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The Niche-to-mainstream Divide is Steadily Closing in the NFT Industry

More eyes will be drawn to the NFT sector, whether they are celebrities, huge brands, or companies, resulting in broad adoption.

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#nft #nfthours #market #niche #changes

Nonfungible tokens (NFTs) are no secret that they are still a fringe topic. Despite their meteoric rise in popularity in 2021, a sizable portion of the population remains unaware of what an NFT is. Looking at the graph below, it’s clear that there’s still a lot of work to be done before NFTs become widespread.

However, recent months have shown that this is a possibility, and there have been numerous signals of awareness and adoption, which we shall explain.

Celebrities

Celebrities have played an important role in the growth of NFTs. Initially, the NFT space was populated by artists, creators, and traders, all of whom laid the groundwork for what is now the NFT space. Since then, a number of important figures have entered the sector, either through their own efforts or simply through collecting. The current surge of celebrities has been incredibly beneficial in terms of broadening the reach of NFTs, but in the NFT market, everyone starts from scratch, and value does not come from influence. Many celebrities who created NFT collections without thinking about the long term have had their NFTs lose value, supporting this thesis.

There is a distinction to be made between those who have added value to the space and those who have sought to profit from it. Pharrell Williams, Snoop Dogg, Jimmy Fallon, Tom Brady, Paris Hilton, Post Malone, The Weeknd, Stephen Curry, Lil Baby, Timbaland, and DJ Khaled are just a few examples. They’re all celebrities who have purchased items from the collections and used them as profile pictures.

These celebrities have undoubtedly aided in the growth of the NFT sector, and as the number of celebrities in the space grows, there is no doubt that their influence will aid in the mainstreaming of crypto culture. But, most crucially, they are joining us, not altering the dynamics or establishing the rules. The NFT area is a communal effort, and we’re all working together to create value.

Adidas

The Adidas collaboration with Bored Ape Yacht Club, Gmoney, and PUNKS Comics is maybe the most significant mainstream bridge to date. Adidas introduced a new Twitter account, Adidas Originals, alongside these new partners to announce their goals, which shocked the NFT world with excitement.

They disclosed a number of major things in this space, including their plans to enter the Metaverse, a digital realm where users would be able to engage virtually in the future. To demonstrate their point, they published a trailer that shows Adidas’ Bored Ape and representations of its new partners moving through the skies and into the Metaverse in a seamless manner.

The newly purchased Bored Ape Yacht Club NFT #8774, a very specific blue ape they named Indigo Herz, with heart glasses and a fisherman’s cap, would be the face of its brand in the Metaverse, was also changed to the Adidas Originals account’s profile image.

What makes this so revolutionary?

Individuals have dominated the NFT space thus far. Individuals have pushed the sector forward, whether they be normal traders, inventors, or even celebrities. Now enter Adidas, a well-known and well-liked company with four million Twitter followers and 26 million Instagram followers. The presence of this one brand has the potential to attract more attention to the space than all of the individuals combined, resulting in a large increase in the number of NFTs.

Adidas also teamed with Coinbase, the biggest cryptocurrency trading platform, to pursue this objective. It also collaborated with The Sandbox, one of the most well-known metaverse games. Adidas presented their very own Sandbox plot in a tweet, a piece of digital land that formally establishes its position within this metaverse.

Ubisoft

With the announcement this week that Ubisoft Quartz will be available on the Tezos blockchain, Ubisoft became the next big corporation to go the Web3 path. The platform’s idea is that players will be able to use cryptocurrencies to buy and sell in-game items known as “digits.” This is significant because it will give players ownership of their in-game items, which in traditional games would only be available within and be dependent on those games’ own specific ecosystems, whereas the blockchain allows for ownership that is fully independent of a game world.

What is the significance of this?

Ubisoft is one of the top 25 largest gaming firms in the world, with a market capitalization of $5.8 billion. If this is only the initial step towards NFTs, it will undoubtedly be capable of much more in the future. Similar to Adidas and other major brands who have entered the market, they are all succeeding in bringing more attention to the potential of NFTs as a serious technology.

Despite the fact that Ubisoft’s entry marked a significant step forward in the mainstreaming of NFTs, their announcement was not without criticism. In fact, their YouTube video had over 20,000 dislikes in the first hour, prompting the firm to delist the video due to widespread backlash on social media.

When reading the comments, it’s clear that the hate comes from a variety of places, including:

  • Dislike the company irrespective of NFTs.
  • Dislike the payments; the cost may be out of reach for many.
  • Dislike the energy consumption that NFTs require.
  • Dislike NFTs in general.

This perspective confirms the reality that NFTs require a great deal of work before being accepted and adopted by the general public. But it’s not just individuals; several of the most popular gaming sites, such as Steam, have completely removed blockchain games from their shop. It’s unclear whether Ubisoft will stick to its original goals. However, its first conviction has underlined the reality that NFTs are rapidly gaining traction, particularly if a billion-dollar corporation is considering adopting them!

But why are NFTs so divisive, and how is this stopping them from becoming more mainstream?

What is keeping NFTs from becoming widespread, and what can be done to improve them?

Two of the most fundamental reasons why NFTs have been unable to join the mainstream are stigma and a lack of trust. When it comes to persons who have been the victims of rug pulls, some of the stereotypes are true to some level. Furthermore, many people have become subject to the growing threat of scams and hacking. You’ve undoubtedly also heard that “NFTs are a pyramid scheme,” “NFTs are a fraud,” and “NFTs are for money laundering.” However, this does not represent the complete picture.

There are negative actors in the arena who engage in this conduct, just as there are scammers in the real world. However, this does not cover the full area. Furthermore, a hardware wallet, also known as a cold wallet, can completely protect your NFTs. It’s stored on the blockchain, and only you have access to it since you hold the private key.

To further minimize frauds, improved channels of communication for NFT users must surely be established, as well as safer platforms that protect the safety of people who utilize them. Rug pulls are a problem, but they don’t happen all over the place. There are still trustworthy NFT projects that are genuine and reputable. Rather than lumping NFTs into a broader category like “scam,” a better knowledge of the teams behind them is required, as is more investigation before making investments.

Another roadblock to general adoption is the fact that, if you’re new to the area, setting up a Coinbase account and MetaMask wallet may be quite complex if you don’t know where to begin. Every step of the journey involves fees, transfers, and hassles, making this a significant barrier to entrance. This will dissuade the average person from even considering entering the space. So, if NFTs are to appeal to the general public, the process of getting started must be simplified.

There is a need for assistance. Unless you are highly dedicated, you will not be able to setup a wallet, start trading, and make transfers on your own. It is a magnificent effort for anyone to undertake, and as a result, we require mentors, assisting hands, and methods of assisting people throughout the process. The complexities of getting started are a significant barrier to entrance, and while manuals are important, something more comprehensive is required to make everyone’s lives easier. It’s tough to predict when NFTs will become mainstream till then.

Moving forward

NFTs still have a long way to go before becoming ubiquitous. However, as this essay explains, there are already a lot of strong signs that they will in the future. More eyes will come to the sector, whether they are celebrities, huge brands, or businesses, and if the timing coincides and people recognize this, a shift in thought may occur. But, first and foremost, much work in the areas of education and accessibility must be completed.

Both regulation and decentralization have apparent advantages and disadvantages. Frameworks and safety are possible with centralized platforms. Decentralization, on the other hand, allows for more creativity and freedom. Regulators, on the other hand, restrict ownership and free reign, while decentralization allows scammers and bad actors to flourish.

What we do know is that the NFT is a new technology that is still in its early stages of development. However, mainstream firms and brands are already showing interest. Whether gradual or rapid, the adoption of NFTs is unavoidable.

ART & COLLECTABLES

In June, the volume of Ethereum NFT trading decreased by 70%, although sales remained stable

Although there is less money in NFTs, sales haven’t really slowed down.

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Despite the negative market, there is some good news regarding NFTs.

According to Nansen data, the overall amount of Ethereum NFT trades has decreased by 55% over the past month, falling from 1.3 million ETH to roughly 584,000 ETH. In terms of US dollars, that represents a decline of about 70% from just under $2.6 billion to about $672 million.

Over the past month, Ethereum’s price has decreased by around 43%. But because “blue chip” NFT prices haven’t increased to make up for it, fewer transactions are taking place.

Bored Ape Yacht Club NFT prices are still circling about 100 ETH among the top five listed NFT collections on OpenSea, with average ETH prices having essentially remained unchanged. The exception is CryptoPunks, whose buy-in floor pricing increased by 48 percent in part as a result of Christie’s head of digital sales taking over as the Punks’ new brand lead this month.

The unique blockchain tokens that represent ownership over digital art are still being bought and sold by NFT traders; they’re just purchasing less expensive tokens and “aping” into free mints like Goblintown, which launched a wave of free-to-mint NFT collections centered around bodily waste, nihilism, and memes.

According to data from CryptoSlam, the typical sale price for an Ethereum NFT dropped from $2,463 in May to barely $703, a 71% reduction. While a result, NFTs are often more expensive to buy as the crypto bear market persists.

OpenSea reported 1.478 million NFTs were sold on its platform in May. As of Wednesday, 1.476 million NFTs have been sold in June, thus it’s entirely probable that this month will see an increase in NFT sales over May. The Otherside NFTs from Yuga Labs, which saw $561 million traded in just one day, also significantly helped May’s results.

According to Dune data, the total number of registered users who have completed at least one transaction on OpenSea’s marketplace increased by a modest 6.5 percent. With a 16 percent drop from roughly 422,000 to 354,000, the number of active traders for Ethereum NFTs has only marginally decreased.

Nansen data show that there hasn’t been much of a reduction in the number of weekly active NFT projects that are seeing revenues. Three NFT collections—the same number as last month—have seen more than 10,000 sales. Only 30% fewer collections this month—from 109 to 76—saw more than a thousand sales in a given period. Therefore, NFT designers are still making sales, especially in collections with the biggest market caps.

Consequently, traders are still making trades even though overall volume may be down 55 to 70 percent in ETH and USD, respectively. Despite the fact that they are currently buying and selling for less, it appears that NFT aficionados still have hope.

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NFT

Users’ email addresses are massively exposed due to an OpenSea data breach

The NFT marketplace stated that it has informed law enforcement of the occurrence and that an investigation is in progress.

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The largest nonfungible tokens (NFT) marketplace in the world, OpenSea, has issued a warning to users after learning that a Customer.io employee may have sent the list of OpenSea users’ email addresses to a third party while working on the platform for managing email newsletters and campaigns.

All users who have provided their email addresses to the marketplace, whether it be for the platform or its newsletter, have been impacted by the incident. OpenSea warned consumers about potential phishing attempts after the hack.

On Thursday, the NFT market reported that it had spoken to law enforcement about the incident and that a probe was ongoing.

The most recent data breach is far from the only significant attack this year on OpenSea and its subscribers. The popular NFT marketplace’s Discord server was compromised in May, which sparked a flood of phishing attacks. Numerous user wallets were in fact abused. The platform experienced one of its most severe attacks to date in January, during which a vulnerability allowed attackers to sell NFTs without authorization. The market covered losses of $1.8 million.

Customer.io rival Hubspot was breached in March, exposing users’ usernames, contact information, and email addresses on BlockFi, Swan Bitcoin, NYDIG, and Circle. Names, phone numbers, and email addresses of users of various platforms were disclosed to an unidentified entity.

Hackers may try to contact OpenSea clients by sending emails from domains that resemble OpenSea.io or OpenSea.xyz, according to a warning from OpenSea. Spam calls, texts, and emails have all increased, according to Twitter users.

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NFT

The Future of NFT Gaming Doesn’t Rely on Big Capital Expenditures

Large game publishers typically oppose your ability to trade freely. The economic model used in popular games, where players purchase in-game cash or points in order to unlock more content and improve their experience, is at existential risk from NFTs (non-fungible tokens).

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If it were possible to regulate the flow of NFTs in a closed market, this would be a different story. Interoperability will be key in the future, according to industry upstarts, and digital assets represented by NFTs will be portable from one platform to another.

Large gaming companies generate billions of dollars from microtransactions, and a key factor in their success is their ability to retain players willing to pay money for in-game items. These businesses have developed systems that entirely exclude any legitimate third-party access to certain material or digital assets because they want their player base to invest a lot of money in the game.

NFTs have the potential to be revolutionary since they open the door for broad lending of these assets in addition to allowing speculators to profit. It’s no longer necessary for a player to put a significant number of money into the game in order to fully enjoy it by enabling investors to purchase an NFT and then loan it out to someone – either for a fee or a profit-split arrangement.

How play-to-earn is implemented

A fully developed gaming ecosystem will see the emergence of two different types of stakeholders. Investors who have a sizable portfolio of in-game NFTs are less likely to play the game in exchange for a daily return of $50. Then there are gamers from all over the world, who in certain circumstances would make significantly more money than the minimum wage under a profit-sharing system for lending.

The second category, who can have less money, is more worried about the short-term volatility and low liquidity of digital assets. They are unable to take the risk of accumulating NFTs in the hopes that they will be steadily profitable and hold or increase in value.

In the gaming industry, tradeable digital assets already exist. However, the practice of putting these assets on the blockchain is expanding; this was a general trend in 2021, when NFTs earned $8.4 billion in revenue. The logical next step for this sector is video games, and since more and more of these sales are shifting to blockchain gaming, there may soon be a noticeable increase in established companies moving in-game objects, characters, and skins on-chain.

As opposed to nominally belonging to the investor or player but really being at the mercy of a centralized gaming platform that can ban the user at any time, on-chain assets are designated as unique and belonging to one true owner. It’s more decentralized and provides users a lot more room to choose their own routes, especially when it comes to lending in-game items and lowering entrance barriers.

creating the framework for play-to-earn players to borrow If NFTs result in a rapid expansion of the player base in new markets, they can be extremely advantageous for game producers. Even before one considers how digital assets might be coded to meet cross-platform use cases or be employed in metaverses, making the industry more accessible irrevocably alters the entire landscape.

The compatibility of digital resources

The idea of full cross-metaverse employment of NFTs on a single digital identity raises a host of hitherto unimagined benefits. As a result, potential value is unlocked and speculation may be brought under control in a less erratic and more stable market.

The restrictions must be adjusted and will be based on the rarity of particular assets and what you may do with them. Can they be upgraded? Can you construct on NFT land to increase its value? Should players be able to own an entire mountain, or can they only purchase plots? It will be entirely community-driven if gamers own everything, but creators should have some voice and may feel the need to impose restrictions.

It is likely that a DAO (decentralized autonomous organization) operated system, in which the entire globe is owned by members and NFT holders, is now being developed. However, it is unclear whether this will be sustainable without a rigid set of regulations.

establishing NFT financing

When you attempt to transfer an actual NFT to another user’s digital wallet, problems happen. You would want the loanee to post collateral to secure the loan because there is a danger of the loanee defaulting. This creates a capital cost that acts as a barrier to entry for a sizable number of potential players.

A preferable approach would be one in which the NFT’s utility, or “wrapped,” is the sole thing rented out. An NFT holder can put the asset in a smart contract, specify the loan terms, post it for rent on the market, and let the free market function as it should.

The wrapped NFT is a newly created copy that has the same metadata, URLs, and other characteristics as the original and can be programmed to expire after a specific date. By doing so, the human-trust layer is removed, and the remarkable security that blockchains offer is provided. In essence, this wrapped NFT is only useful and cannot be spent.

It expires, returns to the smart contract at the maturity date, and is burnt as the result of a frictionless, risk-free, and collateral-free NFT lending system. Additionally, if the loanee improves a piece of land or gives a character a lot more playtime, the original NFT might appreciate as a result of the loan.

The blockchain will be updated with these changes as a direct result of the wrapped NFT’s experience. Most NFT projects and protocols are moving in the direction of this methodology in the wake of the infamous Axie Infinity hack, which cost $600 million.

The rumor about large developers

Popular game producers will find it more difficult to avoid presenting some sort of product if current trends continue and the NFT lending sector experiences significant expansion over the following few years.

Ubisoft and Epic Games are already testing, and it’s feasible that NFTs may follow the same trajectory as the idea of cryptocurrencies in general, where everyone will eventually use elements of distributed ledger technology. The notion is that this will become too alluring for businesses to ignore, or they may employ private chains or something similar.

The play-to-earn buzz is not something that traditional gamers like, and they frequently have a point. The overall quality of the market is now relatively low, and players just play these games to earn cryptocurrency, so there isn’t much to get excited about. This has a detrimental effect because it was once hailed as the new paradigm.

The problem of people quitting a project because the value of the rewards has declined due to a token price fall is still there.

Some time may pass before those seeking a better future in NFT gaming. The profitability of large developers’ existing strategies won’t be simply abandoned in favor of a more decentralized NFT-based economy because doing so would undermine their economic model. However, seasoned creators may begin experimenting with already-existing in-game assets as NFTs, and they may profit greatly in this fashion.

Unless their bottom line is in danger or a highly lucrative opportunity arises, multibillion-dollar corporations often adapt slowly. Maybe both of these elements will be crucial in bringing about a change in how we handle digital assets.

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