NFT Sales Are Down But Here Are 7 Reasons Why They Will Stay
NFTs shook up ownership in digital realm. Skeptics remain, PFP sales are down, but NFTs are not only expensive JPEGs. So here 7 reasons why tokenization via NFTs will be present in our daily lives.
Market Overview
First, an overview of the current NFT market (unfortunately essentially related to digital artworks). Source Olga Kharif’s article (NFT Sales Pick Up After Launch of Peer-to-Peer Lending Site)
The NFT market has seen a drop in sales of nearly 19% in April 2023.
NFT sales have climbed by 30% within the last seven days thanks to a lending program called Blend, released on May 1st.
Over the last two weeks in April, the number of active NFT wallets decreased significantly.
The trading volume on the NFT marketplace OpenSea was the lowest ever since June 2021.
Pricing pressure continues on NFTs, leading to a decline in their average sales price.
Many NFT projects have failed to engage with their communities.
The NFT market is not expected to see skyrocketing growth as in 2021.
Seven reasons why NFTs are here to stay
Although the market has plummeted following the crashes of FTX, Luna, and other Voyagers, Non-Fungible Tokens (NFTs) have taken the world by storm. From digital art to music albums, NFTs have revolutionized how we view ownership and exchange value in the virtual world. But with all the hype, some people are still skeptical about the longevity of NFTs. But I disagree. Let me explore with you seven reasons why NFTs are here to stay.
Unique ownership: NFTs provide a unique form of ownership for digital assets. Unlike physical assets, digital assets can be easily replicated, but NFTs provide a way to verify ownership and authenticity. This essential form of ownership will transform how we’ll interact, preserve, finance, distribute, store, etc., various physical possessions (houses, cars,…) and digital objects (videos, games, art, books, and music, etc.)
Digital scarcity: NFTs can be used to create digital scarcity, which can drive up the value of digital assets. This is because NFTs are one-of-a-kind, and there can only be one owner of the NFT. This scarcity can create demand and increase the chances for a future higher valuation. And thanks to Blockchain technologies, the scarcity can be verified and tracked.
Smart contracts: smart contracts are the programs that enable NFTs to exist on distributed ledgers. Smart contracts can automate various aspects of ownership, such as royalties, IP rights, and licensing. This automation can streamline the ownership process and make it easier for stakeholders and creators to track and monetize their creations.
Tokenization: this system of converting data into tokens unleashes endless possibilities to capture and store value. Assets too abstract like attention or too complex to track and monetize like royalties, are easily possible now. Tokenization can provide liquidity, fractionalization, cost efficiency, micropayment, etc. These are improvements and opportunities for individuals to participate in the ownership and exchange of digital assets.
Global access: NFTs can facilitate cross-border transactions without the need for intermediaries. This can make it easier for individuals in different parts of the world to buy and sell digital assets which also means an increase in accessibility, hence a higher possibility for wealth creation.
Transparency: NFTs provide transparency in ownership and transactions. This transparency can help prevent fraud, security and ensure that the correct individuals receive royalties and other compensation forms. However, this does not mean it won’t preserve users’ anonymity which will be protected by introducing ZK-proof technology.
Mainstream adoption: PFP was a fade although it prompted an introduction to digital identities and community belonging. However, NFTs have become more mainstream, with various industries and celebrities jumping on board. This mainstream adoption has helped solidify NFTs as a legitimate form of ownership and exchange.
Interoperability across platforms: Since these assets exist entirely digitally, they have far more flexibility than physical objects by enabling users to share this content through social media channels, etc., making ownership transfers easier regardless of where they end up hosting files long-term.
Conclusion
NFTs and more broadly Web3 will transform various industries and become a key part of our daily life, socially, professionally, and economically. As a compelling technology, NFTs will offer innovative solutions, replacing obsolete contracts and procedures. NFT will automate processes, reduce friction, increase time to market, and operate 24/7, globally and without needing a third party.
If you are curious and want to break into Web3 and NFT you can:
Research and learn about NFTs and their potential applications in various industries
Explore and evaluate
potential solutions that NFTs can offer to automate processes and reduce friction
Consider integrating NFT technology into your own business or enterprise
Invest in NFTs as a potential asset (or even PFP :) ) or financial opportunity.
And we can help you do so. Reach out to breakintoweb3@startuptoken.com