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The non-fungible token (NFT) bubble burst long ago, yet these versatile digital assets are proving harder to eradicate than many think. We may be in the grip of another serious downturn, with trading at an all-time low, even for blue chip NFT projects, compared to last year. Yet one thing is certain: despite booms and busts and many naysayers, the increased utility of NFTs as an innovative business tool will become and remain a permanent part of society. You might also like: No room for compromise: Marketplaces must do more to tackle stolen NFTs | Opinion
That’s why older brands like Nike and Tiffany & Co. Integrating NFTs into their business plans. Ultimately, collaborations with brands, makers and large companies will improve market sentiment. In other words, widespread adoption will follow as more leading brands become the first to take the plunge and simplify it for the rest of the web3 and non-crypto world.
Gary Vee was on to something when he said that the inflated market and people trying to make a quick buck are the main reasons for the slowdown of the NFT spaces. However, despite the sharp decline and the current macroeconomic environment, good projects such as Crypto Punks and Ether remain in high demand, with strong community involvement. This is due to their foundations, solid project path, and ability to address a specific need – which is true whether we’re talking about a simple collectible or NFT with tools.
It’s not that the industry has run out of good use cases for NFTs, but rather that the web3 projects leading them are ironing out the kinks in their roadmap and still achieving overall growth for their project. While others are succumbing to competitive pressure, as evidenced by OpenSea’s recent royalty cut. NFTs will find their niche and introduce new financial market dynamics as tokenization expands and provides greater utility for luxury brands and the gaming, entertainment, music and real estate sectors. This includes film and media rights, full and partial ownership, making investments more inclusive, time-sharing, ticket sales, memberships, ownership transfers and more.
The art market may have been the NFT’s coming out party, and the digital art renaissance could still bring about significant changes in the creative field; However, there needs to be more than NFT drops and creator fees: there is a need for support. To start, web3 projects must find new ways to improve access for global audiences, support for artists and creators, and usher in an era of fairer compensation for creators and intellectual property owners. However, in the film industry, for example, this will only be possible if the sector guarantees sufficient IP protection.
Funders, stakeholders and venture capitalists want to see more than a solid roadmap; they want knowledgeable operators with a strong track record of commitment to the specific project and who understand the push and pull factors of changing customer behavior. Additionally, the ears of crypto and non-crypto residents will perk up as cross-industry engagement with on-chain and off-chain initiatives becomes more prevalent, something that was lost and suppressed as industries and expertise became siloed.
On the creator side, we’ve talked about web3 creating new jobs and supporting new ways of working, but independent creators have yet to reap the fruits of their labor. For example, if you think about the music industry, for NFTs to help emerging artists, we need more well-known and experienced artists to bring their creative flair and expertise. As more companies emerge focused on protecting and supporting creators on this journey, and more regulatory clarity is implemented and standardized, industries will become more open to NFTs and the risks associated with them. It’s a challenge for people to participate in spaces where they might be doing something one day, but might not the next, and that’s where government support would prove invaluable.
As mentioned, the real estate industry is another sector that would benefit from the adoption of NFTs, if done by the right visionaries with a clear purpose. These projects can only be done by someone who has an idea to create something, with knowledge of running a business or driving lasting demand. This industry is haunted by a complex process that has yet to begin in the 21st century, and that is where NFTs come into play as a counterfeiting prevention mechanism. Ultimately, it is about eradicating age-old practices of administrative processes and connecting the physical and digital worlds through digital twins. For example, people who could never own a home before could now vouch for fractional NFTs and land trading NFTs.
The unproven financial viability of the NFT market is still in question, but forecasts predict a compound annual growth rate of 34.2% between now and 2030. So while NFT pessimism may be at an all-time high, we live in a digital society where we cannot ignore the benefits of this technology due to its immature stage. Creating continued hype and adapting to modern trends will account for some of the industry’s growth spurts, but projects will need to strike the precise balance between much-needed innovation and responsibility.
Read more: Beyond the Screen: Web3 and NFTs Innovate Hollywood | Opinion
Pan Lorattawut
Pan Lorattawut, CFA, is CEO of VUCA Digital, the company behind the CROWN Token Project and ADOT marketplace, which brings digital assets like NFTs and tokens to the entertainment industry. Pan joined T&B Media Global in 2019 as Chief Business Development Officer and now oversees VUCA Digital’s digital assets and advisory business and T&B’s investments, fintech, digital assets, strategy and business development. Prior to VUCA Digital, she was Senior Vice President at Meketa Investment Group, a full-service investment advisory and advisory firm with more than $1.4 trillion in assets under advisement in the United States. She has more than twenty years of experience in financial services.
