Since the beginning of the year, the monthly trading volume of NFTs has not escaped the downward trend and has fallen by 97%. After hitting a record high of $17 billion in January, it had jumped to $466 million by the end of September, according to data from Dune Analytics. The decline in NFT volume comes in a general downward trend across the entire crypto market, which has seen $2 trillion in capitalization evaporate since the beginning of the year.
While some see NFTs as a major technology revolution coming, others see it as a passing fad. When the NFTs of certain collections have been resold for several million dollars, many people don’t understand why some pay huge amounts for an image that they can simply store on their computer.
Source : https://dune.com/hildobby/NFTs
But what is it? What does an NFT correspond to and does it serve?
What is an NFT
NFT means non-fungible token in French. Unlike a replaceable good such as bitcoin, gold or a 5 euro note which will always have the same value, a non-exchangeable good such as a work of art, real estate, a collector’s card or a jewel is unique and its value will depend on the assessment by the buyer.
NFTs are therefore non-functioning assets that use the blockchain and precisely smart contracts to guarantee the authenticity of a work and a title deed. It is a revolution because it is based on the blockchain, this type of asset can be easily resold, in a decentralized way and in a completely transparent way, because the transactions are traceable on this technology.
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What are the Different Types of NFTs?
If you’re still struggling to understand how this technology could be revolutionary, here are eight areas where NFTs can be an undeniable growth accelerator for creators and brands alike:
- Art and Music: This is the most classic form of NFT today. An artist can decide to broadcast his work digitally, by selling his paintings or his music pieces directly to his fans via the blockchain.
- Video games and metaverse: This is probably the market where NFTs will have the biggest impact. If you play video games, you are probably already familiar with buying skins and accessories for your characters. NFTs allow you to resell them to another person when you decide to stop playing the games or change your style.
- Trading Cards: You play Magics of Yu-Gi-Oh! ? Do you collect Pokemon cards or Panini cards? Imagine being able to do all this digitally and make sure you can trace everything on the blockchain? With NFTs it is possible.
- Certification of diplomas/driver’s licenses: The technology used by NFTs can also be used by schools or administrations to certify and guarantee the authenticity of certain documents.
- Domain names: for several years now it has also been possible to register your domain name directly on the blockchain of your choice.
- Event Tickets: In addition to attending a festival, imagine being able to hold an NFT that gives you access to the event and other exclusive benefits.
- Loyalty Program: NFTs are also a great way to build customer loyalty. By offering NFTs that certify a consumer’s loyalty, brands have a new tool to create and maintain a community.
- Soulbound Tokens, or Decentralized Identity: Proposed in May 2022 by Vitalik Buterin, soulbound tokens are non-replaceable, non-tradable tokens that represent your “digital soul”. Still in concept phase, this technology could be the next big evolution in the world of NFTs.
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Brands and Artists Who Love NFT
With all these use cases and a potential multi-billion dollar market, it’s no surprise that more and more brands and artists are getting into NFT. This is one of the main reasons that has contributed to the rapid development of this technology in recent years.
Among the brands that have set foot in NFTs, we find:
- sporty ones, such as Nike buying the RTFKT studio in December 2021 and Adidas with its “Into the Metaverse” collection which raised $23.5 million in a few hours;
- luxury, with Dolce Gabbana or LVMH launching 250 NFTs through Tiffany;
- beverage and food brands such as Coca-Cola, McDonald’s, Pepsi or Starbucks;
- video game publishers, such as Epic Games or Ubisoft
Many artists around the world also seem to be seduced by the concept of NFTs. Whether in France with Booba or Sofiane Pamart, or in the United States with Snoop Dogg and Steve Aoki to name a few, many artists use this technology to strengthen their bond with their communities and generate additional income. .
How to buy an NFT?
Several blockchains have seen dedicated NFT marketplaces emerge on their technology infrastructure. The two main ones are Opensea on Ethereum or MagicEden on Solana, but today there are about ten different marketplaces.
To buy an NFT in the secondary market, all you need to do is go to an NFT marketplace, connect your crypto wallet like Metamask or Phantom and then choose the project you want to buy.
If you do not want to buy on the secondary market, but want to be one of the first NFT holders of a project, you should follow the news of the said project on social networks to know the official date of the “coin”. Currency is a term used by the industry to advertise the launch and creation of NFTs. This is when NFTs are stored on the blockchain forever.
You can also get an allocation for a collection of NFTs by directly purchasing the digital token supported by the project. This method gives you exposure to this type of asset and allows you to benefit from a more liquid investment.
Remember that anyone can create NFTs. Even if you don’t code the contract yourself, you can easily upload your images, videos or other files to marketplaces like Opensea to put them up for sale.
Today there are thousands of NFT projects. It is therefore difficult to be able to follow them all without getting lost. As with the Beurs, there are interesting projects that you can consider in more detail. For example, if you are interested in “blue chip” NFTs, which have already reached several million dollars in volume and have a strong community, you can check out projects like Bored Ape, Crypto Punks or Clone X. If you prefer collectible cards in the form of NFT, several projects exist: football fans can get their hands on Sorare, basketball enthusiasts on NBA Topshot and fans of strategy games on Cross The Ages.
On the other hand, if you want to take your first steps in metaverses, it is possible to buy virtual land in the form of NFT in games like The Sandbox or Decentraland. Or you can try earning rewards with Play to Earn games like Axie Infinity or Aurory.
If you haven’t found what you’re looking for among all these categories, you can turn to more atypical projects like Stepn, which allow you to earn rewards in the form of tokens while walking or running, or register your own domain name on ethereum with ENS domain.
While NFTs are likely to play a vital role in the future and grow more and more in our daily lives, the euphoria of 2021 is long gone and projects often remain illiquid despite the headlines. Before buying your first NFT, ask yourself if this type of asset fits your investor profile, be careful and always do your own research on the project behind it and the team behind it.
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