NFTs (non-fungible tokens) – or rare digital content represented as tokens – are driving a new wave of crypto adoption.
Thanks to the Ethereum blockchain, artists, game companies and content creators use token standards, which assign provenance to unique assets. NFT made headlines in 2017 during Dapper Labs game CryptoKitties accounted for 95% of Ethereum network usage at its peak. While someone paying $ 170,000 for a digital chat seemed like an anomaly, what is happening today is blowing that title out of the water.
Platforms such as Nifty Gateway, SuperRare, Foundation and Zora are rapidly emerging as the main players for creatives to monetize work in a digital world.
The estimated total value of crypto art has now exceeded $ 100 million according to cryptoart.io/data – just a vertical of a growing NFT ecosystem.
Just as we’ve seen an alternate form of asset class around physical collectibles like Pokémon cards, NFTs are starting to show what this universe of rare and iconic brands looks like online.
NBA Top Shot has seen nearly $ 10 million in 24-hour volume according to CryptoSlam, with over $ 100 million worth of “moments” sold in less than a year of life. The parent company behind NBA Top Shot, Dapper Labs, has reportedly raised a $ 250 million round for a $ 2 billion valuation, as reported by The block.
Niche collectibles like CryptoPunks – or 10,000 unique collectible characters with rare traits and qualities – now have a base floor of around $ 18,000 a coin. Most recently, the Punk 4156 sold for 650 ETH, or around $ 1.3 million at current prices.
Paradigms of cryptographic art
Graphic designs and 3D designers are finding new platforms to showcase their work, with marketplaces like Nifty Gateway facilitating Supreme-style drops for exclusive digital art.
Mad Dog Jones recently set a record for $ 3.9 million of art sold in a single sale, surpassing the previous record held by beeple for its $ 3.5 million drop in “Everydays 2020 Collection”. No wonder the biggest art galleries like Christies are asking to team up.
With Bitcoin and Etherium hitting all-time high prices and investors looking for new places to allocate capital, the crypto art movement has empowered the creatives.
Vibrant collector communities like FlamingoDAO are forming around these drops, while protocols like Zora are quickly starting to support NFTs from all verticals.
Musicians like Mike Shinoda of Linkin Park and Fort Minor have released NFTs as part of their strategy for his new single “Happy Endings” with pop star Iann Dior. DJ and producer EDM 3LAU marks his debut album “Ultraviolet” and the Grammy-winning musician RAC broke the SuperRare record for the highest NFT primary sale with his track “Elephant Dreams”.
I even sold a blog post for 2 ETH (roughly $ 4000) using a crypto-media post called Mirror!
Why should I care?
NFTs have exhibited a creative side to crypto that is not only fun to play, but digestible and accessible to new users. As the biggest names host their first NFT drops, they bring a new wave of attention to their millions of subscribers noticing crypto for the first time.
This leaves people in a unique position to organize and experience this growing wave of rare digital content. Showtime bundles NFTs together to deliver an Instagram-like experience, and the upcoming NFT music market catalog is creating a digital record store.
As the Nifty Gateway scraps continue to sell out in seconds through credit card payments and free transactions, new collectors are finding ways to collect their favorite artists and brands – a trend that is expected to take better shape over the course of the year. the next few years.
Areas for improvement
Although the sales figures show a clear demand for NFTs, it is not without hiccups.
The vast majority of NFT platforms today require users to familiarize themselves with Ethereum wallets such as MetaMask. This means that collectors have to buy ETH from an exchange like Coinbase and send it to a non-custodial address which consists of a long string of numbers and letters to begin with.
Once there, they have to pay over $ 100 in fees to complete a transaction and place a bid. The same goes for artists who create NFTs, which brings up community funds like MintFund and cover the operational costs of launching their first NFT.
Fortunately, platforms like Audius are tackling these issues head-on. With 2 million monthly active users – the best of all Ethereum apps today – Audius replaced MetaMask with an email and password login wallet called Hedgehog. By removing key management and transaction costs, users can access the wonderful world of crypto without significant start-up costs.
What is happening in the NFT ecosystem today is nothing less than a paradigm shift for a maturing cryptocurrency industry. As avid collectors frame their digital art with the help of companies like Infinite Objects, there’s no denying that the vast majority of buyers are here to speculate. This increased demand signals interest, but is strongly reminiscent of the ICO boom of 2017 that caused the market to collapse many years ago.
However, out of this multi-year bear market has sprung a strong wave of companies and fundamentals like Uniswap and Compound that are here to stay. It is this writer’s bet that the same will happen with NFTs.
Until then, remember that digital content has value, and cryptocurrency collectors flock to land their namesake on the biggest collections of tomorrow.