Will the NFT market usher in an explosion?

As the world becomes increasingly digital, solutions to ownership problems have begun to emerge in the form of NFTs. In early July 2020, the total turnover of NFT (Non-Fungible Token) exceeded 100 million US dollars. After the DeFi boom, is it possible that there will be a similar explosion in the NFT field?

NFT (Non-Fungible Token) represents ownership of something, and each NFT is different and cannot be copied, so it also has a different value. For example, Bitcoin is homogeneous, there is no difference between each Bitcoin, and the more Bitcoins you have, the greater the value of your holdings. In contrast, each NFT is unique, so 1 NFT may be more valuable than another. Generally, the rarer an NFT is, the more valuable it is. A perfect example of an NFT is the land in Decentraland, all of which are different due to location, have different values, and cannot be duplicated.

NFT fragmentation protocol Tessera launches Noun 315 fragment NFT auction: On September 23, NFT fragmentation protocol Tessera launched the Noun 315 fragment NFT auction. The fragmented NFT series is called Nounlets, and each Nounlet can represent 1% of Noun 315 NFT, including the governance rights of Noun 315. [2022/9/24 7:17:38]

As we all know, the bear market is the period when encryption projects lay a solid technical foundation, and NFT projects have also made progress in the past two years. Decentraland, which raised over $20 million in 2017, successfully launched this year. The Cryptovoxels project, which sells digital land, has also received more investment than Decentraland. At the same time, Dapper Labs, which created the CryptoKitties NFT collection game, has also been working on providing a higher throughput environment for NFT.

Music NFT platform OurSong completes $7.5 million in financing: On April 28, music NFT platform OurSong announced the completion of a $7.5 million seed round of financing led by Infinity Ventures and Animoca Brands. This round of financing will be used to expand the team, establish partnerships, and carry out NFT-related knowledge training and publicity for artists. The OurSong mobile app was launched in early February this year and currently has 150,000 users. The platform allows artists to upload creative content-ethexc and mint it as NFT. The app has been deployed to Ethereum, BNBChain and other networks and is expected to be compatible with Polygon in the next few days . (coindesk) [2022/4/28 2:37:52]

In 2017, users could only participate in projects on Ethereum through MetaMask, and in the following years, the encryption ecosystem has achieved a leap in infrastructure: such as stable coins, non-custodial wallets, fiat currency entrances, fund management platforms, decentralized Facilities such as storage solutions and digital identity providers are already well established.

Data: The floor price of LOOT dropped to 6.09ETH, while the Ethereum network increased by 150,000 NFT assets every day: OpenSea data shows that the NFT floor price of the LOOT project dropped to 6.09ETH. From the data, the current quotation is below 10ETH (excluding 10) The number of NFTs is 80. According to data from the data website NFTSCAN, the Ethereum network has added an average of about 150,000 NFT assets per day in the past three days. This means that while the floor price of leading projects is falling, NFT assets are being created rapidly. [2021/9/9 23:12:45]

Due to the large number of use cases and decent returns from decentralized finance, Ethereum is showing a new cycle of user behavior. The first hype curve has started and will continue to rise, and the continued expansion of the market will bring more funds to the ecosystem.

The Binance Smart Chain NFT project DeCEX will list PancakeSwap on April 18: According to official news, the Binance Smart Chain NFT project DeCEX will list PancakeSwap at 9:58 pm on April 18, and open the DCX/BNB trading pair.

DeCEX is based on the BEP20 protocol developed by Binance Smart Chain (BSC) (token abbreviation DCX, total supply of 1 million pieces, contract address: 0xBa7D84c76B1CB41Ee787E63164f38372791C9C56), used for NFT acquisition and circulation. After the listing of PancakeSwap, the four major mining pools of DeCEX will be opened together, and you can earn token rewards or exchange NFT by staking DCX or DCX LP tokens.

The LP mine pool is 100,000 pieces, the DCX mine pool is 20,000 pieces, and the total supply is 120,000 pieces. The DCX LP mine pool can be pledged to mine Elon Musk series NFT. The artwork is created by the American virtual art designer Zemm design. [2021/4/18 20:33:02]

In this case, the NFT market is in a very favorable situation. The NFT field has benefited from numerous technological innovations, and at the same time is an ideal traffic portal for a new generation of cryptocurrency users.

According to the researchers' speculation, in the future, a large number of new users will enter the cryptocurrency field through NFT, and then steadily transfer to other market segments. NFT is a very primitive technical concept, and games have always been the import of various industries, just like many computer experts start to understand computer operations from playing games.

Reason 1: Simple and fun

The process of collecting digital artwork such as in-game assets such as weapons, gear, cards, and animals is an easy and fun concept that doesn't require any financial background. Users interact with the interface through fun games and are incentivized for ownership of unique items.

Fabian Vogelsteller, the creator of ERC-20 and ERC-725 tokens, has publicly stated that these standards were originally created for recreational community tokens (art, fashion, and entertainment) rather than the financial applications that have recently seen great success in DeFi .

Therefore, it can be said that NFT has realized the original intention of the creator of Ethereum. Through the collection of non-homogeneous tokens, it attracts users psychologically with its immutable ownership and vision.

Reason 2: Scarcity and investment attractiveness

The pricing of rare items is a zero-sum game, where users choose items they think are in demand in order to reap the benefits of rising prices.

As physicist and network scientist Albert-Lázló Barabási once said, when performance cannot be measured, the network drives success. In the art world, the number of works of high-profile creators is quite limited, so they are sought after by many collectors, which is the fundamental reason for the rise in the price of works.

In industries where there is no scarcity, such as when windows become expensive, more windows are quickly produced and flood the market. However, this is impossible in the NFT market. The value of NFT items is inseparable from the psychological appeal, so the economic cycle is more obvious. NFT, like scarce works of art, is unique and growing.

Reason 3: Asian market

It is nothing new that many cryptocurrency projects are targeting the Asian market. However, NFT is more attractive to the Asian market, because the concept of interesting collectibles and games has deep cultural roots in countries such as China, South Korea, and Japan.

Asians are very interested in visual representations of cute objects, characters and images. For example, many world-famous mascots and emoticons were born in Japan.

Purely market-driven asset values are a natural concept for Asians. Before the advent of cryptocurrencies, there were already games in Korea where you could withdraw your internal currency.

In order to meet the demand, more and more game companies and players have begun to enter the NFT field, which has also attracted the attention of investors. Unlike DeFi, where user interests and needs are driven by practical applications and benefits, the NFT market is driven by deep psychological patterns. As the world becomes increasingly digital, many items are only available in digitally native form, and the solution to the ownership problem has come in the form of NFTs.

In order to further promote NFT adoption, there are several issues that need to be addressed: interoperability and gas fees. A unified Layer 2 solution is important for NFTs as it allows NFTs to be intuitively present across all platforms and wallets, a key psychological factor of ownership.

Due to delayed sharding and congestion issues, the gas fee issue will likely continue to worsen until Ethereum 2.0 is implemented. As an analogy, a sharded blockchain is like cities and suburbs connected by highways. Creating NFT "cities" in Layer2 solutions or sharding would be a great goal in the long run. This is why NFT projects are encouraged to choose the same Layer 2 solution.

To sum up, as the technical obstacles are cleared, the future NFT market is worthy of attention.

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