Have NFTs become more than just a crypto fad?
in education
In the 2020-21 crypto bull market, we have witnessed the meteoric rise and adoption of NTFs. Now that the market has cooled considerably and many tokens have crashed in price, many are wondering if NFTs have some resistance or are just another passing fad.
Is the NFT value proposition verified?
With Bitcoin’s dominance as the world’s premier cryptocurrency and the primary quote cryptocurrency used on most exchanges for crypto trading pairs, we see a high degree of correlation with past crypto bull and bear markets. and Bitcoin’s 4-year halving cycle.
Over the past 13 years Bitcoin has had 3 halves, and with each market cycle we have seen the creation of new, innovative types of tokens, which evolve throughout the cycle. Past examples include Stablecoins, security tokens, DEX (Decentralized Exchange) tokens, DAO (Decentralized Autonomous Organization) tokens, and more recently, NFTs (Non Fungible Tokens).
Some of the newer types of tokens from the past have grown in popularity and fully established themselves as a permanent part of the ecosystem, such as in the case of DEXs, DAOs, and especially Stablecoins.
NFTs in particular have been in a unique position, compared to previous token trends in recent bull runs, because during the first two market cycles the crypto industry was still very new and was seen as too speculative. and risky for widespread adoption.
With the last market cycle, crypto adoption has increased dramatically and public perception has changed dramatically. Many companies and brands jumped head first this time instead of opting for careful observation from behind the scenes, and enthusiastically embraced NFTs across a wide range of industries, from games, entertainment, food franchises fashion and even toilet paper.
As market sentiment reversed in late 2021 and turned bearish, similar to previous cycles, many tokens lost value, with some losing up to 90%. NFTs as a whole have been particularly hard hit, with many falling off their bullish valuations.
For crypto veterans, this volatility has become expected, but for newcomers, like companies implementing NFTs in their branding and marketing, it has caught many off guard. This leads many participants in the crypto sphere to wonder if NFTs have any value.
Which companies have paved the way for NFT adoption?
With the growing popularity of NFTs, we’ve probably all heard of NFT projects like Bored Ape Yacht Club or Crypto Punks, but another surprising facet of the NFT phenomenon is that major brands are embracing NFTs to market their real-world products.
It has been said that brands without an NFT strategy are analogous to brands without a web strategy during the rise of the Internet. Despite the market downturn, many companies are still enjoying resounding success with their forays into the NFT space.
Let’s take a look at some of the most recognizable brands and how well their NFT offerings perform. Data reproduced with the kind permission of Dune.com
As major brands continue to successfully release NFTs and do so profitably even during the current crypto winter, it appears that NFTs offer fundamental value to both the companies issuing the tokens and the collectors and traders who pick up bids and transact on the secondary market.
Overall, this is a positive indicator that NFTs might be here to stay. In addition to companies finding success with their own NFT projects, we are also seeing a slew of new NFT art offerings, on a variety of blockchains like Ethereum, Solana, Cardano, Shimmer Network, and Flow, to name a few. to name a few.
In the world of Web3 platforms, having an NFT economy and NFT projects, marketplaces and minting platforms is an absolute must. Another fascinating aspect of NFT adoption is that NFTs have been a powerful driver for the adoption of crypto as a whole. Many people who were not initially interested in traditional cryptocurrencies have become crypto-savvy users, directly as a result of their interest in NFTs.
Many artists, content creators, and gamers who have traditionally been hesitant to buy or use crypto have eagerly embraced NFTs, either creating their own NFTs or collecting and trading them in the secondary market.
NFT crypto gaming has also seen remarkable success with games like Axie Infinity, Defi Kingdoms, and Gods Unchained attracting thousands of users playing for the prospect of earning and collecting in-game NFTs.
What’s next for NFTs? The evolution of non-fungible tokens
In addition to big brands with household names embracing NFTs for more “cool” for their brand image and a customer base that is always interested in the latest NFT offerings, what technological innovations can we expect for the space? NFT?
NFT proponents have celebrated NFTs as an important innovation since the days of Rare Pepes on the counterparty tokenization layer for Bitcoin, but they essentially haven’t changed much since their introduction in 2016.
The process for creating NFTs has remained pretty much the same, pick a marketplace like Opensea or Rarible, pay a fee in crypto to mint your token, then offer it for sale to your fans. If you’re lucky, he catches the eye of a crypto whale who buys him for millions of dollars in crypto.
Now, all of that is about to change with projects like IOTA’s Shimmer Network innovation layer and the advent of NFT’s feelless minting and commerce. The only fee associated with NFTs on Shimmer is a small storage fee paid in $SMR, the native token of Shimmer Network.
NFTs on Shimmer have the added capability of being standalone crypto wallets, allowing you to store other tokens or NFTs in your NFT on Shimmer.
Shimmer’s Tangle allows native assets created on Layer 1 to create wrapped assets from smart contract tokens created by IOTA’s smart contract chains on Layer 2, allowing Layer 2 tokens to inherit nature feel-free and safety features of Tangle and native layer qualities of Shimmer. 1 tokens.
The way IOTA’s Smart Contract Virtual Machine (ISC VM) works is that smart contracts run on their own blockchains, called smart contract chains built on layer 2 on top of the Tangle base layer . Each of these individual smart contract chains has the same network capacity as the Ethereum blockchain.
This means that tokens created on layer 2 in a smart contract chain can become a wrapped asset that is wrapped in a native token on layer 1, and can take advantage of Shimmer’s multi-asset base layer so that the Tangle could be used as a cross bridge without confidence. with increased security and no fees for safer, no-cost cross-chain asset transfers.
An interesting example of this is the Genesis NFTs on Shimmer which will make users eligible for future NFT airdrops, deposited into their Genesis NFT wallet. It is the first innovation of its kind for NFTs and promises to create new use cases for NFTs and the types of interaction they can have with Web3 decentralized services and platforms.
There’s already been a lot of hype around Shimmer’s next-gen NFTs, and thanks to Shimmer’s EVM-enabled smart contracts, porting and migrating existing NFT collections to Shimmer should be relatively easy and painless.
There are already several NFT platforms planned for Shimmer when it launches, including NFT marketplaces like Soonaverse and Pylon as well as NFT secondary market exchanges on DEXs like TangleSeaand ShimmerSea, both of which pay homage to Ethereum Opensea’s NFT marketplace with their names.
Bitfinex is pleased to announce that we will be the only major centralized trading platform that will have the privilege of listing Shimmer on its debut. Bitfinex customers will have the first CEX access to trade Shimmer’s $SMR token once the network is live.
Will other blockchains and NFT platforms follow Shimmer Network’s lead and also add additional features and capabilities to their NFTs? Maybe not, as there are technological differences between Shimmer Network’s DAG-based multi-asset Tangle network and conventional blockchains, which lack multi-asset capabilities.
If executed correctly, we could see a major migration of NFT activity from other Web3 blockchains currently favored for NFT minting and trading to Shimmer Network, if the benefits and added features change the given.
Shimmer’s compatibility with a variety of other Web3 blockchains that also use Ethereum’s virtual machine (EVM) for smart contracts will facilitate integration with a variety of other NFT projects across multiple chains.
