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NFT prices have fallen in tandem with the crypto market’s dramatic correction, and only time will tell whether this is a buying opportunity

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Despite the fact that overall volume sales have decreased in the last seven days, there has been an influx of enthusiastic investors pouring into Web3. The total market capitalization of nonfungible tokens (NFTs) has risen to over $19.4 billion since the beginning of May, with a total volume reaching $1.2 billion in the last seven days.

Despite lesser numbers than typical, observers are quick to question if the project’s launching will yield usable products considering the amount of money pumped into them. Although this is not always the case, NFT investors make their decisions based on the team’s roadmaps, announcements, and estimates. Detours and obstacles are to be expected when investing in NFTs, considering the speed at which the embryonic NFT sector is moving.

Source: NFTgo.io

Notable projects and blue-chip status NFTs like Cool Cats’ Cool Pets, Axie Infinity, and even Bored Ape Yacht Club (BAYC) have strayed from their original plans, dampening the enthusiasm of their users. While this certainly worked out well for BAYC, investors should be aware that putting money into a company based on the promise of a roadmap could lead to disappointment.

Growing pains are unpredictable.

It’s exciting to come across a project that appears to be of high quality. The concept may check all of the boxes, and the team has demonstrated that they have previously built a viable product, but the art speaks to a wide range of individuals. Investors are convinced that they’ve stumbled upon a winner if the community is robust and rallies around their belief in the project, and it’s backed by a desirable roadmap.

Naturally, none of this guarantees success.

Take, for example, Cool Pets, which debuted on January 31 and planned to release Cooltopia, a play-to-earn (P2E) game. Due to a few technical issues, the rollout was delayed, and many NFT traders lost faith in the project. Furthermore, Chris Hassett, the former CEO of Cool Cats NFT, stepped down from his position on April 29, and the company is now looking for a replacement.

Source: Twitter

Unforeseeable events that may cause logistical problems are frequently the biggest impediment to a project’s success, but it’s crucial to distinguish between “good” and “bad” challenges. Accelerated expansion, for example, might place a strain on a project’s capacity to scale properly, but it also puts a deadline on it.

Axie Infinity wasn’t immune to a socially orchestrated breach that resulted in a $625 million loss, making it one of the largest cryptocurrency hacks ever.

The Ronin bridge, which transports payments to the Ethereum mainnet, is now closed. Users’ funds are temporarily frozen on the Ronin network pending the completion of a comprehensive audit. This unexpected development has left investors with their funds frozen and their in-game tokens on a precipitous decline. As a result, community morale has hit rock bottom, with investors voicing their concerns about how to proceed.

Morale can be affected by market cycles.

Accelerated growth might not only put a deadline on a project, but it can also lead to too many cooks experimenting with new ideas in the kitchen. When a project’s user base grows, so does the number of viewpoints on what is best for the community’s and project’s future and sustainability. This is where rumors start to circulate and expectations begin to build.

The Otherdeed digital-land NFTs from Yuga Labs is the most anticipated mint for 2022 so far, with value propositions of up to $110,880. The majority of these values were given to rare Koda NFTs that were scattered over Otherdeed regions at random.

OpenSea allowed ApeCoin as a means of payment for future listings because the mint was originally priced in ApeCoin. The Otherdeeds sold for an average of $25,629 before veal, but dropped to $15,510 after veal, paralleling the drop in APE prices.

Despite the fact that many Web3 investors expected this mint to outperform others, they did not expect the whole crypto and NFT markets to plummet. Ethereum has plummeted 15% in the previous seven days, and most NFTs are Ethereum-based, therefore their values have also dropped. NFTs based on Solana (SOL) have also been severely damaged, with SOL falling over 40% in the last seven days.

NFT dealers also expected the mint to provide liquidity to the NFT market. While liquidity was pumped into some collections, overall NFT sell volume fell by 40% in the last week. These numbers indicate that the market may be beginning a phase of cooling.

NFT investors are finding themselves in difficult situations since much of the market is in the negative. Some investors took on far more debt than they could handle, forcing them to sell their assets at a loss in order to satisfy margin calls and liquidations. Others attribute the negative slope to panicked retail investors in the United States due to interest rate hikes.

The WAGMI “we’re all going to make it” mantra, which became popular among NFT investors, is being put to the test, and traders are grappling with market cycles that aren’t marked by all-time highs and massive volume. A plus is that builders are frequently born during these lulls. More seasoned investors view market troughs as opportunities to “stack and survive,” adding to their portfolios and riding current lows back to new all-time highs.

NFT

According to Music Ally, Spotify has begun testing NFTs on its platform

If a trial deployment goes well, artists may soon be allowed to market their non-fungible tokens (NFTs) on Spotify, according to Music Ally.

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Spotify, the most recent tech business to join the NFT bandwagon, entered the web3 world earlier this month with the introduction of “Spotify Island” on Roblox on May 3. Spotify will now test NFTs on the platform to specifically selected US consumers, starting with a single trial selection of artists, including Steve Aoki and The Wombats.

Users will have to purchase NFTs through an external marketplace, thus they won’t be able to sell them directly. As part of the trial, Spotify has stated that it will not take a portion of the sales.

Simultaneously, customers have stated that Spotify is sending out surveys and even paying some people to talk to team members about their feelings regarding NFTs and web3. Questions concerning sentiment, cryptocurrency purchases, and why people acquired NFTs have been circulated on Twitter. Some poster responded with mockery to the queries.

Since March, when Spotify placed two job offers for working on early-stage web3 projects, rumors have circulated that the firm was interested in entering the web3. The announcement comes only days after Meta revealed that it would begin testing digital collectibles and NFTs on Instagram as well.

By the time of publication, Spotify had not responded to a request for comment from The Block.

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Square Enix intends to issue tokens and make a significant investment in Web3 gaming

By investing in blockchain gaming infrastructure, the big game producer is altering its business strategy to include a stronger NFT environment.

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Square Enix announced in its first-quarter results report that as part of its medium-term business strategy in 2022, it will include nonfungible tokens (NFTs) into more game goods.

According to Square Enix’s most recent earnings report, the company manages $3 billion in assets. The company controls the Final Fantasy franchise, which it sold for $300 million on May 3rd.

According to the report, the company began testing NFTs in February this year on the Shi-San-Sei Million Arthur game. If the pilot program is a success, the game’s NFTs will be renewed for a second season, and the company will expand its NFT and blockchain activities.

SE wants to provide regulatory clarity and norms for blockchain gaming, address scalability in NFT economies, and consider forming a corporate capital venture unit, among the top priorities of its blockchain domain projects.

The company also announced that it intends to create an overseas organization that will be responsible for “issue, administering, and investing our own tokens,” implying that the company will begin to build a large gaming-token economy.

SE has been exploring its options in the blockchain gaming market with the help of Web3 gaming and metaverse venture capital firm Animoca Brands. As SE digs deeper into the ecosystem, collaboration between the two companies is expected to deepen.

Square Enix’s gaming clout, according to Animoca’s executive chairman Yat Siu, will only help the company establish a blockchain gaming presence. On Monday, he said to Cointelegraph,

“Square Enix has long talked about the possibilities of blockchain games, so it understands it better than most of the traditional gaming titans.”

The third objective of the report’s medium-term business strategy is to invest in and monetize blockchain, artificial intelligence (AI), and cloud computing. This aligns with CEO Yosuke Matsuda’s stated desire in January to increase his company’s involvement in such technologies.

Despite a broad cryptocurrency market dip in 2022, the appeal of Web3 and NFT gaming has remained strong. On Saturday, according to market tracker DappRader, there were roughly one million daily active gamers, nearly the same as on January 1.

Gamers, on the other hand, aren’t spending as much as they used to, with total sales volume for NFT game items falling 88 percent from $70 on January 1 to $8.7 million on Saturday.

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NFT

Ukraine’s Ministry of Digital Transformation has approved a charity NFT initiative to aid military operations

On Thursday, Mykhailo Fedorov, Ukraine’s Vice Prime Minister and Minister of Digital Transformation, tweeted his support for Avatars for Ukraine, a non-fungible token (NFT) project that benefits Ukraine’s humanitarian and defense efforts.

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The project includes 70 digital artworks based on Ukrainian imagery and resistance to Russian forces that evolved as a result of the Russia-Ukraine war. All earnings from the sale of digital art go to support Ukrainian war efforts. The Ukrainian Ministry of Digital Transformation has approved Avatars for Ukraine, and the first NFT will be released on May 19.

This isn’t the first time Ukrainian officials have used blockchain technology to help fund war activities. The Ukrainian government opened a website in April this year where people could purchase and trade NFTs to support Ukraine’s military efforts, as well as raise over $100 million in crypto donations.

Avatars for Ukraine also joins a growing trend of NFT projects assisting in the donation of monies to charity, with some or all of the proceeds of NFT art going directly to the charity.

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