NFTs, which once fell from the vanguard of the digital wave to a joke during the cryptocurrency bubble burst, are suddenly making a comeback in an unexpected way.
When the cryptocurrency bubble burst in 2022 after a series of scandals, no corner of the market experienced more pain than NFTs. CryptoSlam data shows that global NFT sales plummeted 63% to $8.7 billion last year, with many assets almost become worthless.
Those who splashed out big bucks to buy the hottest NFTs were derided as fools, with some investors even suing celebrity NFT promoters, claiming they were defrauded. Now, with the launch of spot ETFs, Bitcoin has rallied violently, and the NFT industry Looking for ways to turn over a new leaf and reignite the fire of passion in our corner of the digital universe.
Startups are creating a renaissance in NFT applications in gaming, finance and art. They claim that hard lessons learned from the past will make their latest efforts more durable. They hope these NFTs are not just seen as only for the rich and wealthy. Expensive profile pictures of celebrities.
According to CryptoSlam, NFT sales nearly tripled from the previous month to $918 million in November before surpassing $1.7 billion in December. However, trading volumes fell 33% to $12 in January this year. billion, indicating that the recovery of NFTs may be complicated.
Skepticism about blockchain gaming, the uncharted territory surrounding financialized NFTs, and doubts about whether NFT art can return to sky-high sales all pose challenges for a troubled market.
"I think this desire for exclusivity is a huge mistake," said Luca Netz, CEO of NFT startup Pudgy Penguins. "What people really want is fans. They want collectability."
game
According to Netz, industry volatility is part of the reason why Pudgy Penguins developed a toy line inspired by the chubby cartoon birds in its popular NFT line. Pudgy Toys sold 750,000 units in seven months and hit $10 million in sales. Dollar.
"We need to create real revenue streams that are not affected by variables we have no control over," Netz said.
Each toy has a QR code that will take the owner to the Pudgy World online game, which is still being launched. Netz said he hopes to release a full version of the game in the next 12 to 18 months. The toys will contain NFTs. Features such as clothing for the player's penguin avatar can be sold within Pudgy World.
Like Pudgy Penguins, Bored Ape Yacht Club creator Yuga Labs is hoping to capitalize on the success of its still-popular PFP NFT in the gaming space.
During the cryptocurrency bull market, Yuga raised significant funding at a $4 billion valuation and embarked on a controversial token project, a partnership with Adidas AG, and a currently-suspended short film trilogy, former Yuga CEO Daniel In an interview with Bloomberg before his resignation, Alegre said the company had too much to do.
Yuga, which is focused on developing the BAYC-inspired Otherside game, failed in an NFT sale tied to the virtual land in its eponymous digital metaverse, with its trailer receiving mixed reviews from viewers.
Alegre declined to reveal an official release date for Otherside, which was originally slated to launch last year. "We were a little pressed for time," he said.
"Otherside is a huge transformation and we still have a lot of work to do," Yuga co-founder Greg Solano posted on X when he returned as CEO.
As Yuga and Pudgy Penguins work harder to push NFTs into the gaming space, which has seen varying degrees of success, one of the most well-known blockchain games, Axie Infinity, lost $600 million due to a 2022 hack and gameplay Criticized for not doing well.
Zollpa CEO Aaron Jacobson said the mistake many NFT projects make is focusing on making money rather than creating fun games.
"It's not a sustainable model where you do an initial coin offering or NFT minting and require all players to spend a lot of money up front before the game is released," he said.
Zollpa launched a public beta of a shooter called RoboSquad Revolution in November.
Finance and Art
Some startups are looking to use NFTs in the financial sector. Stephen Young, CEO of P2P lending platform NFTFi, said that the popularity of collectibles such as BAYC and Pudgy Penguins makes them good loan collateral. “The transaction volume of top blue-chip PFPs remains It’s huge,” he said.
NFTFi has closed more than 56,000 loans worth about $500 million since its launch in 2020, and Young said lenders decide how much they want to lend and set interest rates.
Framework Ventures co-founder Michael Anderson said he sees other financial uses for NFTs, noting that more companies are introducing tokens that represent real-world assets such as bonds, commodities or real estate.
"Even if we're talking about something like a Treasury bond, it has different maturities, different yields, different prices, so customized information needs to be stored on something that is inherently irreplaceable," he said.
But NFTs, including those related to finance, may be subject to regulatory scrutiny.
Sales of art NFTs in 2021, such as artist Beeple’s $69 million worth of digital works, are currently the best-performing category in a set of NFT indices created by Nansen that track the market performance of different types of NFTs, with the social category including PFP NFT.
Michael Bouhanna, head of digital art at Sotheby's, said the auction house has been selling NFTs since 2021 and continues to see interest in the tokens.
“Some artists have more technical backgrounds, and it’s very natural for them to use blockchain technology or some generative art programs in their creative process,” he said.
Sotheby's sales of NFTs and digital art exceeded $30 million last year, a 50% increase from 2022 but still less than half of Beeple's NFT sales in 2021.
In January, Sotheby's saw $1.6 million in sales of Ordinals, an NFT-like thing on the Bitcoin blockchain, while sales of digital art collected by bankrupt crypto hedge fund Three Arrows Capital also saw sales of $1.6 million. Over $1 million.
The optimism surrounding NFTs has been undermined by concerns that the cryptocurrency’s links to scandal and crime could hamper its further growth.
“They hear the word Web3 or NFT and immediately avoid the game and think it’s a scam,” said Zollpa’s Jacobson.
#NFT #BAYC #PudgyPenguins #Beeple
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