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How NFTs are Rapidly Becoming The New Crypto Trend

Wed, 05/11/2022 - 10:30
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Heewon Jang
NFT's meteoric rise in value has ignited a frenzy among crypto enthusiasts
How NFTs are Rapidly Becoming The New Crypto Trend
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The meteoric rise in the value of Non-Fungible Tokens has sparked the interest of everyone in crypto space. Now, everyone wants to know what they are, what they can do, and how they can plug into the NFT space to tap from the honey pot. 

Non-Fungible Tokens were initially created from the synthesis of blockchain technology and digital files. NFTs are unique cryptographic tokens that offer unique, indestructible proof of ownership. They can digitally represent real-world items like a digital artwork, piece of music, trading cards, real-estate and more. And these digital goods can be purchased with crypto money.

According to statistics, the NFT market tripled in 2020, with the total value of transactions increasing by 299% year on year to more than 250 million dollars. All-time sales are estimated at $534m, with the average price of one NFT at $97. The profitability of Non-Fungible Tokens have captured the attention of celebrities and big companies, resulting in its rapid explosion across the worlds of music, art, games, sports and more. For example, famous celebrities like Jimmy Fallon, Stephen Curry, and Paris Hilton are already contributing to the buzz by purchasing one Bored Ape Yacht Club NFT each. This way, NFT enthusiasts compete to get a piece of this digital asset just to be part of the same group as these celebrities. 

Although NFTs have been around since May 3rd, 2014, when the first NFT artist, Kevin McCoy, minted the first NFT known as Quantum, NFTs started gaining mainstream attention in 2021. It took one massive NFT sale in the Q1 of 2021 to capture everyone’s attention to the hidden gold mine that NFTs could be. 

The NFT Explosion

The year 2021 was perhaps the most critical year for the NFT space so far. 

In the Q1 of 2020, the NFT market was valued at $250 million. But by the end of the first quarter of 2021, the market was estimated at $1.5 billion, making a growth leap of 2,627%. The global NFT transactions surged to $10.7 billion in the Q3 of 2021, more than eightfold in quarterly trading volumes between Q2 and Q3. Much of this success can be linked to Axie Infinity – a P2E Vietnamese video game that became the most valuable NFT collection across the world in August 2021. 

Notably, it took the sale of Everydays: The First 5000 Days by Beeple (formally known as Mike Winkelmann), in March, 2021, for NFTs to gain global recognition and popularity. Beeple sold for over $69 million after a Christie’s auction, which was viewed by 22 million people.

In October 2021, the Larvalabs creation, CryptoPunk #9998 sold for a staggering $532 million. These rare NFTs have become extremely popular as they account for one of the largest NFT sales. Now, CryptoPunks are popular for selling for millions of dollars in some cases. 

Even tweets have become assets. Recently, Jack Dorsey – the co-founder and former CEO of Twitter, tweeted a link to a tokenized version of the first tweet ever, in which he wrote: "just setting up my twttr." The NFT version sold for more than $2.9 million. 

Buying and selling fractionalized NFTs of real-world artwork by renowned painters seems to be the new trend in 2022, thus making it possible for people to invest in high-value crypto assets for a fraction of the cost.

On the other hand, a considerable percentage of the current market for NFTs is focused around collectibles, like digital artwork, sports cards, and rarities. Enthusiasts say they're the key to unlocking the next generation of the internet, often called the metaverse or Web3.

It's no news that Non-fungible tokens are steadying after a sudden drop earlier this year as trade volumes gain traction amidst the introduction of new products and initiatives that have stimulated enthusiasm in the market. Nevertheless, the market is bouncing back, with weekly volume now more than 32% from a low in March.

Today, the NFT market is valued at more than 40 billion dollars and is estimated to exceed $80 billion by 2025 and hit $3.5 trillion by 2030. Statistically, it’s crystal clear that NFTs have the significant potential for growth beyond these expectations. 

NFTs can be accessed by a global community from a range of global NFT marketplaces that charge a reduced or no fee which allow artist/creators to make more profit, unlike the conventional exchange of art where galleries and agents take a significant share of the artists profits. People don’t just want better tools to trade NFTs: they want better ways to discover them, and seamlessly find the right communities. 

NFT Marketplaces 

NFT marketplaces such as Opensea, Nifty Gateway, and more, are digital markets where artworks, collectibles or game items, plots of land in metaverse projects, and apartments are traded. By utilizing NFT marketplaces, crypto enthusiasts can seamlessly acquire unique and rare assets, as well as trade them on the platform. However, despite the growing excitement for these platforms, many problems continue to plague existing marketplaces, thus threatening the growth of the market.

Some of these problems include no regulated environment, high transaction fee, lack of security, bad carbon footprint and no user-friendly multi-chain solution. Hence, the urgent need for fully regulated marketplaces where people can trade their NFTs in a simple, compliant and eco-friendly way. Today various NFT projects such as Moon.Art, have surfaced to address the issues of existing marketplaces.

Moon.Art proposes a fully regulated digital marketplace where all NFTs can be traded. It’s on track to build the world's first NFT marketplace that’s eco-friendly, community driven and complies with the highest regulatory standards.

A common problem across various NFT marketplaces is the lack of a regulated environment. This problem stimulates money laundering, fraud, and other illicit activities on the platform. Many NFT marketplaces are struggling with the excessive sales of unauthorized copies of other NFTs, minting of stolen content, and selling NFT sets that are very similar to security. Moon.Art implements complete Know Your Customer (KYC) and Anti Money Laundering (AML) mechanisms to protect users of the platform from illicit activities. This way, users can not lose their money or access to their digital assets.

Not just that, Moon.Art also addresses the issue of high transaction costs, which tend to discourage new users. It requires users to pay only a 2% commission on the sale of their NFTs. To further incentivize users, the platform offers huge discounts for its keycard holders. The Keycards guarantee a 50% discount on transaction fees on the marketplace and an additional 5% reduction for each extra keycard that a user holds. Plus, holders get a share 50% of the income that the platform generates from trading fees.

Since NFTs make use of energy-intensive computer transactions to authenticate and sell the digital property, the environmental impact of NFTs can result in a bad carbon footprint. The Moon.Art marketplace balances carbon dioxide emissions of the platform with carbon offsets, thus ensuring a good carbon footprint.

Experts also propose that the NFT marketplace should become more accessible for everyday investors in order to facilitate global NFT adoption. Thus, the mission of NFT marketplaces such as Moon.Art NFT is to reshape the NFT space by creating a simple, compliant and eco-friendly marketplace for all users to trade NFTs.

Recently, celebrities, famous fashion brand owners, and large companies including Twitter, Meta (formerly Facebook) and more, have also become interested in NFT and metaverse projects and they have started establishing strategic partnerships with several projects. These groundbreaking projects will provide the opportunity for people to create value, create events, fund art, and also build communities. 

Final Thoughts

As NFTs become more mainstream, there's an influx of creators, investors and enthusiasts alike, looking to jump on the bandwagon. Part of what makes the NFT space so appealing is that it is always providing new approaches and solutions. There is an exciting possibility for developments and creation of new markets and forms of investments like Real estate trading, that help to broaden the reach of NFTs and, in the process, bring more people on board.

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About the author

Heewon Jang is a freelance journalist and the editor of CryptoGags section.
She is responsible for entertaining crypto content and bitcoin humour