Would you believe that the image used in the header above is worth $91.8 million?
The picture you see above, The Merge by NFT artist Pak, sold fractionalized tokens (Crowd-funded) with a total of 28,983 collectors holding 312,686 units of the artwork.
NFTs, an abbreviation for “Non-fungible Tokens” has a market that surpassed $13 Billion in Trading Volume, in the year 2021 alone, according to the Block Crypto Data.
But what’s with all the hype that’s surrounding the NFT Market? Who is it for? And can you profit from it?
Numerous factors impacted the NFT market in 2021:-
Celebrities
Messi, Paris Hilton, Jimmy Fallon, Tom Brady, and even Ivanka Trump. Is there any celebrity that has not jumped the NFT market at this point? Some celebrities simply purchased their NFTs from the trending collections, but others took a step further and released their very own! One worthy instance was when Eminem sold one of his beats for $100,000.
Note: Celebrity involvement with NFTs came with scrutiny due to concerns of market manipulation and fraud.
Brands
Large brands and well-known companies have rushed into the NFT space. VISA purchased one of the 10,000 CryptoPunks, Luxury Fashion houses like Gucci and Burberry started offering digital wearables, and Adidas sold NFTs while giving owners access to exclusive merchandise.
Renowned Auction Houses
Art auction houses embraced what NFTs have to offer and even started accepting Cryptocurrencies as a payment. Sotheby’s, a 227-year-old auction house, amassed over $100 Million in NFT sales in the year 2021. While Christie’s, another renowned auction house sold $150 million worth of NFTs including Beeple’s record-breaking $69.3M NFT “Everydays the First 5,000 Days”.
GameFI (Play-to-earn Games)
The year 2021 lead to a lot of success in Blockchain applications, with decentralized finance being one of the hottest topics. Blockchain-based games, “GameFi”, which utilizes NFTs have accumulated more users than all other dApp categories which represent more than half of the dApps total userbase on the Blockchain.
Facebook Rebranding to Meta
Finally, owing to Facebook’s decision to rand to “Meta”, the value of projects building the Metaverse have soared. With the likes of The Sandbox, a platform where any user can create games and monetize through NFTs reaching a $7.5B Market Cap ath their peak.
A Utility, or a social status Symbol?
Beyond artworks, and apes which are used primarily as a status symbol, the underlying technology that NFTs use can be applied to many different fields. Each NFT issued, represents a unique representation of ownership, with the case of Artworks, the holder of said NFT can prove that he owns the legitimate creation. NFTs also take advantage of what Blockchain offers, security, privacy, and immutability leading to proof of ownership.
Gaming
Axie Infinity, a Pokémon-inspired game became popular in the past year. The game is based on trading and battling in-game creatures referred to as “Axies” which are based on NFT technology. The popularity of the game fueled the “play-to-earn” concept with numerous other games launching in the NFT space. On-chain data show that the active monthly users playing NFT based games reached over 5,000,000 in the month of January 2022 alone.
Music
In the traditional market, the music Industry is managed by an oligopoly of record labels and music streaming services that take a huge cut from Musical Artists. Non-fungible tokens are being adopted as a revenue stream for Musicians to independently monetize their work. Gemini’s NFT marketplace Nifty Gateway helped Elon Musk’s wife, Grimes sell around 6$ million worth of 10 exclusive digital artworks.
Social Media & Influencers
NFTs offer an additional source of income for influencers while allowing their fans to support them. Since the main appeal on NFTs to be counted as collectibles, one way that social media influencers are using to monetize their work is to create and sell these collectibles or collaborate with established NFT projects. A worthy example is Paris Hilton’s NFT collection which sold for over $1.1 Million!
Ticketing & Events
Event and festival organizers are always seeking out ways to enhance the customer experience, and ticketing is just one stage of the process. The ticketing industry is shared by an oligopoly that takes proceeds from sales and maintains user data. With NFT ticketing, the prevailing issues with centralized ticketing marketplaces are solved. Startups like, Oviet and Seatlab, are offering platforms to allow event organizers to issue NFT tickets which are redeemable to access events and also can be collected as unique artwork.
Real Estate
The process of real estate purchasing is still time-consuming and costly due to the old-fashioned procedures handled by the relevant entities. To purchase a property in the City of Dubai, one has to go through an agent, head to the land department registry, and sign loads of paperwork. This process takes at least a week, and even longer if the buyer opted for home financing. NFTs can work as a single identifier to homeownership, which can be transferred between buyer and sellers, all under the management of the relevant authorities. iOWN is exploring the possibility of utilizing NFTs to bridge real-world assets like real estate and equity ownerships to be traded with digital assets.