In- depth analysis of NFT industry

NFT is a non-fungible token that maps a specific asset. It is essentially a smart contract based on Ethereum. It marks the user’s ownership of a specific asset through the blockchain, making NFT a recognized tradable entity for the specific asset. The price of NFT reflects the market’s recognition of the value and scarcity of the asset it is mapped to.

Marking the ownership of a specific asset: NFT uses blockchain technology to mark the user’s ownership of a specific asset, becoming a recognized tradable entity for the specific asset, and the price of the NFT reflects the market’s recognition of the value and scarcity of the mapped asset .

Authenticity and uniqueness: NFT records property rights by virtue of the characteristics of blockchain technology, such as immutability and traceability, and ensures authenticity and uniqueness. NFTs can be used to represent various assets such as virtual collectibles, in-game assets, virtual assets, digital artwork, real estate, and more.

Anchoring the value of non-fungible assets : Compared with homogenized tokens (such as real currency, virtual currency), the essential difference between NFT and its is that NFT anchors the value of non-fungible assets. FT anchors homogeneous assets such as gold and US dollars. Both have tradable attributes, the same FT value is interchangeable, but the value corresponding to each NFT is unique.

Market Overview of NFT Industry—Development History of NFT Industry

With the auction of Beeple’s work “Everydays: The First 5000 Days” in March 2020, which sold for $69.346 million (about 450 million RMB), the NFT trading market has become more and more widely accepted. social concern. From the original Cryptopunks and CryptoKitties projects to NFT artworks at today’s prices, the development of the NFT trading market has become a part of the DeFi world that cannot be ignored.

In- depth analysis of NFT industry

Analysis of NFT Industry Application Scenarios – “Everything Can Be NFT”

In theory, NFT can be applied to any field that requires unique authentication, including artwork, games, property rights authentication, and many other aspects.

In- depth analysis of NFT industry


Art:
NFT’s protection of the ownership of artistic works becomes the artistic driving force for open source and creation.

For many artists, especially those in the field of digital art, the biggest advantage of NFT is that it provides the protection of the ownership of artistic works and, to a certain extent, provides digital art creators with due economic returns through their works. new path.

The world’s first themed solo exhibition of blockchain art and encryption art:

In- depth analysis of NFT industry

Source: hiart.cn

Gaming:
One of the most popular applications of NFTs. NFTs provide an excellent solution for digital ownership of game assets, enabling players to safely trade assets and even decide for themselves the future direction of the game. In some of the current popular NFT games, players can buy digital land blocks, which can then be resold or used as in-game advertising space.

Authentication: NFTs have unique information about a specific asset, which makes it better for logos, licenses, qualifications, and certifications, etc., registered on any blockchain network; It will also be very useful when waiting for other digital information.

Intellectual property rights: For any intellectual property rights, such as song copyright, film and television copyright, invention patent, picture copyright, painting copyright, etc., NFT can be used for authentication. Simply put, it is equivalent to putting an unalterable and unique barcode on the back of each thing, which is used to confirm and identify the copyright of the asset.

Real estate:
Real-world real estate assets are tokenized on the blockchain, which enables smoother transactions, eliminates third-party intermediaries, and prevents ownership conflicts. With the continuous development and progress of technology and cognition, the application of NFT is far more than that. It is believed that more potentials and application scenarios will be tapped, and the future can be expected.

In- depth analysis of NFT industry

NFT Industry Industry Chain—Building Protocols to Create NFT Assets

The NFT industry chain is divided into three layers: infrastructure, protocol layer, and application layer. The current protocol layer is booming, and popular projects are launched one after another.

Infrastructure: Provide technical support for NFTs. It mainly covers the underlying public chains (Ethereum, Flow: public chains for building applications), side chains/Layer2, development tools (Pixura: for creating, tracking and exchanging encrypted digital collections), token standards, storage, and wallets (MetaMask) .

Protocol layer: Create NFT assets by building protocols, such as artworks, games, etc. Art/collectibles: Cryptokitties (trading, breeding electronic cats), NBA Top shot (collecting, trading NBA star player cards), SuperRare (art/collectibles platform); Games: Axie Infinity (P2P games), Decentraland (virtual space) games) etc.

Application layer: Based on the application of NFT assets, such as the pan-secondary market OpenSea (P2P NFT comprehensive trading platform) for trading NFT; financial and vertical fields such as community, data services, etc.

In- depth analysis of NFT industry

NFT artwork monetization model

Sale: Complete the sale of NFT artworks through trading platforms. Common trading platforms include OpenSea and NiftyGateway. To sell NFT works on the trading platform, in addition to uploading works and creating NFT projects, you also need to pay a “miner fee” (GasFee), and you need to pay a handling fee after the transaction is completed.

There are three sales methods: fixed price, auction and package sale. The fixed price of the OpenSea platform mostly adopts a decreasing model, which can gradually reduce the price of the work until it is sold or the sale expires. It also includes price-fixed sales, British auctions, Dutch auctions, private transactions, and more.

In- depth analysis of NFT industry

Lending: NFT owners obtain the required funds through loans, and borrowers obtain the right to use NFT assets through a small amount of tokens. This method is especially suitable for NFT owners who need funds in the short term. If the NFT owner is overdue, the borrower will get the staked NFT at a very low price.

Depending on the purpose, NFT lending includes three modes: lending for profit, lending for acquiring NFTs, and lending for assistance. Users can obtain tokens by staking high-value NFTs, which can exert the potential of idle assets, promote the circulation of NFT assets, and clarify the best valuation of NFTs.

NFT Fund: Through the NFT secondary market, individuals can invest in the NFT market without purchasing a single NFT work. Using the NFT index, users can divide the ownership of high-value NFTs into a large number of low-value tokens (they are fungible and composable investment funds), thereby facilitating the flow of assets and lowering the investment threshold for NFTs.

“NFTX” (NFTIndex) is the first NFT index fund project. It is a platform for generating ERC-20 tokens supported by NFT collectibles, realizing the exchange of NFT artworks and ERC-20 tokens, and providing a single fund token (investing in a single specific type of NFT) and fund of funds tokens (investing in a combination of multiple NFTs).

Development of NFT derivatives:
Adding NFT artwork elements to ordinary commodities can generate derivatives related to the original work, including limited-release prints signed by the artist, stationery, daily necessities, clothing and accessories printed with art works. Other collectibles that combine elements, etc.

In- depth analysis of NFT industry

NFT Competitive Landscape — Collectibles and Games Are Hot Sectors

NFT Trading Platforms According to Cryptoslam statistics, as of September 7, 2021, the three NFT trading platforms with the highest sales are OpenSea (comprehensive trading platform), Axie Infinity (game platform) and CryptoPunks (art image trading platform). Sales were $5.57 billion, $1.91 billion, and $1.24 billion, respectively.
The three NFT projects with the highest sales are the blockchain game Axie Infinity, the avatar collectible Cryptopunk, and the NBA player card collectible NBA Top Shot, with sales in major NFT trading platforms reaching US$1.842 billion and US$1.244 billion respectively. $742 million, $742 million.

In- depth analysis of NFT industry

In- depth analysis of NFT industry

China’s NFT competition landscape – Internet giants begin to deploy

In- depth analysis of NFT industry

There are not many domestic NFT commodity trading platforms, and they are still in the exploratory stage. Since 2020, many companies have entered the NFT trading market, including Internet giants.

In- depth analysis of NFT industry

NFT Industry Perspectives and Analysis—NFT Development Trend Outlook

The market bubble will continue to expand in the short term

The popularity of “everything can be NFT” makes 2021 the first year of NFT development. With the strong start of the NFT market, financial speculators are constantly pouring in. The NFT assets they anchor and hype are becoming less and less valuable. Gradually deviate from the entertainment and collection needs of the public.
The inflating bubble puts enormous pressure on every “taker” who buys at a high price to fail. Under this trend, it is foreseeable that the relevant supporting laws and regulations will be gradually improved and implemented in the future, and any process such as NFT evaluation and issuance, pricing sales, and secondary market circulation will be under supervision.

The transaction security of NFT will be gradually enhanced

The underlying technology of NFTs is blockchain, which means that NFT metadata may be at risk of being lost. Once the files represented by these NFTs are lost, the NFTs will also lose their value.

The distributed storage protocol can effectively solve the problem of NFT metadata storage security, and distributed storage can also solve the market risks brought by centralized storage due to its characteristics of decentralized data storage.

On this basis, future NFTs will rely on IPFS. IPFS is a distributed web, a point-to-point hypermedia protocol. IPFS can make our internet faster, more secure, and more open.

From the perspective of IPFS characteristics, IPFS is based on content addressing. The so-called content addressing refers to the use of hash values ​​to uniquely describe the link of the content itself.

IPFS enhances our digital information, making the data resistant to failures of the underlying network, cryptographically protecting it, and making it permanent, where those sharing the data can keep a copy of the information and rely on the same link for permanent storage.
Therefore, storing NFTs based on IPFS can not only ensure the security and permanence of storage, but also give assets the reliability that cannot be tampered with.

NFTs and the Metaverse

NFT can be mapped to specific assets (including digital assets such as game skins, equipment or tangible assets such as land property rights, etc.), and recorded in the marking information in its smart contract, making NFT a tradable entity of digital or physical assets, through The transaction flow of NFT realizes value flow.

NFT realizes a decentralized and universal proof system of digital ownership, which is expected to realize the digitization of services, labor, creation, props and other assets in the Metaverse system, and realize the circulation and transaction of digital assets within the Metaverse. content creator

The produced digital works, virtual plots, game skins, equipment, etc. will become digital assets and be traded in circulation. At the same time, the versatility of NFT allows the digital assets to be effective on other platforms in the Metaverse.

Based on NFT, virtual land and digital art have been realized as digital assets. We believe that with the development of NFT, digital assets under the Metaverse will form a complete circulation and trading system

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/in-depth-analysis-of-nft-industry/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

Like (0)
Donate Buy me a coffee Buy me a coffee
Previous 2022-04-02 23:18
Next 2022-04-03 09:23

Related articles