NFTs: Their promise to Cryptoverse and what’s in it for you
Think you have seen it all with the emerging non-fungible token (or NFT) space? Well, think again. From arts to sports, and even bonds, there is still a little more to know about these unique digital assets stored on immutable blockchain technology.
Let this stick though: rights and ownership have never been so disrupted by any technology like this.
It’s a first that the blockchain system can enable NFTs to represent proof of ownership. This is the seemingly basic statement that is actually the big deal: blockchain’s ability to ensure that each NFT is authentic makes it golden. And more people are now realizing it.
The new form of digital ownership is fuelling a new economy built on blockchain. From startups to established crypto exchanges, business models are being revised. It is also enabling brands, as well as users, to identify fake and original items.
Now, some of the world’s biggest luxury brands e.g. Dolce & Gabbana now mint NFTs. The uptake has been so massive. Thanks in part to Facebook’s rebrand to Meta. It was crucial to announce the new realm which started gathering steam earlier in 2021.
Prior to its hype, the NFT phenomenon burst into the open on the 12th of March 2021. That was after the news broke that blockchain entrepreneur, Vignesh Sundaresan a.k.a MetaKovan, bought digital art as an NFT for more than $69 million. Search interest for NFTs on Google reached its all-time high on the day. Words spread quickly within and beyond the crypto community.
In a blog post, Sundaresan said he revealed his identity to show that Indians and people of colour can also be art patrons. Quite a profound resonating message as he cites cryptocurrency as the “equalizing power between West and the Rest.” This record-breaking sale of Beeple’s opus became a watershed moment for the NFT industry. The sale took off the veil and allowed the capabilities of NFTs in the art space to be appreciated. And here we are today.
NFT market has really grown
According to Chainalysis, the latest data shows that nearly $41bn had been spent on NFTs by the end of 2021. The past year saw tremendous improvement in the NFT space even though many individuals and platforms — including crypto exchanges which gather as many projects — are yet to explore the market fully.
Yes, the NFT concept started somewhat rough and tough. The indications are that the NFT tech trend has evolved over the past 12 months. Along with those in the gaming sector — with their revenue model — which also represents a use case for NFTs, developing trends suggest the NFT market growth hasn’t really started. More from the entertainment industry players, artists, politicians, and even your little niece — all from outside the crypto kingdom — are joining every day.
And that’s the point. The exposure has increased (and is still increasing) across the board. So you need to rethink where you stand in this burgeoning space.
Most attendees at this year’s Consumer Electronics Show (CES) reportedly expected to see everyone talk about the flagship themes including NFTs and the metaverse. The largest of its kind globally according to market commentators, over 2,200 companies were at the event to exhibit in person. NFTs were there as well.
Expect to see more Melania Trumps and Eminems and top political parties like in Korea, and Snoop Doggs, name them, in the NFT space. Or more Samsungs, Paris Hiltons. NFTs are now getting closer to us than we think.
Sports, bonds…The growing significance of NFTs
NFTs exist on the blockchain, like cryptocurrencies, but are not interchangeable. They help users and collectors create an emotional attachment to non-physical items. So much that, as they get closer to us, they are fuelling the rise of decentralized commerce in a way. They are giving power back to the people and removing mediation in the process of digital to physical redemption.
In sports, for example, NFTs are proving to be a powerful new medium for teams and players to engage with their fans across the globe. Like traditional sports memorabilia, they provide a creative new way to keep the fan experience alive. They also offer monetisation opportunities for brands. In fact, the endorsement by celebrities has been attributed to be responsible for a new type of monetisation strategy as evident in NFTs’ probable role in the future of digital assets.
The same could also be said of the bonds market. A new decentralised bonds system, D/Bond, is introducing a financial tool to securitise any form of digital debt or asset into a bond class which runs a gas-efficient process that allows loan bond splitting and bundling for trading both NFT bonds and ERC20 token bonds.
The non-fungible nature makes NFT-pledged loans to be inefficient. But with a securitised loan, as offered by the decentralised bonds’ platform, the best valuation can be better determined before a loan is given to the creditor.
So it is not enough to think of NFTs as a buzz. It can’t (and won’t) fade away overnight like the crypto craze (particularly the initial coin offerings — or ICOs) of 2017. Rather, they should be seen as the vehicle to bring many who have never owned crypto before into the space. Or seen as providing a way to meet the strong demand from crypto investors seeking new pathways to invest and manage their wealth. Or NFTs should inspire you to properly position yourself for what’s to come. Like making a business proposition to you.
It could explain why NFTs have been touted as the killer blockchain product that the crypto industry has been waiting for to drive further adoption. Probably for their potential to make mainstream users’ entry into the crypto ecosystem simple and straightforward.
Because as it seems, while some may be aware that they are using crypto and blockchain for NFT transactions, others may not. For the latter, buying NFT arts or bonds, for example, may just be another way to buy what they like. Nonetheless, crypto use is growing.
NFTs still to grow
So it’s safe to say NFTs suggest the beginning of a transformation. They came like a storm in 2021. They are expected to continue on an upward trajectory in 2022 as more brands enter the cryptoverse with an appeal that serves their existing customer base while rewarding loyalty.
It is a known fact that the market for NFT tokens is still dominated by Ethereum and transactions are still limited to the respective networks of minting. That things slow down when more people mint on the Ethereum blockchain, for example, and it gets clogged to unprecedented levels. This leaves room for alternatives. It also shows that the NFT market is still restricted in a way.
However, when this is surmounted, usage for NFTs would increase dramatically once they can be moved freely across networks. Some market insiders are already calling for this push in 2022 but it is not clear if it will happen.
Should more use cases be realized, more attention and interest are triggered to explore the completely new NFT realm. The NFT ecosystem continues to grow as its appeal extends across a myriad of industries. The future of decentralised art, sports, bonds, and others would be strengthened. This will in turn pave the way for more users into the crypto fold.
It’s becoming obvious that creativity is being encouraged in the NFT space. It is accessible and can be very lucrative. It has sparked interest within the crypto community and beyond it despite still being a nascent space. Its steady growth speaks volumes to the level of engagement to come.
PS: Check D/Bond’s updated website for detailed information about the team and the company.
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