The global NFT market has seen its ups and downs, but this dip has the internet rife with rumours that the market is collapsing. While sales have been down 92% worldwide, this doesn’t necessarily spell the end of the NFT market. Data reported by NonFungible shows a transaction volume decrease of 47% this Q1. But here are 5 reasons why NFTs are here to stay, that aren’t making it to the top of any NFT marketplace news.
1) They’re non-fungible
Okay, I know you’re wondering why I just quoted the definition of NFTs as why they’re here to stay but that’s precisely the point. NFT means non-fungible tokens, files that are unique and non-interchangeable. The global economy is increasingly being skewered towards ownership and brand value. The world of NFTs is increasingly being populated by brands and companies that don’t want to miss out on a new segment of customers. Why do you think that is?
The number of users in the metaverse has rapidly increased to a point where uniqueness and brand value are how users want to differentiate themselves from the crowd. The potential of NFTs is limitless and the number of brands launching or integrating NFTs is on a consistent rise. NFTs are unique and will continue to be, even with mainstream integration. Whether you’re a fan of an artist selling his/her creativity on the blockchain or you’re an experienced metaverse user who doesn’t want to be part of the crowd. The signs of this mainstream integration being pushed to the next stage is the integration of popular web 2 based platforms with NFTs, as was seen recently with Twitter launching NFT integration with profile pictures. What made this unique was that users who had verified NFTs were given hexagonal profile picture cutouts, a sign that these handles were verified owners of NFTs. Helping these handles stand out from the sea of “Normies” on Twitter.
2) It’s new & volatile, not fake
Like with any new industry, initially, while there is a ‘craze’ the market eventually enters a maturity phase and the NFT market isn’t any different. But likening NFTs to a bubble-like tulipmania is doing the entire market a huge disservice and is also blatantly untrue. To critics of the NFT market, NFT games and any related industry, this is a bubble brought on and accelerated by events like the 2008 economic crash or the COVID pandemic and isn’t a sustainable industry. However, judging by the vast integration, and the money that has been pumped into developing an ecosystem around them eg: Mark Zuckerberg’s Instagram and NFT integration announcement, the evidence points otherwise. The future of social networking is heading to a more online experience, with Meta integrating even more closely with its subsidiary & producer of VR headsets — Oculus. A new experience awaits us in the future as we move to a truly digital a.k.a “Meta” experience. That’s where the craze for NFTs comes from, from investors and users who understand and see the true potential of PFP NFTs. But this doesn’t just stop with PFP NFTs that users want to hang up on their Digital walls, I want you to think of this as individuals moving in and buying up large swathes of property on a newly discovered island or continent. The craze is because everyone wants to leverage the first-mover advantage.
3) The wide range of utilities
NFTs aren’t just jpegs as we’ve mentioned earlier in our previous blog, How NFTs add value.
The wide range of utilities that NFTs bring to the table primarily involves combining NFTs and the capabilities of the blockchain with applications in the real world, or the easier way to say it is-NFTs with real-world utilities. The utilities these types of NFTs bring to the table are varied and valuable.
Diginoor recently auctioned the last ever song of Indian Music Legend Shri. S.P. Balasubrahmanyam, the owner of the NFT got 51% of the copyright to the song, ensuring they earn royalties every time the song is played, in perpetuity.
Another area where NFT utilities have taken off is NFT games and gaming. NFT gaming has evolved from just in-game accessories to a community that is actively supporting decentralising the supply-chain ecosystem, like WOF (World of Freight). WOF has even launched 1/1 NFTs that generate $WOF tokens daily. NFT gaming platforms like fractal have taken it a step further, with fractal NFTs that allow users to use these NFTs to obtain benefits and incentives across games, building out a cross-game NFT utility. Another example of the innovation that NFTs have brought to the gaming industry is Axieinfinity, a unique game where players are paid in AXS tokens to play and can use these tokens for in-game purchases, with utilities extending up to players using AXS tokens to decide the future of the game.
These new and innovative NFT games are just the first few that have emerged after the rise in popularity of NFTs.
4) The Rise of NFTs in gambling/sports
The use of new technologies in the economies of competitive sports and gambling isn’t new, but what is new is the rise of decentralized gambling and sports betting. These are different from NFT games in the sense that they exclusively cater to real-world & large sports franchises. The most prolific rise in this sector is the rise of NBA TopShot, which hit a new record in sales. The official NBA TopShot sales volume to date is an eye-balling $180 million to date, with NFT moments from prolific games going for up to $78,000. While NFT prices have been known to reach staggering highs, this is a first for an NFT-sports platform. The per-day NBA TopShot sales volume has now hit $46 Million, as reported by Action Network. India’s Cricket NFT industry has also seen exponential growth, with companies like Rario & FanCraze capitalizing on cricket fandom. Now, getting to the gambling aspects of it, Slotie is a decentralised gambling platform, the largest on the blockchain that also offers users IRL or in-real-life benefits at over 150 casinos worldwide. Token holders get various perks like revenue share, with only 10,000 VIP tokens ever minted, as the popularity of DEFI gambling or decentralised gambling grows so will the value of these tokens.
5) The use of NFTs in Charity
Ever heard that NFTs save lives? Well, now you have because it’s true. The use of NFTs hasn’t just been to make money, it’s also been used as an extremely effective way to donate and support just causes. The booming NFT market has seen multiple charities and organisations to turn to them to raise money as other sources of charity dried up. This couldn’t come at a better time as the world grapples with the aftermath of COVID & the war in Ukraine. The Ukrainian media has pioneered the use of NFTs to keep the press free by selling NFTs that were used to fund their operations in warzones, ensuring that the flow of information from these places didn’t stop. In addition to this, the American Red Cross has been accepting bitcoin since 2014 & UNICEF launched its crypto fund in 2019 to allow it to accept crypto donations. Beeple, the 3rd most valuable artist alive recently sold an NFT for $6 million and donated the entire proceeds to charity.
But what about the planet?
A Brazilian company, Nemus, is selling NFTs granting buyers unique sponsorship of different sized tracts of forest, with the proceeds going to preserve the trees, regenerate clear-cut areas and foster sustainable development.
Conclusion
While it may be contested that buying NFTs has become an expensive affair and that the NFT market is in its nascent stages, calling it a bubble and writing off NFTs isn’t based on facts. The NFT market will go through some brutal ups and downs but because of the utility provided by these non-fungible bits of data, they aren’t going anywhere anytime soon. The survivors of this dip will soon emerge, to take over the market and provide even more innovative utility.
NFTs are a game-changer and they’re here to stay. Here’s an analogy for you Thalaivar fans out there:
As Rajinikanth once said in an AVM movie, Sivaji — “Pigs come in a group, but a Lion always comes alone”, not sure how this applies? That’s alright it’s a cool dialogue, use it as you please. You’re welcome.
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