- NFTs recorded a comeback sale of over $25 million in 2021.
- NFTs are being integrated with the gaming industry and virtual reality (VR)
Non-fungible tokens (NFTs) may have come to popularity as blockchain-based JPEGs but there is more than what meets the eye. In fact, one of the earliest NFT innovations ‘Crypto Kitties’ was launched as a play-to-earn game on the Ethereum blockchain. While the development of NFT projects seemed to have slowed down between 2017 and 2020, it is a no-brainer that the 2021 comeback took the tech industry by storm; NFTs recorded over $25 million in sales.
So, what exactly brought NFTs to the limelight? As much as there are several factors that have propelled NFTs to rise to fame, Beeple’s $69.3 million digital collection sale was certainly a pivotal moment. The long-time digital artist ‘Mike Winkelmann’ made headlines in February 2021 when his collection, Everyday’s – The First 5000 Days, ranked among the top three most valuable sales in the Christie’s auction.
Following Beeple’s milestone, the NFT ecosystem has become a beehive of activities, with sports personalities and celebrities joining the bandwagon. The launch of limited JPEG NFT collections such as CryptoPunks and Bored Ape Yacht Club (BAYC) gave even more meaning to this futuristic niche market. Today, both collections have a floor price of over 60 ETH, which is quite a high figure for the average crypto investor.
What’s more fascinating is that NFTs are now scaling past the JPEG narrative, marketplaces such as NBA Top Shot have introduced a whole new realm; users can collect special basketball moments and trade them as digital collections. Currently, the most expensive memorabilia on this platform is a Lebron James dunk, whose asking price is almost half a million U.S dollars.
“At The Boardroom, we’ve also been at the forefront of the NFT space, and I’m excited to partner in advancing NFTs further into the mainstream, creating and curating exclusive moments and content with Top Shot,” said Brooklyn Nets Kevin Durant upon entering a partnership with Dapper Labs.
NFT Games and the Metaverse
Besides JPEGs and short-video collections, NFTs are being integrated with the gaming industry and virtual reality (VR). The latest statistics from Dapp Radar revealed that blockchain games accounted for 52% of the DApp usage in 2021, most of these projects are NFT-oriented. For example, the Axie Infinity game enjoys over $4 billion in total sales, having gained traction as a passive source of income in developing economies like The Philippines.
One might then wonder how exactly NFTs add value to the gaming ecosystem; simply put, NFT games introduce an aspect of monetization. Players not only have an opportunity to increase their skill by acquiring in-game items such as weapons and advanced skins but can also trade these collectibles on NFT marketplaces like Opensea and Rarible. It’s like killing two birds with one stone – enjoying the game while earning some extra coins.
On the metaverse, otherwise known as the virtual world, NFTs are a primary tool in their development. They act as the fundamental building blocks of Web 3.0 ecosystems like Decentraland and The Sandbox. Ideally, virtual land parcels and other infrastructure amenities on these two metaverse platforms are represented on the blockchain as unique NFTs. This means that one can trade their land piece as a digital collectible on available marketplaces.
As of writing, the floor price of land on Decentraland and The Sandbox are at 1.5 ETH and 0.96 ETH, respectively. While some stakeholders believe the Metaverse is overhyped, big tech seems to have a differing opinion. Both Meta and Microsoft have expressed an interest in the metaverse, with the latter’s CEO Satya Nadella hailing the potential of investing in the development of virtual worlds.
“When we talk about the metaverse, we’re describing both a new platform and a new application type, similar to how we talked about the web and websites in the early ’90s. It’s no longer just playing a game with friends. You can be in the game with them.” – Satya Nadella.
Scaling the NFT Potential
Looking at the progress of the NFT industry, it is evident that the untapped potential is massive. Gaming and art have proved that NFTs indeed have a place in tomorrow’s digital ecosystem, one where users will be able to prove authentic ownership of real-world assets on the blockchain. That brings us to an important question; which other sectors are following the NFT path and could balloon in the near future?
1. Film and TV Production
In its current state, the Film and TV production industry is heavily reliant on investments from big brands or high-networth individuals. NFTs change this narrative by creating a way for content creators to source funding through blockchain ecosystems. For example, the Looking Glass Labs (LGL) Web 3.0 platform recently launched a thrilling sci-fi live-action series ‘GenZeroes’. This production is being supported by fans who purchase or receive an airdrop of their Genesis NFT collection.
Some of the additional perks of joining the GenZeroes community include exclusive access to view the sci-fi series and behind-the-scenes content. Furthermore, the fans who hold these NFTs will have an opportunity to vote on the plot development over time. While it may seem like an uphill task to build a fanbase, LGL’s pioneer NFT collection sold out within 37 minutes, netting a total of CAD 6.2 million.
2. Fantasy Sports
Fantasy sports is another industry that could significantly benefit from NFT integration. In the U.S alone, the fantasy sports market is valued at $8.8 billion, with an estimated 45.9 million people engaging in the game. The value proposition of NFTs in this ecosystem is pretty straightforward, they increase the opportunities for monetizing one’s skills through decentralized digital collectible marketplaces.
To this end, there are upcoming Web 3.0 platforms such as Maincard which recently launched its mainnet. Unlike the typical fantasy sports websites, Maincard’s NFT-powered ecosystem allows players to purchase NFTs and use them to place sports predictions. In return, players are rewarded with a native token dubbed ‘MainCoin’ for every correct fantasy bet. But more interestingly, it will be possible to liquidate MainCoin tokens as they are scheduled for listing on several exchanges in Q1 2023.
As highlighted in this article, NFTs could become the next big thing in several industries. The idea is far much greater than play-to-earn ecosystems, digital identities can also be integrated with the NFT architecture. However, there is still a lot to be done before stakeholders from the private and public sectors can adopt NFTs. Innovators need to fix several issues like interoperability and overall reliability of existing blockchain networks. This is the only way the NFT trickle effect can be experienced across the board.