The King is Dead, Long Live the King!

As the French proverb says: Le roi est mort, vive le roi! It’s kind of like that now when we say that The NFT is dead… long live digital collectibles!

There are several studies on what has happened to the NFT market in the last year. The majority believe that the hype of 2021 is over and that NFT technology will take a new direction in 2023. What is the reason why the shining star of Web 3 has so quickly fallen into the shooting star category? What will be the fate of a technology that has become feature-rich in the meantime?

These are questions that might be asked by those who have been happily collecting monkeys, foxes and who knows how many other strange NFTs, waiting for them to become valuable.

Tulip Fever and the Wild West
Gold Fever, Tulip Fever and the Wild West seem to be slowly consolidating. At the same time, some things are losing value, while others are becoming more valuable simply because they have a function. Looking back over the past period, it can be seen that the hyped-up NFTs have always offered only a narrow range of users the opportunity to make a quick profit with some speculative thinking in the short term. The majority of users have never made any serious money from NFT collecting. Of course, some of them never wanted to, and bought NFTs mainly for collecting.

Speculators are disappearing and scammers are less common nowadays, all these signs point to the fact that they are no longer in business in the Wild West.

Narrow user base
The shrinking NFT market has been caused by several factors. Perhaps the most important of these is that many people still do not understand what NFT is. Many users have found it difficult to come to terms with the fact that the whole process is full of digital traps. The wallet, the crypto exchange, and the volatile gas fee have all caused serious difficulties for the average user. It is not easy at all to introduce new technology in 2–3 years while the whole system is subject to uncertain volatility.

It is also clear to see that the fall and prolonged crypto winter that followed the big boom and high Ethereum prices has been accurately tracked by investors and buyers. The atmosphere is now defrosting and is expected to turn around as rates rise.

Overstretched market
There were too many Eskimos and not enough seals. The huge run-up in the NFT market has resulted in a sudden explosion of supply. Everyone was trying to make money in the business, but few were producing quality. Today, a great name can launch a well-run campaign, but the many nameless and featureless NFTs are no longer very attractive to collectors.

Of course, in the mass market, there were plenty of others who focused only on the revenue from pumped-up campaigns. These campaigns were of course not free from manipulation. The majority of users had no chance to really consider what was valuable and what was not. Many collectors chose the strategy of buying a little of everything, which in turn fragmented the market considerably.

Valueless values
Actually, when I first heard about NFTs, all I really knew was that you could buy digitally existing images and sell them, all at a higher price. That was all the technology offered at first. Of course, when the trend became cool, innovators quickly appeared and wanted to add something new to the existing solution. This is what happened with NFT technology. Everyone quickly realised that technology had a lot of promise. Then, in the next generation, utilities, value-added and other useful functions appeared. NFT technology quickly entered the world of art, film, music, games and sports. Suddenly everyone wanted an NFT, but it was still the nature of the use that mattered, not the functionality. This was a major step towards the future and predicted that there would be a split between valuable and worthless NFTs.

Changing needs
In the last year, the NFT market has been completely transformed by the decline in consumer demand. Fewer campaigns and perhaps slightly more sophisticated NFT collections have appeared recently. However, the market is not the same as it used to be — you can’t sell just anything anymore. Some buyers are disappointed and their buying behaviour is not the same.

The transformation of the market is still underway, but there are also some reverse trends in the market. This is largely due to the fact that artificial intelligence has developed at such a speed that it now takes considerably less effort to launch a major collection than it did a year ago. On the other hand, there are late-awakening large companies that are risking the release of a collection based on their own brand reputation. Without features and utilities, this is increasingly hopeless.

The evolution of technology is also pointing to new paths for the future of NFTs. The new directions are mainly looking at what is the lasting value that the technology can add as added value, and what kind of use cases can make NFT technology effective.

Renaming and technology change
NFT, as we knew it two years ago, is dead. But NFT as a technology has a great future. Both the name and the terminology are changing. A more easily understood combination of words; digital collectibles and their variations are taking over its former role. In fact, it is more understandable and meaningful for those just entering the digital world. Digital Collectibles, using NFT technology, is able to represent a new kind of value compared to its forerunner.

We at Galaxis believe users will understand the term Digital Art Collectibles better than they did before with the unclear and incomprehensible definition of NFT. In this logic, digital loyalty and discount cards have a future as well as digital ticketing and digital identification systems. As digitalisation technology evolves, we will see solutions based on NFT technology in the near future, where users will not even know that it all started with crypto punks.

About Galaxis

Galaxis is a cutting-edge, no-code, out-of-the-box toolkit that transforms and enhances the relationship between any creator and their community by infusing collectables with unique utility traits, owner-specific benefits, and interactive communication opportunities. Galaxis’ end-to-end solution provides an essentially unlimited suite of decentralized community tools that allow anyone to grow, engage and monetize their audience.

Written by Tamas Peter Turcsan

_________________________________________________________________

Disclaimer‌‌

For legal purposes, we have to include this disclaimer. This of course doesn’t mean that we won’t do our absolute best to make every feature possible, but since this is new technology and new legal territory, we need to make sure that the terms and conditions are in order.‌‌

Galaxis / Ether Cards makes no representation, warranty, or undertaking, express or implied, as to the accuracy, reliability, completeness, or reasonableness of the information in any posts. Any assumptions, opinions, and details expressed in any Galaxis / Ether Cards blog or community posts constitute Galaxis / Ether Card’s judgement as of the date hereof and are subject to change without notice. Any projections or claims contained in the information are based on a number of assumptions including, but not limited to market conditions and the current status of Galaxis / Ether Cards, and there can be no guarantee that any projected outcomes will be achieved.‌‌

Galaxis / Ether Cards does not accept any liability for any direct, consequential, or other loss arising from reliance on the contents of the information in this post.