The transaction volume of the entire NFT market crossed US$16 billion in November 2021. In 2020, it was only US$355 million, which shows how impressive of a run NFTs have made to create a new asset class in the crypto industry. At the beginning of 2021, the market was mainly dominated by sports highlights and trading cards. But in the second half of the year, we saw NFTs take new forms, which created multiple market segments such as virtual real estate, gaming avatars, and fashion.
Seeing the growth and evolution of NFTs, investors started to see long-term value in NFT and metaverse-based projects. As a result, many NFT gaming companies that aim to create virtual worlds raised tens of millions of dollars. An example is True Global Ventures which invested US$10 million into a metaverse leader, The Sandbox which is launching their Alpha access at the end of November 2021.
The goal here is to take NFTs beyond digital art and status symbols. As the underlying technology, blockchain, of NFTs allows for greater transparency and trust in ownership, it can be used in creating new business models or making the existing ones more efficient.
Though it is still relatively early in NFTs, we might just witness the birth of new use-cases that can change the whole world. Some are already making that difference:
Generative NFT Art Becoming More Innovative
Generative NFT Art gives artists the ability to generate different variants, but making sure that each of them is unique and with different rarity of attributes. Probably the most famous project so far is the 10,000 unique CryptoPunks that are used as a status symbol as they keep fetching higher and higher prices on the market places, and have made their way to top tier auction houses like Christie’s.
As more projects are created everyday, many of them have started to “innovate” for example a Bored Ape Yacht Club NFT holder would get digital vials of mutant serum, which they could mix with their Bored Ape to create another NFT – a Mutant Ape. This engages the community of holders and incentivizes them to keep on holding their NFTs to be part of this exclusive group.
Then, there are other innovative projects like Mauer, where they take the historical and emotional aspects of important human history, and mix it together with art and deploy them as unique NFTs. It tells the extraordinary stories of a divided world, as relevant today as it ever was, where a majority of the proceeds will go to charities that work for freedom and democracy across borders.
NFTs Changing the Metaverses
Metaverse could be the biggest bet of this decade and NFTs increase their odds significantly. By incorporating NFTs in a metaverse, users turn into creators, allowing them to monetize their content and to have true digital ownership. It can be anything as long as it adds value to the metaverse. Not only that, they can use NFTs as a provable identity card, or with the prerequisite reputation, in order to access exclusive events, groups and virtual spaces.
For example, in a virtual space like The Sandbox, users dictate the future of its ecosystem, as they are the ones creating and developing game assets. This metaverse also offers VoxEdit, a powerful 3D modeling tool, to easily create assets and convert them into NFTs.
The Sandbox is now the number one NFT Metaverse in terms of unique addresses, with over 500,000 registered wallets and 12,000 special virtual LAND owners. In November 2021, they generated more than US$144m worth of lifetime Gross Merchandise Value (GMV) sales and it looks to be growing even more in 2022.
NFTs Making Music more Equitable
The unequal distribution of revenue in the music industry has been a long-standing problem. On top of that, there is a lack of transparency and low royalty rates on most current streaming models. Now, this can be solved by tokenizing music tracks as NFTs. Artists immensely benefit from creating music NFTs, as they can release their album on-chain with higher royalties and avoid sharing a huge revenue split with third parties.
Apart from the monetary upside, artists can involve their fans and build a passionate community. Building a community will help artists to directly connect with fans and start crowdfunding and crowdsourcing ideas/inspiration for new Albums. Artists can even issue their NFTs to raise funds and offer their fans the chance to earn a portion of the revenue generated by the artist.
Mass NFT Adoption is Just a Matter of Time
With so many use-cases penetrating the real world and adding significant value to people’s lives, it is only a matter of time before we see full-on mass NFT adoption. We will see the creator’s economy change completely, as every creative takes back more control and can monetize in multiple ways with the help of a community. Metaverses and Play-to-Earn games will fully integrate NFTs into their economic model and will create the next generation of gamers, who will not only enjoy their time in Metaverses and Games, but would also likely be able to earn money while engaging in these activities.