPH, 2024)