Kseniia is the Chief Content Officer of Coinspeaker, holding this position since 2018. Now she is very passionate about cryptocurrencies and everything connected with it, so she tries to ensure that all the content presented on Coinspeaker reaches the reader in an understandable and attractive way. Kseniia is always open to suggestions and comments, so feel free to contact her for any questions regarding her duties.
Non-fungible tokens (NFTs) have gained significant popularity within the past few months. This upcoming cryptocurrency niche is attracting native industry participants, the creative community and the gaming industry, amongst others.
The NFT market peaked at the beginning of 2021, with popular sales like Beeple’s artwork fetching over $69 million. According to DAppRadar, this market recorded $1.5 billion in trading volume within the first quarter of 2021, marking a 2,727% rise compared to the previous year. While activity slowed down in Q2, NFTs are back with a bang, with the last week of July recording the highest weekly volumes at $339 million.
This latest surge in NFT interest has been driven by large sales of mainstream NFT collectibles, including CryptoPunks, Bored Ape Yacht Club (BAYC and the Axie Infinity game. The latter is an NFT-based gaming ecosystem that operates similarly to CryptoKitties, allowing the gamers to create value in a virtual-based world or metaverse. This play-to-earn Ethereum-built game facilitated $875 million worth of NFT transactions within the last month.
The Rise of NFTs in Crypto
Currently valued at $1.6 trillion, the crypto market features multiple segments that contribute to this market capitalization. NFTs are the latest kid on the block, accounting for 1.1% of the total crypto market cap as of press time. While the figure may seem insignificant, stakeholders cannot underestimate the potential of NFTs.
This market came to life in late 2020, with projects like the NBA Top shot paving the way for more NFT innovations. NBA Top shot introduced an NFT ecosystem where participants could tokenize basketball moments such as best dunks and 3-pointers by storing them as NFTs. However, the hype on top shot moments did not last for long.
The beginning of 2021 marked a new paradigm for the NFT market as innovators minted digital collectibles. Some popular digital collectibles that made a hallmark debut earlier in the year include cryptopunks and hashmasks. The former is still making headlines, with the average price of a cryptopunk rising by over 53% towards the end of July.
Meanwhile, upcoming NFT projects will likely revolutionize the industry as more people realize the value proposition. In the next section of this article, we will feature some of the prospective action drivers in the NFT marketplace.
The NFT Marketplace in Action
For the NFT ecosystem to function effectively, several platforms have come up to support minting, auctions and access to other crypto facilities such as Decentralized Finance (DeFi). Some prominent players providing solutions to the NFT space include Enjin, Hoard Marketplace, and Bluzelle. Each of these projects has its value proposition:
Founded back in 2009, Enjin started as a social gaming community platform that would later attract over 20 million users across 250,000 gaming communities. The project’s co-founders Maxim Blagov (CEO) and Witek Radomski (CTO), pivoted to blockchain technology in 2017 on the realization of a major intersection between the metaverse and blockchain technology.
Today, Enjin hosts a complete NFT ecosystem that allows users to mint digital collectibles such as in-game items backed by the ENJ token. In addition, this NFT ecosystem features QR code functionalities that enable users to mint or distribute NFTs seamlessly. Ideally, the Enjin NFT ecosystem provides individuals and businesses with an opportunity to acquire, use, manage and convert high-value NFTs to real money.
Hoard is an NFT marketplace designed to facilitate the buying and selling of NFT tokens. With Hoard, NFT owners can put up their tokens as collateral to borrow a stablecoin loan from the marketplace. Meanwhile, lenders can earn interest for giving out loans or receive the NFT placed as collateral in the event of a foreclosure. Hoard also recently launched a flash loan feature that allows users to create composable NFT (bundles) that contain other tokens.
The Hoard ecosystem is powered by its native token ‘HRD’, which is listed on Estonia-based P2PB2B exchange and decentralized exchanges (DEXs) such as uniswap. HRD token holders can stake their tokens to support network operations in return for compensation. Users can also generate more revenue by providing liquidity for the HRD token on DEXs.
Bluzelle’s approach to the NFT niche is focused on creating a cost-effective data storage model for DApp developers. As it stands, the cost of storing data on-chain is pretty high, with networks like Ethereum charging close to $150,000 to store 100 GB of data. Bluzelle will change this narrative with its byzantine-powered and fault-tolerant cluster of blockchains that are designed for database operations.
Based on a proof-of-stake (PoS) consensus, Bluzelle leverages this algorithm to incentivize validators whose function is to provide data storage and validate the authenticity of on-chain records. Essentially, this platform creates an environment where users can offer their idle space while staking BLZ tokens to validate recorded data. Set for debut in mid-August, Bluzelle will offer DApp and NFT developers an opportunity to escape the pains of centralized data storage facilities.
The Future of the Metaverse
NFTs have already positioned themselves as the future of virtual worlds, complementing the ongoing work in virtual reality (VR) and gaming. This class of crypto assets is gradually becoming a fundamental part of the metaverse concept where users collectively share virtual worlds. This can be seen in vibrant ecosystems such as the Axie infinity game and decentraland, a 3D virtual reality platform built on the Ethereum blockchain.
Going by the trends, it is not surprising that billionaires like Mavericks owner Mark Cuban are also interested in NFTs. The billionaire recently noted that Mavericks is trying to find good options to turn their tickets into NFTs:
“We want to be able to find ways so that not only can our consumers, our fans, buy tickets and resell them, but we continue to make a royalty on them.”
That said, we are still in the early stages of NFT innovation, which means the coming months will likely be eventful for this space.