Macrotrends in NFTs

NFTs, or Non-Fungible Tokens have taken the world by storm. It is now possible for people to create (mint) their own digital assets with immutable properties, on-chain authenticity, and proof of creation and ownership. While all these attributes seem impressive in themselves, we are only just scratching the surface of the true power of NFTs. In this article, we try and explore some of the areas of growth in this sector over the next 3-5 years.

DeFi, or Decentralised Finance, is one of the main market movers and the frontrunning reason for people to get into blockchain. NFTs act as a proof of ownership which means that they can signify a person’s vested interest in a project. This has been very well demonstrated by Digitalax who created Pode NFTs before launching their successful MONA$ token. Thus, we see how NFTs that are purchased at the inception of a project can yield rewards for the entire duration of it and the funds raised during the initial sale contribute towards the capital required to make all these activities possible.

Fashion, among other brands has aggressively moved into the realm of NFTs and Digitalax isn’t the only example. NFTs bring out the true power of digitally viewing assets in a 3D space and can be worn around in the metaverse. The metaverse is one of the finest testaments to the longevity of NFTs as its signifies proof of ownership of land in there. The metaverse has also served as a great way of displaying the NFT collections of various projects and collectors, as well as includes a whole range of wearables for people to interact with. Going forward, I anticipate that people will be able to buy items that can be used in the metaverse, things like roller-blades, cars and even jet-packs. The metaverse also serves as a great place for networking and building up connections. NFTs can help utilise this aspect of social media by verifying people’s ownership of certain tokens, as well as their affiliation to certain projects and communities.

Utility such as automatic access to tokens, both via explicitly as well as implicitly staking NFTs is another great trend that is starting to take shape. Staking refers to the process of committing an asset to a pool, that keeps it locked in, thereby reducing the circulating supply. This in turn, drives up the floor price since supply reduces in proportion to demand causing people to buy more (ape) into the project. The reward for staking is a recurring supply of an ERC 20 token (crypto currency) which can in turn be used to trade or avail some other utility. For example, projects can sell NFTs to fund-raise and build the infrastructure required for the entire project. They can then create a staking contract, or periodically distribute tokens to all the people who own NFTs. This can in turn be used to claim utility that they original project has now built and the more utility they build, the more the token will appreciate. A good example of this is CyberKongz, SupDucks, and the Wicked Ape Club who all follow this model. Sharding is also another concept that will gain popularity, with people looking ot buy pieces of their favourite NFTs that would otherwise be unaffordable.

Proof-of-Attendance is another such implementation of NFTs where people can claim an NFT at a virtual or in-person event and receive NFTs that are especially minted for this purpose. Going forward, it is anticipated that these events will become more prestigious making these NFTs a status-symboland therefore more coveted.

GameFi is blockchain gaming combined with decentralised finance. It involves hosting a game on the Blockchain which is then linked to a combined token economy. A great example of this is what GALA Games is doing. They have a token (GALA$) which is earned by the players of each of their game. Every in-game asset is represented as an NFT which in some instances is cross-game compatible.

All things considered, the true future and utility of NFTs is, and has always been their attachment to physical items. NFTs are the most tangible assets in the crypto space, they are relatively easier to understand and associate with. The fact that they often have a visual representation makes it easier for people to relate to their existence, understand their worth, and speculate on their projection. Combining this with concepts that people have learned to familiarise themselves makes the journey over to decentralisation more seamless, and understandable. NFTs are the perfect technology for things like Ticketing, whether it is movies, flights, or concerts. They remove the hassle of having to verify the identity of people by making it decentralised. NFTs can be used to more effectively trade physical collectibles since they provide proof of authenticity and also imbibe the value of it. Many tradeable and appreciating assets such as whiskey and wine are also looking toward NFTs, some notable examples being Bored Wine Co, and Metacask. NFTs have become people’s digital identity that they can use, change and transfer. They are the key that can unlock the world of decentralisation and blockchain, and they represent the front-end of a highly complex and ever evolving system of smart contracts. People who embrace, innovate and understand the true power of NFTs stand to gain tremendously in the next 3-5 years.

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