The popularity of NFT-based marketplaces has grown significantly over the past year. Many world-famous brands are striving to gain an advantage by designing their own NFTs. For instance, in December 2021, Adidas introduced a collection of 30,000 NFTs. Well-known companies, such as Nike, Ubisoft, Axie Infinity, Coca Cola, Pepsi, Clinique, and Gucci have already released their own NFTs.
But first, what is NFT or non-fungible tokens?
NFT or Non-Fungible Tokens are cryptographic assets that are created on blockchain technology, and have unique identification codes and meta-data, which makes them distinguishable, distinct, and completely unique.
It’s a bit similar to bitcoin in nature and other cryptocurrencies, with a key difference: while every bitcoin created can be exchanged for one another at equal values, these don’t. As the name suggests, non-fungible tokens are meant to be unique. The tokens act as virtual deeds, conveying ownership of a digital asset. Each one gets uploaded to a digital ledger where it conveys key information: the date it was created, when it was sold, for how much and to whom.
When NFT is bought, its corresponding blockchain keeps a record of the transactions. While anyone can view the NFTs, the buyer has the status of being the official owner.
What Is NFT Marketplace?
NFTs can be traded with other NFTs or sold/bought via the NFT marketplace, which is a decentralized platform.
NFT marketplace is like an eCommerce platform, however has numerous different features and types, which makes them quite distinct from them: a special transaction protocol called smart contracts is used in every NFT marketplace that regulates, monitors, and approves the transactions between the buyer and the seller.
Traded since around 2017, NFTs have surged in 2021: there were around 15,000 to 50,000 NFTs being bought and sold every week, and in the first half of 2021, approximately $2.5 billion worth of NFTs were traded, across the world.
The NFT market and business model are exploding at an amazing pace and NFT marketplaces are giving rise to the NFT Business Model, where unique non-fungible tokens related to art, video, audio, and other types are bought and sold.
Gaming and NFT
The tokenization of gaming is among the main NFT market trends for 2022. In the new digital environment powered by blockchain, gamers can buy assets like virtual land, characters, access to rare communities, clothes and weapons for avatars in the form of NFTs.
Metaverses became famous in the mainstream since the tech giant Meta (formerly Facebook) announced its plans to delve into the virtual world. Metaverse is a universe of interconnected virtual worlds and NFTs, cryptocurrencies, and blockchain are anticipated to facilitate barriers for entering the metaverse and with its development, the role of NFTs will increase simultaneously.
Arts and music
NFT marketplaces address intellectual property issues. Currently, content makers often have to waive their rights to companies or audio streaming platforms. With the new technology, it is possible to release songs, lyrics, digital assets, art pieces as NFTs.
Containing a record of ownership in their metadata, NFTs allow artists and musicians to save their intellectual property rights. When a customer buys an NFT and then decides to resell it, the original creator can receive royalties from secondary and subsequent purchases. This way, NFTs can provide artists with more fair compensation.
Physical Asset NFT Marketplace
During the initial NFT boom, it was speculated that incorporating NFTs into physical assets would be a game-changer in many sectors, for instance, in real estate. Access to high-end, unique, and in-demand properties can be converted into non-fungible tokens.
In this case, the NFT marketplace can function like a stock market, and allow the users to buy/sell specific NFTs via trading. In some of the advanced and regulated NFT marketplace, such transactions can also have legal validity, like in real estate.
Redeemable NFT Marketplace
It has been a high run for NFTs, and brands have been researching ways to get into the gala of these unique tokens. One option for most brands has been redeemable NFTs, which can be exchanged for a physical product in the brand’s outlet. The NFT of the product then can either be destroyed or become a collectible, and most brands prefer the latter to be spoken about in the virtual world for a long time.
Representing a new kind of digital art, entertainment and even fashion, NFTs are witnessing rapid growth and in 2022 and beyond, the popularity of non-fungible tokens will continue to increase.
If you want to launch an NFT-related project, don’t hesitate to contact me directly!