Decentralized finance, or DeFi , is all the rage in Ethereum’s corner of the crypto world recently gained attention through the spectacular rise of 'yield farming,' which involves earning income by investing your money in DeFi platforms .
However, Ethereum has another vibrant hub gaining traction this year known as the NFT scene.
Even those knowledgeable about crypto may not be deeply familiar about NFTs This virtual trend, known under terms like non-fungible tokens, nifties, or crypto collectibles, might ring a bell thanks to the huge wave of CryptoKitties back in late 2017, when Ethereum enthusiasts invested heavily in those digital feline characters.
Since then, the NFT arena has exploded in activity and 2020 has truly been a landmark year for the rapid growth of NFTs, proven by the NFT market hitting its first $100 million worth of sales in July 2020.
This important milestone in the NFT journey implies a vast potential lies ahead. To grasp what lies in the future, let's delve into the essence and journey NFTs have undertaken thus far.
The NFTs 101
What makes an NFT an NFT?
To break it down simply: assets can be fungible or non-fungible. Fungible assets are interchangeable. One dollar is exactly the same as another dollar, just as 1 BTC is equal to another 1 BTC.
In contrast, non-fungible assets are unique and identifiable, like works of art or pieces of land. Non-fungible tokens are distinctive digital items maintained by blockchain, ensuring each is scarce and unique.
Given that Ethereum is the go-to platform currently for creating NFTs, the leading NFT standard is Ethereum’s ERC721 specification that emerged first in January 2018: ERC721 tokens have become the principal type of NFTs since then.
OGs: CryptoPunks & CryptoKitties
You can trace the lineage of today's NFT economy back to some primary early models, namely CryptoPunks and CryptoKitties .
CryptoPunks, introduced in early 2017, comprise collectible pixel figures capped at 10,000 in total, each bearing unique visual characteristics. Initially free, these characters stirred a frenzy when Mashable covered the project.
This burst of excitement gave the NFT sector the energy it rides on today. It was substantial enough for CryptoPunks to stay in style, with buyers spending as much as 60 ETH on them earlier this year.
One more significant pioneer in the NFT arena was CryptoKitties, where participants could breed and trade unique, charming digital kittens. The project soon racked up millions in sales, supporting the viability of secondary NFT markets.
Thanks to CryptoPunks and CryptoKitties, the bar was set early on, sparking inspiration for countless innovations thereafter. Innovators, venture creators, and collectors have been nurturing the NFT ecosystem ever since.
NFT Sales: $100 Million
NFT market history website NonFungible shows that, up until this writing, the total sales volume in USD for NFTs on Ethereum was over $99.5 million. Therefore, surpassing the $100 million landmark seems imminent within days.
Taking a broader perspective, the rapid rise of the NFT economy is awe-inspiring. An NFT authority and Polynexus Capital partner Andrew Steinwold highlighted in a recent Bankless publication, this sector is just getting started.
“With December 2017 as our starting point, the NFT market has only been around for 2.5 years, an extremely small amount of time compared to bitcoin (11 years) or traditional markets (hundreds of years),” Steinwold said.
Hence, reaching the $100 million threshold is evidence that NFT projects are captivating users, despite their early stage of development.
Early Types of NFTs
The exploration of NFTs will continue for years as their potential is still being unveiled. There are, however, certain popular categories identified by Andrew Steinwold:
- Collectibles (such as CryptoKitties and CryptoPunks)
- Virtual worlds (like VR plots in Cryptovoxels and Decentraland)
- Game items (like trading cards in Gods Unchained or creatures in Axie Infinity)
- Digital art (displayed on platforms such as SuperRare and Async Art)
- Cultural tokens (for example, virtual apparel for Cryptovoxels or tokenized music albums)
- Other formats (like event tickets, memberships, real-world assets, professional services)
Every NFT category is bursting with unique opportunities. You can mix CryptoKitties to make new ones. You can organize virtual gatherings in Cryptovoxels , like the WIP Meetup You can earn rewards battling through Axie Infinity, showcase your programmable art on your Apple TV, and much more. This is merely the beginning.
Toward the Mainstream
Though CryptoKitties had a moment of breakout success in 2017, both the NFT space and Ethereum have evolved significantly and are now primed to truly enter mainstream awareness.
Of course, challenges linger on. Ethereum's overall user experience (UX) often comes under fire, but it's getting better as user-friendly smart wallets like Argent gain popularity.
Another pressing issue is the recent surge in Ethereum's transaction costs.
LinkedIn LinkedIn is more lively than ever today, with numerous scaling projects poised for larger rollouts. As these developments proceed, the groundwork for mainstream adoption is laid.
Still, NFT ventures need to keep crafting appealing offerings. Recent projects directly align with mainstream demands, such as professional sports, to draw the average person's curiosity.
Take Sorare, a fantasy football experience where you can amass, play with, and exchange tokenized versions of famous European soccer players. The game has been ablaze recently, topping NFT project lists by volume according to NonFungible. Such initiatives are steering NFTs toward general society, making them worthy of attention.
There's an abundance of talent in the NFT sphere, so it can be hard to keep up with everyone's work. Still, a few key individuals are regarded as the NFT experts you might want to follow. They include:
- Email Telegram
- Telegram WhatsApp
- WhatsApp Decentralized finance, or
- DeFi , is all the rage in
- Ethereum’s DeFi platforms
- about NFTs Since then, the NFT arena has
- exploded in activity The NFTs 101
Table of Contents
Now that NFT sales have crossed the $100 million mark, the next significant achievement will be $1 billion in sales.
It's uncertain when that goal might be achieved, but there’s a sense that NFTs are only getting warmed up. Reaching $1 billion and even more seems almost certain.
If you're keen to understand this world better or even dive into NFTs for the first time, I suggest looking at NonFungible for analytics and Toggle Table of Content for a well-rounded NFT marketplace. Give these platforms a try—you might find yourself captivated!
