$100 Million in Digital Assets Sold and Big Companies are Waking Up
It can be argued that gaming companies have been issuing in-game digital collectibles since Atari in the 80’s. Fast forward to today’s gaming market and it is obvious that this trend has exploded with gamers collecting gold coins, diamonds, and all types of game loot. From this perspective companies have been “selling” digital collectibles for 40 years. But try selling a gold coin or a digital skin on ebay — you can’t.
Because of recent innovations with digital currencies, it’s now possible to “level-up” such in-game items to a digital asset called a non-fungible token (NFT). NFTs are similar to cryptocurrencies like Bitcoin but represent assets that are provably unique. They enable autonomous ownership and trustless use of the items outside of the game ecosystem. Although it’s early days, NFTs represent a new asset class beyond gaming, and companies across Art, Sports, Media and Entertainment are investing in and transforming their business around them. Yet, many of the largest companies are just now waking up, leaving the door ajar for smaller companies to take risks and benefit from the new consumer and their growing demand.
Speaking of growing demand, over $100mm NFTs have been sold in the last 12 months and that number is expected to triple in the next 12 months. There are over a million NFTs for sale right now some of them selling for hundreds of thousands of dollars. This isn’t just a few people, according to Richard Chen, a partner at the venture capital firm 1confirmation, who stated that roughly 18,500 wallets have traded on OpenSea (source).
4 Ways NFTs are Changing the Game
Non-fungible tokens can be used in situations where assets need to be differentiated from each other in order to prove their value, uniqueness, or scarcity. They can represent anything from digital skins and virtual land parcels to artworks, and licenses ownership rights. As mentioned above, it’s easy to verify ownership in a closed game ecosystem, but try selling or trading that gold coin or digital skin on ebay — this is the power of NFTs.
Blockchains provide a trusted, auditable single source of truth for digital assets, giving users ownership for the first time. A digital asset used to be stuck in an ecosystem like a game, and even if it left, good luck proving you own it.
Digital assets can be tracked creating a full chain of custody with key events added to enhance the items provenance e.g., this was the actual skin used during the fifth Hearthstone World Championship match.
There was no way to sell a provably unique digital asset before blockchain e.g., Try to sell a Fortnite skin on eBay, and you’ll discover the difficulty of moving digital assets from one person to another.
NFTs are programmable meaning you can extend their purpose beyond just collecting into things like trading, lending, collateralization, enabling them to act as a ticket to exclusive online communities, and programming perpetual royalties for all future sales. The programmability of NFTs enables businesses and organizations to integrate the new digital class into their existing business processes and applications.
“There is a new class of customers who want to buy scarce digital collectibles and companies are moving fast and winning”
If you now believe in the power of this new NFT asset class, you might wonder why many more brands haven’t taken the plunge. After all, the opportunity landscape seems ripe for experimentation doesn’t it? Covid has ended events and strained many revenue streams. Brands need to find new ways to monetize, and they are looking to tap into a new class of collectors looking to buy through digital mediums. And, brands that are sitting on a treasure trove of existing IP need to find ways to monetize them.
We have identified 3 reasons why big brands should pulled the trigger and take action
1. The market is maturing
There are big names that have announced projects like the Sacramento Kings, the NBA, Formula1, and Warner Brothers. But both the supply side (brands) and the demand side (crypto enthusiasts and regular collectors) both need to grow together.
2. The use cases are rapidly shaping
There is not one right answer as to how brands can start issuing NFTs. Some brands might gamify a solution, while others might take existing JPG’s and start issuing them digitally. This allows for a world of possibilities for companies to experiment with use cases like price discovery, flexible pricing models, auctions etc.
3. They might not lose by waiting
Sometimes there is an advantage to being first to market. Typically this is only known after there is time to reflect so we are encouraging brands to plant their flag in this space and start gathering fans and collectors now.
The NFT and digital collectibles space moves at an incredibly quick pace and companies that are waiting for the right conditions will have a hard time catching up. The Treum team has been building solutions in the blockchain space for over four years. What we observed is that trends start with a trickle, but when an adoption chasm is crossed the user participation and demand is a fast moving river. Companies that have experimented with technologies and explored the utility of their existing digital assets will be well prepared to take action and benefit from the coming massive user participation. We are seeing market signals of the looming massive customer adoption. Our platform is designed to make it easy for organizations to start small and rapidly scale into a new line of business when the market conditions are right for your specific industry.
Each time a newly issued NFT collection sells out in minutes it signals that the market demand is high and increasing. There is an enormous number of collectors and fans waiting for the next big thing they can acquire, trade, and create meaning from. Brands who understand this and are ready to seize this opportunity can easily get started with Treum following the steps below. Get in touch if you’re interested today!
Treum.io recently launched swether.io where crypto users can design rare swether NFTs on the 10x10 canvas and keep or give as a gift during the holiday season. Follow us on twitter to stay up to date @swetherofficial