A deep dive into the development of NFTs and the opportunities to integrate other sectors

• NFTs recorded comeback sales of over $25 million in 2021.
• NFTs are being integrated with the gaming industry and virtual reality (VR)

Non-fungible tokens (NFTs) may have become popular as blockchain-based JPEGs, but there’s more to it than meets the eye. In fact, one of the earliest NFT innovations ‘Crypto Kitties’ was launched as a game to monetize the Ethereum blockchain. While the development of NFT projects seemed to have slowed down between 2017 and 2020, it is a blur that the 2021 comeback took the tech industry by storm; NFTs recorded over 25 million dollars in sales.

So, what brought NFTs to the limelight? As much as there are several factors that have driven NFTs to rise to fame, Beeple’s $69.3 million digital collection sale was certainly a pivotal moment. Longtime digital artist ‘Mike Winkelmann’ made headlines in February 2021 when his collection, Everyday’s – The First 5000 Days, was ranked among the three most valuable sales at Christie’s auction.

After Beeple’s milestone, the NFT ecosystem has become a hive of activity, with sports personalities and celebrities joining the bandwagon. The launch of limited JPEG NFT collections such as CryptoPunks and Bored Ape Yacht Club (BAYC) gave even more meaning to this futuristic niche market. Today, both collections have a floor price of over 60 ETH, which is quite a high number for the average crypto investor.

What’s more fascinating is that NFTs are now scaling beyond the JPEG narrative, marketplaces like NBA Top Shot have introduced a whole new world; users can collect special basketball moments and trade them as digital collections. At the moment, the most expensive memorabilia on this platform is a Lebron James dunk, whose asking price is almost half a million US dollars.

“At The Boardroom, we’ve also been at the forefront of the NFT space, and I’m excited to partner to advance NFTs further into the mainstream, creating and curating exclusive moments and content with Top Shot,” said Brooklyn Nets Kevin Durant at the closing of a collaboration with Dapper Labs.

NFT Games and Metaverse

In addition to JPEGs and short video collections, NFTs are being integrated with the gaming industry and virtual reality (VR). The latest statistics from Dapp Radar revealed that blockchain games accounted for 52% of DApp usage in 2021, most of these projects are NFT oriented. For example, Axie enjoys the Infinity game over 4 billion dollars in total sales, having gained traction as a passive income source in developing economies such as the Philippines.

One may then wonder how exactly NFTs add value to the gaming ecosystem; Simply put, NFT games introduce an aspect of monetization. Players not only have the opportunity to increase their skills by acquiring in-game items such as weapons and advanced skins, but can also trade these collectibles on NFT marketplaces such as Opensea and Rarible. It’s like killing two birds with one stone – enjoying the game while earning some extra coins.

In the metaverse, otherwise known as the virtual world, NFTs are a primary tool in their development. They serve as the basic building blocks of Web 3.0 ecosystems such as Decentraland and The Sandbox. Ideally, virtual land parcels and other infrastructure facilities on these two metaverse platforms are represented on the blockchain as unique NFTs. This means that you can trade your piece of land as a digital collector’s item on available marketplaces.

At the time of writing is floor price lands on Decentraland and The Sandbox are 1.5 ETH and 0.96 ETH respectively. While some stakeholders believe that Metaverse is overhyped, big tech seems to have a different opinion. Both Meta and Microsoft have expressed interest in the metaverse, with the latter’s CEO Satya Nadella hailing the potential of investing in the development of virtual worlds.

“When we talk about the metaverse, we describe both a new platform and a new type of application, similar to how we talked about the web and websites in the early 90s. It’s no longer just playing a game with friends. You can be in the game with them.” – Satya Nadella.

Scaling the NFT potential

Looking at the progress of the NFT industry, it is clear that the untapped potential is huge. Games and art have proven that NFTs do indeed have a place in tomorrow’s digital ecosystem, one where users will be able to prove authentic ownership of real assets on the blockchain. That brings us to an important question; what other sectors are following the NFT path and may balloon in the near future?

1. Film and TV production

In its current state, the film and television production industry relies heavily on investment from big brands or high net worth individuals. NFTs are changing this narrative by creating a way for content creators to raise funding through blockchain ecosystems. For example Looking Glass Labs (LGL) Web 3.0 platform recently launched an exciting sci-fi live-action series ‘GenZeroes’. This production is supported by fans who purchase or receive an airdrop of their Genesis NFT collection.

Some of the added benefits of joining the GenZeroes community include exclusive access to watch the sci-fi series and behind-the-scenes content. Furthermore, the fans who hold these NFTs will have an opportunity to vote on plot developments over time. While it may seem like an uphill task to build a fan base, LGL’s groundbreaking NFT collection sold out in 37 minutes, bringing in a total of CAD 6.2 million.

2. Fantasy Sports

Fantasy sports is another industry that could benefit significantly from NFT integration. In the United States alone, the fantasy sports market is valued at $8.8 billion, with an estimated 45.9 million people engaging in the game. The value proposition of NFTs in this ecosystem is quite simple, they increase the opportunities to monetize their skills through decentralized digital collector marketplaces.

For this purpose, there are upcoming Web 3.0 platforms such as Motherboard which recently launched its main network. Unlike the typical fantasy sports websites, Maincard’s NFT-powered ecosystem allows players to purchase NFTs and use them to post sports predictions. In return, players are rewarded with a native token called ‘MainCoin’ for every correct fantasy bet. But more interestingly, it will be possible to liquidate MainCoin tokens as they are planned to be listed on multiple exchanges in Q1 2023.

Conclusion

As highlighted in this article, NFTs could be the next big thing in several industries. The idea is far much bigger than play-for-earn ecosystems, digital identities can also be integrated with the NFT architecture. However, there is still a long way to go before stakeholders from the private and public sectors can adopt NFTs. Innovators need to fix several issues such as interoperability and overall reliability of existing blockchain networks. This is the only way the NFT trickle effect can be experienced across the board.