NFTs are growing, beyond digital art and collectibles!

The non-fungible token fever (NFT) is at its peak. As leading market players including influencers, musicians, artists and even mainstream companies have entered the NFT scene, hit their own NFT Across different verticals, the market capitalization and annual sales volume within this new cryptocurrency industry has skyrocketed.

While NFTs have been around for some time, 2021 has been a watershed year for this innovative concept. The sales trajectory reflects this meteoric growth, reaching $ 2.5 billion in the first half of 2021 from the total of $ 41 million in 2018. The dynamics of the NFT industry have been so breathtaking that the second half of the year has grown exponentially, with sales for 2021 exceeding $ 22 billion, according to data collected by DappRadar.

NFTs have been chained for too long

While NFTs can be valuable, primarily depending on their scarcity and demand, the NFT ecosystem has little to offer consumers, especially in terms of passive income. Unlike DeFi initiatives such as staking, yield farming, lending and borrowing, NFTs cannot be used to generate stable income. However, the current NFT market is speculative, mostly tied to aesthetic and sentimental values. This makes it difficult for users to assess whether it’s really worth the long-term investment.

Basically, if you have an NFT, the only way to make money is to list it in a marketplace, pay the required fees, and then wait for someone to get it. If no buyer appears, the NFT will remain inactive in your wallet. Ideally, NFTs hold great potential to serve a wide range of use cases, but they were mostly limited to digital art and collectibles.

The evolution of NFTs of art and collectibles

A year ago, NFTs were mostly “potential ideas” – reflecting views that few outside of cryptovers took seriously. However, the speed at which NFTs conquered the internet quickly changed this dated outlook, positioning NFTs among the most sought-after items in 2021. The evolution of NFTs has already started, with several promising projects introducing unique uses for NFTs. .

2021 is witnessing several promising projects that have added new verticals to NFTs. Whether it’s tokenizing real-world assets, applying NFTs to in-game elements, and opening up the possibility of accessing funding and returns using NFT, the promising projects add more value to NFTs, helping this growing asset class achieve significant widespread adoption.

New use cases for NFTs

For the most part, NFTs have been used as a “certificate of authenticity” for digital works of art. But their use cases are changing rapidly. Along with the growing spectrum of NFTs like financial NFTs, fractional NFTs, etc., a range of valuable use cases have been unlocked.

Recently, a new range of location-based NFTs has been introduced. These tokens certify digital ownership and are also geographically linked to the original work. Several art galleries, museums and artists are already using it to attract more users.

The fashion and clothing industry is also warming up to the idea of ​​NFTs. Consumer brands frequently abandon their NFTs. Likewise, the sports industry is also making the most of NFTs. Major football clubs, sports figures and teams are leveraging NFTs to expand their audience and reach.

Blockchain gaming is another emerging niche where NFTs have found significant use. Free-to-play games like The Sandbox, Axie Infinity, Decentraland, Splinterlands, and others have allowed players to exercise full ownership over in-game assets (NFTs) and buy, sell, and trade them in secondary markets. Additionally, the Metaverse is growing simultaneously, meaning NFTs will support more use cases in the weeks and months to come.

DeFi NFTs take the concept of tradable NFTs a step further. This newly introduced use case for NFT is possibly the biggest change that will shape the future of NFTs as the cryptoverse braces for the dawn of DeFi 2.0. Until now, NFTs could only be traded, bought or sold in open markets. The avenues for recovering NFT investments were strictly limited to these options.

Fortunately, platforms like Drops supporting a new world of opportunities for NFT holders to put their assets to use. By merging NFTs with DeFi, Drops has opened up a unique and untapped market for the taking. Imagine a scenario where you need the funds immediately but don’t have any collateral. Well, if you have an NFT, Drops allows you to use it as collateral to access finance. Additionally, you can add NFTs that are inactive in your wallet to the platform’s loan pools and earn returns and rewards in exchange.

Although still in their infancy, many unique NFT use cases have yet to be unlocked as technology evolves, with third-generation blockchain platforms likely to play a disproportionate role in the innovation that comes with it. . Accordingly, it is no exaggeration to claim that NFTs will play a pivotal role in shaping the crypto ecosystem over the next several years, as adoption trends support greater involvement from the general public.

Christopher S. Washington