Non-fungible tokens, or NFTs, are used to track ownership of assets, whether virtual or physical, such as artworks or collection items. NFTs have been around for a long time, possibly since the inception of the blockchain.
According to DappRadar data, the NFT trading volume surged to $23 billion in 2021, and this figure is expected to rise even further in the coming year.
According to the Lithuania-based blockchain analytics firm, the number of unique active wallets that interact with NFTs on a daily basis has increased from 5,000 at the start of the year to around 140,000 at the end.
NFTs Had an Amazing Year
There are numerous factors that contribute significantly to the wave of NFTs this year, most notably the active engagement of celebrities, popular figures, famous brands, the bloom of GameFi, the investment of small to medium businesses, as well as high-profile companies.
Previously, celebrities had few options for generating revenue from digital assets. If they wanted to generate revenue, one of the few options was an ICO. Furthermore, they could put their money into potential startups.
However, thanks to NFTs, they can now capitalize on their celebrity by releasing digital collections of anything, including artwork, albums, trading cards, and merchandise. These tokenized collections will then be traded between fans and investors on the open market.
Celebs and Fans Flock to NFTs
Paris Hilton, Eminem, Naomi Osaka, Snoop Dogg, and Grimes have all joined the NFT craze.
Celebrities ranging from musicians and athletes to actors and supermodels are mining and auctioning off a wide range of properties, and blockchain-based goods have piqued the interest of many digital savvy. These artists can connect with fans in the digital realm through NFT, opening up new revenue streams for them.
Sports stars, in addition to artists in the entertainment industry, are embracing NFTs.
Take NBA Top Shot, the basketball card trading game that turned the creator of Dapper Labs into a multi-billion dollar company. Top Shot provides NBA fans with the opportunity to purchase, sell, and trade featured, iconic video content.
This formula is being applied in a variety of other sports, including baseball, football, and motor racing, among others.
Probably Not the End for NFTs
Aside from all that, ONE Championship, the largest mixed martial arts (MMA) promoter in Asia, recently announced that they will launch a marketplace on the Theta platform.
It will offer NFTs with exclusive benefits to participants in the real world, such as backstage access, ring seating, and other unique experiences are available to members.
The blockchain game has piqued the interest of many in the fashion industry, as well as high net worth individuals.
Many luxury fashion groups, including Kering, Gucci, D&G, and LVMH, have announced plans to enter the potentially lucrative virtual reality (VR) market with collections of virtual wearables and items.
As far as the gaming industry is concerned, GameFi (blockchain-based games) has quickly established a large and loyal following of supporters. Play-to-earn has emerged as a new trend and the most effective application of NFTs.
The excitement surrounding GameFi captivated venture capital investors, who made an estimated investment of $4 billion into the category.
Modesta Masoit, DappRadar’s head of finance and research shared thoughts on the NFTs, stating: “The hype is coming down…Most likely, 90-95% (of projects) might go to zero at some point,” she added.
META is Just the Beginning
The announcement of Facebook’s rebranding is the hit that inspires other companies to willfully participate in the nascent market.
While many predict that the NFTs’ downtrend is only a matter of time, NFTs have left a mark for the upcoming hype – Metaverse.
The Metaverse is thought to be the internet’s next generation. It appears to be a far-fetched vision of the future, but tech giants like Meta’s Mark Zuckerberg are betting big on it.
Zuckerberg was successful with Facebook. It totally makes sense if he can make another hit with Meta – but it won’t be the only game in town.