Over $480 million worth of non-fungible tokens (NFTs) were traded in the past 30 days, according to a report by Axios on February 21. This figure shows that despite declining from its peak, the NFT market remains attractive for investors looking to make a profit.
NFTs are digital tokens that represent real-world items like artwork and music and provide indomitable proof of ownership and exclusive rights to the holder. The ability of content creators to market their NFTs and trade them freely had fuelled the rapid rise of NFTs as valuables.
Many young and ambitious investors are still interested in the asset class. The emergence of new marketplaces such as Blur, which cater to traders looking to buy or sell multiple NFTs from a single collection at once, could help revitalise the market and attract more investors.
Moneycontrol spoke to industry experts for their views on the NFT market.
NFTs have the power to authenticate and verify digital assets, say experts
According to Guneet Kaur, a digital assets researcher at the University of Stirling in Scotland, NFTs have the power to authenticate and verify digital assets, unlocking untapped revenue streams and establishing new paradigms of value. However, there is still a gap between potential use-cases of NFTs and their current usage, according to Kaur.
NFTs have strong growth potential, will change industries, says developer
Aliasgar Merchant, a developer relations engineer at Informal Systems, said NFTs have strong growth potential and will change different industries, but their true power will be unlocked when they are used in applications like DeFi (decentralised finance), supply chains, and logistics.
NFTs remain gigantic untapped application, says Online Blockchain CEO
Despite the decline in NFT trading from billions of dollars to millions, Clem Chambers, CEO of Online Blockchain plc, said they remain a gigantic untapped application, with the opportunity to create new genres of use-cases and streaming, and remove all kinds of legacy processes. According to Chambers, NFTs touch a new generation, an intrinsically art-loving generation, and digital art is their natural artistic format.
Riccardo Pellegrini, cofounder and CEO of Web3 Builders, suggested that NFTs will rebound once they become safe and secure enough to make their use-cases mainstream. Pellegrini said NFTs have the potential to provide an extra layer of security for physical and digital assets, and when their adoption picks up, they will rally to previous levels.
Bob Juburi, cofounder of The Quest of Evolution, a decentralised multimedia collaboration, said the early NFT market was founded on the simplest use-cases, namely PFPs (profile pictures), and what remains now are innovative projects that possess immense utility and significance for both creators and consumers.
NFTs looking for purpose beyond JPEGs, says peaq cofounder
Max Thake, cofounder at peaq, said NFTs are not dead, just looking for a purpose. While the market was largely down in 2022, talented teams kept experimenting with use-cases for the technology that would push it beyond JPEGs, an image compression format.
Thake suggests that the focus is moving toward bringing the promise of decentralised ownership of unique assets to life with more user value in mind.
Genuine supporters of NFTs here to stay
Andy Treys, the founder of Cereal Club, said those who truly support NFTs, including collectors, creators, and companies, are here to stay. The ones who are not genuine are being removed, and it's time to see who truly believes in the long-term value of NFTs.
“NFTs have the potential to generate high returns for investors, which will always be appealing. And there will always be an appetite for crypto collectibles, with NFTs representing unique digital assets that can represent anything from artwork to music to video game items,” according to Treys.
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