NFTs have been making a splash ever since January, with trading volumes and demand going through the roof. While traditional investors prefer to buy Ethereum, the underlying asset for the whole NFT subsector, others are dipping their toes into the flipping potential of these assets and get handsomely rewarded.
In this article we look into four topics that made an impact in the NFT markets over the past few weeks, and could signalize what is expected to occur in the future. Make sure you see this as the start of your research, and delve into each option further afterwards. Let’s dig in!
Currently placed as the game with the highest volumes on DappRadar, Loot is an NFT collection created by Dan Hofman, former founder and CEO of Vice and Byte. The collection, and each individual NFT, are the prerequisite for the eventual participation in a virtual game that is yet to be released.
What makes Loot interesting is the method of the sale, and what happened after. Shortly after selling out 8000 unique Loot NFTs across multiple users that were able to mint them, the project’s founder airdropped 10.000 in-game tokens to each person that was able to acquire one.
The tokens, known as AGLD, increased in value after their release, to the point where each airdrop was worth more than $51.000. Such huge airdrops make a case for a new trend we are seeing across NFT, and we discuss it in the next chapters.
Communities around NFTs
Many wonder why anyone would ever spend millions of dollars for an JPEG image. Others don’t care to understand and simply buy them to sell them. However, with the slight maturation of the NFT markets, we can now start to see what makes them so scarce.
When buying an NFT, you don’t necessarily buy an asset, or a scarce item. You buy the rights to belong to an exclusive community which keeps on giving. Cryptopunk owners, for example, share a private channel where they can communicate and talk about “rich stuff”. Other projects do regular airdrops to their NFT holders, releasing secondary versions for NFTs, giving back part of the artist royalties, and offering access to new ways of generating passive income.
Communities, and more specifically exclusive inclusivity, is what draws most attention to expensive NFT projects. And as we are headed to the final leg of this bull market, we expect to see NFTs detach from the fluctuation of cryptocurrencies, maintaining their value even in the case of a bear market. After all, NFTs are rather illiquid, and the only thing that would change in such a case would be the transaction volumes.
GameFi – Merging NFTs and the Metaverse
There has been a lot of talk about the Metaverse, especially since the success of Axie Infinity. Play to earn crypto games have given rise to a brand new industry that utilizes NFTs – GameFi.
The term refers to the merge of games with decentralized finance, a combination that only becomes possible through interactive NFTs, and a viable token economy. While it is still very early to make predictions about the future of the Metaverse, we do believe that it’s important for everyone to keep an eye on the GameFi sector, and research projects that are trying to improve the space. Examples include coins like UOS, YGG, IMX, and others.
Another interesting aspect of the GameFi area is the growth of such platforms as DMarket, an in-game NFT marketplace that makes trading easier for the gaming audience. People get their assets in various games and then can sell them and easily get real-world money — that’s quite an attraction.
Also, DMarket is arguably the best NFT marketplace for traders with an emphasis on gaming. Even now it has many users who are involved in trading of more traditional in-game items, such as CS:GO skins. These people are eager to experiment with new game universes, so traders find many potential customers. The business is pretty straightforward — on DMarket, you buy NFT, keep them for a while on your account, and then sell when the demand and price promise good benefit. Such a simple strategy is actually working, and the whole phenomenon is obviously here to stay.”
Influencers and celebrities join the action
Twitter is a great space to stay ahead of the curve, especially when it comes to NFTs. As of late, with the rise of NFTs, multiple influencers and celebrities have start to voice their support and promote NFT projects.
- We saw Bassjackers promote Bored Apes on large screens during their live concerts, while Stephen Curry even placed a Bored Ape as his avatar.
- Gary Vee, Logan Paul, the NBA, and many other large names in the sports and entertainment industry have released their own NFT lines.
- Paris Hilton is heavily involved in the industry as well, and the list goes on.
All in all, we see a the trend of celebrities wanting to embrace NFTs for their status-enhancing and money-making potential. Naturally, this will increase demand for the industry, much like we saw earlier with the Bitcoin price, shortly after institutions and celebrities started to promote it heavily.
Non-fungible tokens have gone from a theoretical concept to a booming, multi-billion dollar industry. What started with Cryptokitties back in 2017 is now set to completely transform the world, merging technology with real life.
This article discussed some of the trends to look out for in the next few months, to better position yourself for the opportunities that have yet to arise. From here, make sure you continue your research, and understand the current risks of the market, before choosing to allocate your personal capital.