In August, the NFT trading market set a record four major profitable areas and the pits that must be guarded
This article focuses on:
1. Record-breaking NFT actions of famous companies and NFT market transaction volume
2. The four most profitable applications of NFT
3. Four pitfalls about NFT transactions that have to be guarded against
Record NFT moves and market transaction volume of famous companies
On August 11th, the fantasy sports and sports betting company DraftKings will release the first batch of related NFTs of NFL star Tom Brady this week. The platform will successively release retired NHL legend Wayne Gretzky, golfer Tiger Woods, tennis professional Naomi Osaka, skateboarding pioneer Tony Hawk and retired New York Yankees star Derek Jett NFT.
On August 10, the sporting goods company Fanatics received US$325 million in financing. Michael Rubin, the CEO of Fanatics’ new business division, hopes to transform Fanatics into a global digital sports company for all areas of the sports industry (commodities, gaming, Ticketing and NFT markets) provide services.
On August 10th, FAW-Volkswagen’s Audi official Weibo announced that it will issue a limited edition of the NFT art blind box created by artist Cheng Ran based on the new Audi A8L 60 TFSIe through xNFT Protocol, and will give it to the top 100 through one-to-one exclusive communication. A new Audi A8L 60 TFSIe owner. It is reported that the NFT work will be jointly released by Audi, FAW-Volkswagen, Robb Report, and xNFT.
On August 9th, Tencent QQ Music officially announced that the first batch of TME digital collections will soon be on sale, and the first wholesale artists have already been in place. On the 10th, it was reported that Hu Yanbin’s “Monk” 20th anniversary vinyl NFT opened a lottery appointment on the QQ music platform to purchase qualifications, and a limited sale of 2001 copies. Earlier, Tencent’s NFT trading software “Huanhe App” has been officially launched, and 300 pieces of “Sound “Thirteen Invitations” Digital Art Collection NFT” have been sold out in the first period.
On August 6, Alipay updated the “AntChain Fan Tablet User Service Agreement”, adding a new service description of NFT digital works and NFT related terms. After users hold NFT digital works for at least 180 days, they will have rules or mini program functions in the event. If allowed, NFT can be donated to Alipay real-name certified friends.
On August 6, Christie’s announced that it will hold the “No Time Like Present” online auction in Hong Kong in September. This will be the first time an international auction house has launched NFT encryption art in Asia. Lots include a set of CryptoPunks created by Larva Labs, and a series of Bored Ape Yacht Club (BAYC) created by Meebits and Yuga Labs that first appeared outside the NFT trading platform.
On August 4, French luxury brand Louis Vuitton launched a mobile game “Louis: The Game” on the 200th anniversary of the birth of its founder, and launched an NFT lottery. The British brand Burberry has also begun to enter the NFT field, announcing a partnership with the multiplayer game Blanko’s Block Party, launching a limited edition B Series game character Burberry Blanko and a series of game accessories.
On August 2, Shopify began to allow merchants on its platform to directly sell NFTs, betting on the market’s alternative demand for third-party crypto markets. The company’s president, Harley Finkelstein, said on Twitter last week that the company’s goal is to win businesses by giving businesses more control over sales and customer relationships. Foreign media pointed out that Shopify’s sales promotion measures may allow NFT to enter the mainstream further.
On July 12, the “NARAKAHERO” series NFT authorized by the IP of NetEase’s game “Eternal Tribulation” was launched and sold out within 15 minutes. It is reported that the NFT was launched on the Binance NFT market, and it was issued by the Australian NFT publisher MetaList Lab after obtaining the IP authorization of the popular game “Eternal Tribulation” under NetEase. The co-founder of MetaList Lab said that the work released this time is the first NFT series authorized by NetEase Games.
It is not difficult to see that many companies have accelerated the pace of NFT development and investment, and are actively promoting the implementation. In addition to the positive progress of the company, market participants also made a major leap in NFT transaction volume in August.
The explosive growth of the market has also accelerated the inflow of venture capital into the NFT market. OpenSea, Rarible, Mintable and other NFT markets for art and crypto collectibles have all received financing in the past few months. According to third-party statistics, related financing reached 1.4 billion US dollars in the first half of the year.
At the same time, the transaction volume and average price of NFT’s digital collectibles market climbed to record highs. OpenSea, known as “NFT Amazon”, processed more market transactions on August 2 than in 2020. According to data from Dune Analytics, as of August 9, the cumulative trading volume of OpenSea’s August NFT market reached 547 million U.S. dollars, an increase of 68% over the entire month of July. According to Cointdesk, the transaction volume of Ethereum NFT in July reached 171 million U.S. dollars, an increase of 338% over the same period last month.
Picture from OK Link.com
Statistics from DappRadar, which tracks blockchain sales, point out that NFT transactions reached US$2.4 billion in the second quarter of 2021, slightly higher than the US$2.3 billion in the first quarter. These figures do not even include the market share transferred through auction houses, but it is undeniable that the NFT market in the second quarter of 2021 has greatly accelerated compared with the first quarter of 2021.
The four most profitable applications in the NFT market
NFT in full is Non-fungible token, that is, non-fungible token. NFT is one of the virtual assets from the memory block chain technology, which can store specific information in the memory block chain in encrypted form, thereby representing the ownership of the object, and then trading through the online trading platform. There are many types of NFTs, which can be digital paintings, images, videos, short films, animations, virtual characters and equipment of games, virtual fashions, handbags, etc., or even real objects.
There are many different voices in the market regarding the cognition or interpretation of NFT. On the one hand, NFTs are sought after by overseas markets because of their digital verifiability and permanent preservation. On the other hand, it is still unclear whether NFTs have legal definitions such as property rights and copyrights. Especially for judging the value and liquidity of an NFT, a variety of other factors need to be considered.
Up to now, the most profitable NFT application markets are mainly distributed in the fields of art, fashion, special needs collections, and games, and they are relatively successful.
- Artwork NFT
Looking back on the history of NFT, it only took a few months. In October 2020, Christie’s New York auctioned the first NFT work-“Portrait of A Mind: Block” by artist Ben Gentilli. twenty one”. The “Portraits of a Mind” series has 40 digital artworks. Each physical work is engraved with the original Bitcoin code. Each code is hand-carved and decorated with gold to symbolize the characteristics of Bitcoin mining. This work was sold for US$131,250 at the time.
On March 11, 2021, the auction house sold an NFT artwork created by digital artist Mike Winkelmann-“Everydays: The First 5000 Days” (Everydays: The First 5000 Days) for 6,900 The high price of ten thousand US dollars shocked the art circle and the crypto circle. The picture is currently the world’s third most expensive work sold by living artists.
Picture from cryptonetwork.news.com
- Fashion NFT
Similar to artwork, NFT solves the authenticity problem but eliminates the possibility of counterfeiting. Clothing and fashion brands are increasingly benefiting from the NFT trend. They have released a set of digital limited edition clothing that includes a series of iconic celebrity works or design signatures.
In addition, clothing and fashion brands can establish an NFT market for their clothing and accessories, which will enable companies to generate unlimited income from NFTs in a safe and reliable environment.
- Franchise Collection NFT
Tokenized collectibles is one of the most applications of NFT, and it feels like it is the most obvious way to deal with collectibles. People who trade from physical collections (such as trinkets, souvenirs, trading cards, and other items) now only need to sell the same items as digital assets. With the extraordinary ability of NFT to prove, the value of collectibles can be much higher than real objects.
For example, on August 2nd, ” Cry ptoPunk 3100″ was quoted for 35,000 ETH, which is approximately US$90.5 million, and the highest transaction price was 42,000 ETH, which is approximately US$108.6 million. It is currently the world’s highest unit price NFT work.
Picture from news.bitcoin.com
By far, the most popular collection is sports cards. Initially, the sports card program allowed only licensed football player card transactions. Now, the National Basketball Association (NBA) has used NFT to create the NBA Top Shop, a digital trading card market. Thousands of fans are waiting in line for the opportunity to purchase virtual cards. Other sports are likely to follow suit.
- Video game NFT
Compared with other NFTs such as artwork, fashion, and trading cards, the in-game NFT is the most advanced. This is because it is complicated and fully interactive.
NFT games have the function of buying, selling, trading or exchanging collectibles. Because the blockchain allows you to change the game from paying to win to playing games to win.
For example, Axie Infinity is a game that wins by playing. Players cultivate and sell Pokemon similar to “axies” in this game. In the past week alone, they have charged a fee of 30 million US dollars, which is better than Ethereum and Bitcoin. Coins and all other top-ranked DeFi applications charge more in the same period of time.
Although no game has gained high popularity so far, its potential is huge. As games splurge on virtual items, video games with NFT-saleable in-game items are likely to become big winners.
Of course, the NFT trend is blowing into more areas. For example, the automobile manufacturer Audi will use the xNFT protocol to launch the NFT collection. Audi is supporting Holoride, a start-up company that uses blockchain and NFT in its final product to create in-car passenger entertainment. The startup is expected to go public in 2022. Luxury car brand Porsche launched the NFT series through its NFT start-up company Fanzone. F1 Team McLaren Team and Red Bull Honda Team have teamed up with Tezos to launch NFT and promote blockchain through car logos.
In addition, NFT developers are increasingly proposing innovations for other industries. So far, different industries such as real estate, media and entertainment can also benefit from NFT.
Four big pits that the art NFT market has to guard against
NFTs have become so popular that respected companies, celebrities, and investors are launching or talking about launching their NFTs. However, there are many different NFT markets in the world, and new NFT markets are launched every day. Not all NFTs are valuable, and some are even worthless. The technical structure used in this $2.4 billion industry is still poorly based and cannot deliver on its “beautified” promise.
In the following, we share about the five pitfalls that NFTs have to be aware of in the art market.
- URL access methods are too dangerous and rely too much on NFT Marketplace
One of the main problems with the technology behind NFTs is how digital art is stored. A typical NFT is divided into two separate entities, smart contract or ERC-721 standard (stored on the chain) and digital artwork. Due to the size of the file, the cost of storing files on the chain is too high, so currently only URLs (network addresses) are usually used to point to artworks.
Kelani Nichole, the founder of Transfer Gallery, which specializes in computer-based art, said, “NFT is like a glorious receipt.” After participating in digital media cooperation for many years, she was shocked that the ERC-721 primary-stage standard used by NFT could gain large-scale market participation so quickly.
Nichole pointed out that it is very dangerous for NFT to use URL as the main way to access artworks, and NFT Marketplace has become a point of dependence. Assuming that Marketplace exits the market, once the NFT server goes down, their IPFS nodes are destroyed, and the content that people spend a lot of money to buy will no longer be accessible.
IPFS (Distributed File Storage System) mentioned by Nichole is a common protective measure. The distributed server hosts each URL on other computers connected to the network. Once the domain name is closed, files can still be retrieved from other nodes. However, even if this precaution is taken, many factors can cause URL disconnection.
But in fact, the interruption frequency of URLs stored on and outside IPF is so high that the platform checkmynft.com came into being. On checkmynft, users can insert the relevant NFT contract address and token ID to check the status of the URL. In March, checkmynft found that the works of Grimes, DeadMau5 and Steve Aoki were not loaded, even though they were stored using IPFS. After buyers and artists noticed this shortcoming, these files were finally made available online.
- The NFT document itself is not the main value
This problem may stem from NFTPlace’s lack of value for the document itself. As mentioned earlier, Beeple sold $69 million for the work “Everydays: The First 5000 Days” (Everydays: The First 5000 Days) to produce NFT platform-Marketplace co-founder Ryoma Ito (Ryoma Ito) In an interview with ARTnews, he pointed out: “The file is not really what constitutes the value of the NFT. After all, in many cases, you may find these files anywhere on the Internet. However, the selling point of the NFT is that it can Defined as an original document, making digital artwork valuable.”
When asked whether collectors should take any precautions to protect expensive digital assets, Ito said that it depends on whether the issuance platform uses IPF. If not, the owner should upload the file on IPFS. Ito recommends that especially “paranoid” users can save images to Google Drive or DropBox.
- NFT currently has insufficient storage options
Nithin Palavalli, CEO and founder of the blockchain services and security company RubiX, disagrees with this view. In a telephone interview, he said that the current storage options are not enough.
Palavalli and his team invented a new consensus mechanism, a model for verifying transactions on the blockchain, allowing users to store large amounts of data on the blockchain. Palavalli claims that assets stored on the chain can be better protected from hacker attacks, and it is much safer than the platform or IPFS storing URLs, although on-chain storage cannot guarantee permanent accessibility.
In addition, if your NFT is usually stored on a centralized cloud server like Amazon, once the central server is hacked, all NFTs stored there are likely to be at the mercy of hackers. Therefore, on RubiX, The same 1 million assets are stored on the chain, but distributed on 1 million different nodes, which is significantly less incentive for hackers to earn money.
Currently, RubiX is working with artists to create unique high-resolution files that only NFT owners can access using biometric technology. They have developed several decentralized security protocols in cooperation with the Microsoft Intelligent Security Association as part of their blockchain security products. These solutions will be more conducive to the operation of the NFT market.
- Smart contracts may be easily defrauded
The concept of NFT was first proposed by Anil Dash and Kevin McCoy in 2014. The purpose is to help artists monetize digital works when they are disseminated on the Internet, usually without credit or compensation. But even though the blockchain ledger is said to be immutable, smart contracts are more susceptible to theft and forgery than many people think. Moreover, because NFT transactions are highly profitable, hackers are more likely to take advantage of its weaknesses.
In addition, blockchain should ensure that artists receive permanent royalties when trading digital art, but even so, this benefit is not always realized when NFTs are transferred from one market to another.
Intellectual property lawyer Jeff Gluck said that because there is no uniform coinage standard, artists will eventually be defrauded of royalties. “The minting process is inconsistent and decentralized. Each market operates differently. This creates opportunities for counterfeiting and transaction fraud.”
For example, the smart contract from Nifty Gateway, “I don’t know how to respond or react to transactions that occur in OpenSea, because it is programmed. Some people would say that it was designed deliberately and only runs within the boundaries of the market,” Jeff continued.
To solve this problem, Gluck established CXIP Labs, a startup company that provides smart contracts that can communicate with any market protocol. If the NFT made through CXIP is uploaded to the new platform, the royalty agreement will be processed. CXIP’s smart contract is also editable, so if a new market emerges, the NFT will be updated to read the language of the platform.
- NFT works are easily stolen
Forgery is another potential trap. The provenance of NFT is usually through forging a specific crypto wallet. Although the ERC-721 standard is considered tamper-proof, the standard can be customized so that hackers can fake the work through another person’s wallet and then transfer it back to their own wallet.
The hacker Mr. Personne’s fake Beeple’s Everydays in April 2021 exposed this vulnerability. He downloaded the Everydays file from Christie’s website, made it through Beeple’s wallet, and listed it for sale on the NFT platform.
Personne published an article titled “Why I Do This” on his website NFTheft also pointed out that “genius and sophisticated creators cannot provide the necessary security protection for their works, and the platform does not seem to have any rights or protection measures. It can prevent their artworks from being stolen and misused.”
And the recent hacking incidents have become more frequent recently, and they have been reminding us how important “security” is in this decentralized world.
As Gluck mentioned in a previous interview with ARTnews: “If you do not register your work, you will not have the opportunity to exercise your rights against anyone who uses your work without permission. You cannot sue your work for release in court. On the blockchain, I can enforce my rights because it (as proof of ownership) is not recognized for NFT works.”
Because NFT is not a property right, nor does it have the protection of copyright laws, which is why CXIP also provides copyright services to customers.
NFTs will never lose their quality, because they only exist in digital form. NFT, as a new way to buy and sell and make money from intangible objects, data and digital art, has quickly become the focus of digital transactions. Although bubbles and controversies have also been questioned, the ecological development of NFT has become an established trend driven by the influx of huge wealth and the layout of major Internet companies.
Since NFT has numerous and unique applications, it seems that only a few technologies have been explored. The fact that only simple images are currently popular shows that no one can estimate the full potential of this technology.
As the popularity of NFT continues to rise, it may produce more complex tokens, leading to explosive growth in the NFT market. More on how to prevent counterfeiting of NFT products? Whether the NFT industry works and value should match, and so on, still need the industry to continue to explore.
Investors should also strengthen their comprehensive understanding of the NFT market, because they have to figure out how to make the NFT work and make it beneficial to you. In general, cryptocurrency investment is entering a mature stage. In the ever-evolving blockchain world, the technology behind cryptocurrency NFT is rapidly forming a passive investment method.
Written by: Esther
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/in-august-the-nft-trading-market-set-a-record-four-major-profitable-areas-and-the-pits-that-must-be-guarded/
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