NFTs dominated in 2021 and are expected to do so again this year and in the years ahead. They have impacted the digital world and industries ranging from Art to gaming to investing. So, how does the future of NFTs look? What industries will they next disrupt? And what NFT trends will define the coming years?
The applications of NFTs are nearly limitless. Some claim that in ten years, all purchases will be accompanied by NFTs. Others believe that smart contracts will eventually replace legal documents. While many people believe NFTs are a fad or are too niche to become widely used, major players such as Meta, Twitter, Reddit, and Visa are taking notice and working to ensure they don’t miss out on this boom.
Here are some of the areas where NFT has made the biggest progression seen so far:
Gaming
In present times there are hundreds of games entirely based on NFTs. Furthermore, NFTs have the potential to change the way in-game marketplaces operate. Blockchain and NFTs have enormous potential in the gaming industry. For example, games like Axie Infinity and Blankos Block Party make a name for themselves with play-to-earn (P2E) models that pay players real money.
Axie Infinity is most likely the most popular P2E game available. The game, inspired by Pokémon, is based on purchasing, breeding, and training Axies to send into battle. The Axies are NFTs, and through battles, players can earn Smooth Love Potion, a cryptocurrency that is sold for real money on the secondary market. The Axie platform is one of the most valuable NFT projects globally, with over $1 billion traded on it.The platform was hacked by Ronin and they lost 600 million. They had to spend 4 million for validation.
The Metaverse
Metaverse is a digitally shared space that combines virtual and physical reality. Many people are hailing the metaverse as the future of online interactions and the internet’s next stage. But, one might wonder, what has this to do with NFTs?
Consider the metaverse to be the digital equivalent of the real world. You can socialize, explore, go shopping, and complete challenges. NFTs enable the same non-fungibility of assets that we see in the real world in this space. Scarcity and utility are what drive asset value. And NFTs enable creators to introduce both scarcity and utility into the metaverse, allowing for the development of a different economic system.
Decentraland and Sandbox, two leading metaverse companies, use NFTs to tokenize everything from usernames to in-game wearables to real estate. Twitter and Meta appear to be planning to follow suit.
Furthermore, a multiverse that connects multiple metaverses can change the game by acting as a bridge between digital creators and utility providers, allowing content to be shared across multiple apps via cross-usable non-fungible tokens. The goal of multiverse NFTs is to increase their usability of NFTs across various prospects.
Multiverse NFT is a significant step toward assisting digital creators, developers, traders, brands, and utility providers in deploying unique decentralized asset networks where they can trade, interact with one another, and interconnect projects from various niches. By increasing engagement and growing the community, such a network significantly contributes to the progress of entire interconnected projects. All of these visions indicate that multiverse NFTs will thrive in the advanced world.
NFTs powered by AI
Blockchain and artificial intelligence are the next major technological disruptors. So, it shouldn’t be surprising that the two are being combined.
The first major trend here is the creation of NFTs by AI. This is not a new occurrence. In 2018, Obvious Art had sold an artwork created by an AI called GAN at Christie’s for more than $400,000. However, the introduction of NFTs has widely recognized the value of digital assets, and today, new AI projects are producing new artworks and minting them as NFTs daily.
Community-owned entertainment and NFT streaming
NFTs are frequently credited with ushering in a creator economy. They’ve allowed thousands of artists to create and sell their work on their terms. However, the NFT creator economy’s potential extends beyond empowering visual artists and changing the art world.
DJ 3LAU tokenized an album and was the first musician to earn $11.6 million from the sale of 33 NFTs of the album. Royal, his next project, aims to shake up the world of music streaming.
Consider this scenario: an artist you admire creates a new song that you believe will be the next big hit. You can see that they minted it as an NFT, fractionalized it, and are selling shares in the song through Royal. You purchase 30% of the song. The song went viral a month later. Everyone is streaming it, TikTok influencers are dancing to it, and big brands want to use it in a new commercial.
This allows people to invest in and support artists and allows artists to give back to their most ardent supporters by dividing their revenue when and if the song makes money.
Finance and NFTs
Although the NFT market is worth billions of dollars, NFTs are speculative and non-fungible assets. NFTs, like real estate, cannot be profited from simply purchasing and holding them. For the NFT economy to function and investors to profit, they must be sold and moved around the market. New services that use NFTs as collateral for loans make this possible.
The world of cryptocurrencies and DeFi is exploding, and NFTs are unquestionably a part of it. Among the predictions for the future of NFTs in finance claim that NFTs will solve the problem of financing long supply chains. Many venture capital firms are now solely focused on investing in NFT and Web 3.0 projects. Visa is also making inroads into the NFT market. They spent $150,000 on CryptoPunk and announced that they would ” lay the groundwork to enable future adoption of NFTs and other assets.”
Furthermore, the application of dynamic NFTs extends beyond the realm of general collectibles. With an innovative and cutting-edge offering, these collectibles provide new ways for individuals to engage with real-world utilities while also generating a brand-new revenue source.
One example is direct sales, but the value of NFT digital collectibles can also be linked to a broader fan engagement strategy. For example, a club that uses fan tokens as a currency could make their line of NFT collectibles available only to fan token holders, thereby increasing demand for the tokens. Alternatively, NFT collectibles can be given as loyalty rewards to fans who reach certain milestones.
NFTs and the future
The NFT market is rapidly evolving. Every day, new NFT projects are popping up every second. From the Busan Metropolitan Government in Korea announcing an NFT conference to the International Cricket Council launching cricket NFTs to CoinRunners selling NFTs to fund a movie.
Over the past year, the few consistent NFT trends have been their steady growth, rising interest in them, and ever-expanding applications. The future depicted by these NFT trends is intriguing. While many people are concerned about the implications of the metaverse and the rise of AI, it’s a promising future. It bridges the gap between consumers and creators. Further, it adds value and security to digital assets and, for better or worse, will be here to stay.
