The NFT Market in 2022: Which Events Leave Profound Impacts?
The NFT market has experienced an eventful year with both positive and negative changes. Let’s take a brief look at noticeable events that can shape the future of NFTs in 2023.
Non-fungible tokens (NFTs) had its glorious spotlight in the early months of the year before crypto crashes and their contagious effects. It can mark an end to much of the speculative frenzy.
Don’t know when to buy and sell, Try Copy trading.
Yet, the situation could be more optimistic. Agreeing that there are some road bumps, but we should mention some bright spots that liven up the space. For instance, the surge in the use of NFT artwork to develop brands and projects!
NFTs have experienced a tumultuous year. This article shares a recap of dominant NFT moments in 2022 so that you can draw insights into the past, present, and potential trends in the future.
Bud Light Has a New Way of Using Nouns
Nouns is an NFT collection by Nouns DAO (Decentralized Autonomous Organization). It is also an experiment on Ethereum with the aim of improving the interaction of on-chain communities. For those who don’t know, Nouns is one of the DAO’s high-value NFTs that Ethereum granted Bud Light, a popular American-style light lager beer company.
Instead of following traditional approaches, Bud Light’s play was truly unlike any other. It put Noun glasses on cans at the Super Bowl and let holders vote in the Nouns DAO on its behalf. The project was successful with the help of Veyner3, Gary Vaynerchuk’s Web3 consultancy. It shows the potential that major brands can embrace Web3 collaboration in a meaningful way.
CryptoPunks Hit a Record Sale
Despite the mounting trend earlier this year, the record sales still belong to the February sale of a single CryptoPunks NFT for nearly 24 million. Deepak Thapliyal is the man behind Web3 Startup Chain. He made a purchase of the Punk for 8,000 Ethereum (ETH), which doubles the previous record for the iconic Ethereum profile picture (PEP) project. On the edge of the FTX collapse, Deepak Thapliyal had the intention of selling the NFT, yet he decided to keep the crypto status symbol.
Pixelmon Disaster
Pixelmon, a tokenized monster game, sounds like an imitated version of Pokemon. And it sucks. People describe it as not more a clunky-looking, boxy monster bore than a concept art. Even its founder said the reveal of Pixelmon was a “horrible mistake”. A new team jumps in to get a proper profile and operation.
CryptoPunks Now Belong to the BAYC team
BAYC, the Bored Ape Yacht Club, is an Ethereum-based NFT. Yuga Labs, its founder, made a big announcement that BAYC bought the leading CryptoPunks IP from Larva Labs and its metaverse-centric Meebits Avatar IPs.It is a move doubling the power as the two largest NFT projects are now under one house.
The holders of CryptoPunks and Meebits now have IP commercialization rights like the Bored Apes. Also, Yuga Labs has been working on the establishment of the Punks’ legacy in the art world.
Free Money for Apes is Real
The Bored Ape Yacht Club continued to launch ApeCoin, a token on the Ethereum-based blockchain, for metaverse apps. The Bored Ape holders could snag a haul of nearly $80,000 worth of tokens on day one. Despite the falling prices of ApeCoin to 85% since its peak, NFT holders cashed out and quickly scored big on the launch amid the crypto winter.
Axie Infinity was Hacked
Axie Infinity, a monster battling game’s free-to-play ecosystem, is the biggest NFT project, yet it started 2022 with struggles. It witnessed a dramatic decrease in both NFT and token prices. Things got even worse by a late March hack when some $622 million worth of crypto funds were pilfered from the game’s Ethereum sidechain.
The Robin Network hack was considered to be due to insufficient decentralization, which left space for attackers to send fraudulent transactions via its bridge to Ethereum. Meanwhile, the U.S. government pointed at North Korea’s notorious Lazarus group. Sky Mavis, an Axie Infinity developer, raised $150 million in fresh capital to support the refund for affected users. Hackers clawed back around 10% of the stolen fund via exchanges.
Moonbirds Get on the Race
Within two days after the launch, Moonbirds obtained some $280 million worth of primary and secondary trading volume. Subsequently, the capital was raised by Alexis Ohanian, a Reddit co-founder. Proof, a Web3 start-up, opened up IP commercialization rights to Moonbirds to everyone in August. Although it stirred up controversy, Proof is still one of Web3’s buzziest startups.
Otherside Had an Explosive Launch
Yuga Labs, the founder of BAYC, launched the virtual land deeds for the Otherside metaverse game. And the owners of Bored Apes gained a free drop of valuable crypto assets. It immediately helped the Ape NFTs surge in value.
In the first couple of days, the launch of Otherside racked up more than $900 million worth of primary and secondary sales. It helped to set a single-day trading record for top marketplace OpenSea in the process. Yet, it gets criticism on design and Ethereum gas fees, some of which Yuga Labs eventually refunded but he kept silent in front of complaints.
NFT Speculative Bubble Shows Signals of Sinking
The Otherside launch was the latest massive drop, yet the NFT market was not the exception under the effects of the wider crypto crash and macroeconomic turmoil. There was a dramatic drop in trading volume with a monthly decrease of 88% in the comparison of November data to January’s in a sharp fall of NFT numbers.
Bored Ape fell from $429,000 ETH in late April to under $60,000 throughout November. The market is still yielding over half a billion dollars every month in trading volume. Leading NFT projects have occasional big-ticket sales, yet the buzz has faded.
Minecraft Will Ban NFTs
While NFTs are the trend, some traditional gamers show their opposition to NFTs. Minecraft and its parent company — Microsoft, announce that they have the intention of banning NFTs from fan-operated Minecraft servers.
Also, it prohibits derivative projects from Minecraft’s present game assets. Moreover, Rockstar Games, a major game studio, announces that it will ban NFTs from Grand Theft Auto V servers. The move leads to the decision of the NFT world to start fresh and develop its own same-same game.
The Prime Time of… Twitter Scams
Social media scams show the real power of manipulating people through FOMO culture. The salient examples can be found on Discord and Instagram where accounts were hijacked to spread scam links to steal NFTs from users for connection of their wallets. However, it is not that obvious on Twitter.
The trend now is to steal and rebrand verified users like journalists to share scam links. You can find it around projects like Otherside and Azuki. Even prominent creators like CEO Gabriel Leydon, the man behind Beeple, Nouns, and Limit Break, are the victims of stealing social accounts. Some companies have fought back, such as MetaMask and OpenSea, yet attacks are still flooding space.
The Beginning of Solana’s Major Players
The space of Solana NFT kept on solidifying into a powerful Ethereum competitor in 2022 thanks to prominent projects such as Magic Eden and DeGods. Specifically, Magic Eden took over the Solana space and brought about a $1.6 billion valuation in June, strongly competing against OpenSea and also expanding into Ethereum.
At the same time, DeGods, an NFT profile-picture project, grew from a rocky launch in late 2021 into a true titan across all NFT platforms this year. It immediately became the most valuable project on Solana.
Bored Ape Expands in IP Usage
The idea of decentralized IP witnessed some early traction last year but got a surge of popularity in 2022 with the aid of high-profile projects like Snoop Dogg and Eminem’s MV and MTV VMAs performance. Besides, the noticeable projects include the launch of Bored Ape-theme restaurants and drink brands.
Ethereum Merge Was a Turntable
The Merge’s transition to a much eco-friendlier consensus model generated significant benefits to the perception of the NFT space. It helps the consumption of the largest NFT blockchain drop to over 99% due to the elimination of resource-intensive mining.
The environmental effect of Ethereum NFTs might have gotten the biggest complaints from NFT criticals until the Merge was launched. The creators now do not have to worry about the outsized energy hit or carbon footprint.
Polygon was a Favorite Choice of Big Brands for NFTs
In October, an executive of Reddit stated that over three million of Reddit’s users had created Polygon wallets for minting its collectible avatar NFTs. Although those freebies do not have huge value, it is still a big step to onboard the masses. The platform of Starbucks NFT rewards and Meta’s Instagram NFT minting can reach more people.
The Debatement of Creator Royalties
It is common to have royalties ranging from 5% to 10% fee on secondary sales, paid back to the original artist or creator. Web3 builds this characteristic as a key aspect to ensure that creators and builders share in the existing success of their work.
Yet, some marketplaces started ignoring them to lure traders and investors away from major platforms. OpenSea stated that it sat on the same kind of move and shortly encountered ample backlash from creators.
Ultimately, OpenSea said that it would continue to enforce royalties and rival platform X2Y2 used OpenSea’s new Ethereum enforcement tool. Yet, the story keeps on with new royalties enforcing NFT benchmarks and tools in the works as creators attempt to save a key source of revenue in Web3.
You can also find us 👇
Join Coinmonks Telegram Channel and Youtube Channel learn about crypto trading and investing
