NFTs have boomed, and crashed.
Or have they?
There is a lot of controversy and scepticism about Non-Fungible Tokens, to the point where they are synonymous to many things: digital art, (bored) apes and kitties, (paid) celebrity endorsements, pump and dump etc.
However, the technology behind it, popularized by the boom in 2021, holds a lot of potential. It basically allows ownership of digital assets (or digital certificates of physical assets).
The Future of NFTs report, which we are publishing today, attempts to give a crash course of NFTs, and perspectives on its future potential.
You can get a copy of the report here.
Spoiler: we are very optimistic about NFTs and their use cases, however they can only be realized once Web3 adoption reaches critical mass (currently only 1%).
Here is a sneak peek into the report:
- How did NFTs evolve over the years?
NFTs have come a long way, but it still mainly just digital art (for the time being).
- Ways to acquire, hold or transact NFTs
You need a Web3 wallet, and marketplaces facilitate the exchange of NFTs. What is the most common way of making payments? Cryptocurrencies.
- OpenSea remains the largest NFT marketplace
Many marketplaces have been created, but OpenSea remains much bigger than the next alternative. Its cumulative sales volume has exceeded $32 billion.
They charge 0-10% of the transaction value.
- Real world use cases of NFTs (start to) emerge
People have been arguing that “NFT is more than digital art”. Yes there are some potentially promising real world use cases – authenticating, verifying and transacting digital asset ownership.
Their adoption, though, is at best nascent, and often conceptual, at this stage.
- NFTs continue to evolve, but do not expect wide scale adoption over night
As with any new technology, pioneers keep innovating NFTs, creating new variants such as would bound tokens and semi-fungible tokens.
Wider adoption will depend on user onboarding (into crypto wallets or Web3 in general).
- Only 1% of the world’s population is on Web3
Are we at a time similar to 1993 for the internet on the adoption curve of NFTs (or Web3 in general?). Perhaps it will still take 5-8 years for any real use cases to be widely used, perhaps shorter.
However, the future is the future, even if it takes longer to realize.
If you would like to have a crash course on NFTs, and understand more about its potential (and how to realize this potential), you can get a copy of the Future of NFTs report here.