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Over the past few months, the non-fungible tokens (NFTs) market has been collapsing as the cryptocurrency industry faces one of its worst drawdowns in the last couple of years. In May, the Wall Street Journal published an article forecasting a possible death to the industry, shaking up the NFT world, as it explained the current value drop as “the beginning of the end” for these digital collectibles.
Understandably, the current bear market in the crypto world and subsequent value drop in NFTs has raised concerns amongst the crypto faithful, many asking the question: Where the NFT market is headed, and what value can these digital assets offer in the future?
In this piece, we discuss the rise and fall of the NFT market, its connection to the current market, and why the market is here to stay for a long time. Most importantly, we look at the current innovations in the NFT space and how they will offer huge potential in virtually any industry around the globe in the near future.
If you have followed the crypto scene in the past two years, you must have come across, heard, or owned NFTs. Non-fungible tokens (NFTs) became the hottest topic in the crypto universe across 2021, as mainstream media, celebrities, athletes, and even government officials went all in on digital assets. However, it is Beeple’s now-famous NFT artwork, “Everyday’s: The first 5000 days”, which sold for $69 million at Christie’s auction, that really caught the eye of investors.
Since the sale, the NFT market blossomed, with digital artwork as the main center of attraction with projects such as CryptoKitties, Bored Ape Yacht Club (BAYC), Azuki, and NBA Top Shot recording eye-catching value increases during the “NFT Bull Run”. According to Non-Fungible.com, the average daily value of an NFT sold reached an all-time high of $37,560 in October 2021, with the total daily sale value of NFTs peaking in August 2021 at $85.9 million.
Most of the NFT market value was driven by digital artworks, which are rapidly becoming obsolete, which has led to many experts predicting a total collapse in the NFT industry. Despite the average daily value of an NFT dropping to $2,100, and the total daily sale value to less than $1 million, the collapse of NFTs is not likely. However, it would be misguided to think that NFTs (especially digital artwork NFTs) will regain their 2021 form as investments and collectibles.
The collapse of the digital artwork NFTs in 2022 (Image: Nonfungible.com)
Nonetheless, NFTs have the potential for functional, real-world utility as the world moves closer to a Web 3 revolution. The technology offers a unique digital representation of original ownership, which could be translated into various industries and evolve, unlocking a rich new set of features for these digital collectibles.
It is critical to understand that the value of NFT collections is built on three pillars namely utility, community and culture. When looking for value in NFT collections, it can be a combination of multiple or only one aspect. To this end, projects and companies are rapidly innovating new utilities, creating stronger communities and cultures around their NFTs and adapting their businesses to the fast-growing industry. In this section, we look at some of the companies leading the new generation of NFTs, focusing on how the NFT space may look in the near future.
As the world continues to embrace NFTs, there will be several applications built on the idea, and in turn, lead to the growth of all-inclusive and immersive NFT-related universes. One such project, Looking Glass Labs, offers a Web3 platform specializing in NFT architecture, immersive metaverse environments, play-to-earn tokenization, and virtual asset royalty streams. This brings all marketing, partnerships, development, community engagement, and any other service related to NFTs in one place, saving the user complications of finding each service on its own.
Secondly, the sublime rise in blockchain-based gaming is expected to grow even faster in the near future with the adoption of NFT solutions and rewards. Jump.trade, an ecosystem creating gaming NFTs attached with utilities that include real-time use cases, aims to bring Cricket gaming and other innovative collaborations to the space.
Additionally, Jump.trade with its prominent MCL game, will enhance a behavioral spectrum where individuals understand the enormous meta possibilities that the NFT space amalgamated with gaming can offer.
One of the most untapped utilities of NFTs is the “non-fungibility” and unique properties of these digital assets. Largely, NFTs have been seen as assets but they could offer far more utility than digital art, music, or gaming properties. Over the past few years, digital identities and privacy of online information have been largely ignored, with users frequently exploited by big data firms or other parties for their data.
NFTs could be one of the biggest solutions to this by enabling users and service providers to have a better authority and control over their personal data and identity. They can help replace password based logins with decentralized authentication (the NFT). Simply, service providers can issue an NFT to users, which can then be stored on a digital wallet, granting the holder access to an online platform.
The rise of NFT gaming has been nothing short of amazing and exhilarating in the past year with thousands of blockchain gaming projects jumping on to the scene. The idea has been to combine crypto and gaming to allow players to earn as they play. However, very few of these companies have actually created a game that will captivate their audiences and provide the fun and excitement of their traditional counterparts.
MonkeyLeague, an AAA-quality web3 soccer game, aims to change this by creating a high quality game that is very easy to learn, but hard to master. Simply, players build their own team of players using MonkeyLeague’s digital assets (NFTs), play matches against real people, win tournaments, and climb the ranks – in an immersive and fun world. Additionally, the players can enhance the MonkeyLeague NFTs by breeding them to create better players and win tournaments.
As shown above, the NFT world is yet to mature but massive innovations and developmental progress is being seen in space. In the next decade, with the NFT expected to reach an annual sale value of $80 billion, users should expect to see a huge revolution and evolution in the space, with NFTs gaining new utility value.
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