The blockchain industry has experienced rapid development and changes in recent years: from the budding in 2017, smart contracts in 2018, to DeFi in 2020, NFT is undoubtedly the hottest topic in 2021.
NFT made its debut in 2015, the first batch of projects was launched in 2017, and 2021 will usher in rapid growth. In the first half of 2021, the total market value of NFTs will be US$2.5 billion. In July alone, sales soared to $1.5 billion. However, in the second half of 2021, the NFT market gradually calmed down.
Different from cryptocurrency, central bank digital currency, stable currency, etc., which can be used regardless of denomination, flexible spending and change, each NFT is a unique, indivisible and irreplaceable existence, so it has become a new development that carries the value and transaction of digital art. medium.
The initial main application scenario of NFT is virtual collection. Because the use of NFT to encode artworks is in line with the scarcity of artworks, it is very valuable for collectors, artists and creators. Due to its uniqueness and the emergence of more use cases, this year NFT has developed into a way for some people to display their wealth and identity. In the future, NFT may also expand into a wider range of applications in more fields, gradually expanding from art investment to a wider range of streaming media, real estate, loan collateral, etc.
Looking forward to 2021, what new use cases will NFT have developed, and which use cases may be taken to the next level in 2022? Let’s explore together.
NFT function: art
NFT art is often referred to as “Cryptoart” and is one of the fastest growing NFT market segments. Painters, designers, musicians and more people create NFTs through the blockchain-based casting platform to better control their sales.
SuperRare is a social network platform for art creators and collectors supported by blockchain technology. Creators can create digital artworks and tag them on the Ethereum blockchain. Thanks to smart contracts, collectors can buy and trade artworks, and their royalties can be returned to creators.
Rarible is an open source, non-custodial platform for users to mint, sell, and create collectibles. Any user can create and display their own artwork, or use Ethereum to purchase artwork for collection. The user owns the ownership and intellectual property rights of NFT. Buyers and sellers can trade on Rarible at almost negligible cost.
Pixlr Genesis is developed by Pixlr, the world’s best online image editor, and aims to build the world’s largest decentralized virtual museum. The goal is to rival the Louvre, MoMA and the National Gallery. The Pixlr Genesis ecosystem will include five modules: “Gallery”, “Auction”, “Casting”, “Masterpiece” and “Community”. Since its launch, Pixlr Genesis has issued 2000 unique NFT “passes” out of 10,000, generated by AI algorithms. From the perspective of art collection, each “pass” represents a unique piece of art; From the perspective of art display, the “pass” represents the right to display your NFT artwork in the virtual museum. In addition, Pixlr Genesis will also support art creators to build a bridge for artists to integrate with the community by issuing NFTs in cooperation with well-known artists.
NFT function: collectibles
Physical collectibles may increasingly become a thing of the past, because Ethereum provides a simple and feasible way to make high-quality digital collectibles, including native NFTs or NFTs related to real-world collectibles.
As the first batch of NFTs, CryptoPunks was launched in the summer of 2017. This is the first NFT project released through Ethereum and paved the way for the ERC-721 token standard that has dominated the NFT ecosystem so far. . There are only 10,000 punks, classified as aliens, apes, zombies, and humans. They are rare and exquisite collections. CryptoPunks is the originator of NFT and is widely regarded as the starting point of the “Encryption Art” movement. The known leading payment company Visa, Meitu’s chairman Cai Wensheng, Hong Kong actor Shawn Yue, and TRON public chain founder Sun Chenyu are all cryptopunk NFT holders.
Bored Ape Yacht Club
Bored Ape Yacht Club (boring ape) is issued by Yuga Labs, a US Web3 company. The algorithm generates 10,000 Bored Ape Yacht Club, providing users with a wealth of choices and diversified features. The characteristics of each ape are randomly generated, so each ape has a unique background style, clothing, earrings, eyes, mouth and fur. Known famous rapper Post Malone, well-known host Jimmy Fallon, famous investor Mark Cuban, legendary hip-hop producer Timbaland, NBA legendary star Shaquille O’Neal, etc. are all holders of the Boring Ape NFT.
NFT function: game
Blockchain games powered by Ethereum are moving towards the future of “Play-to-Earn”. Players play games, earn more assets, and can trade in the process. NFT, as a form of ownership of game items, plays an important role.
Axie Infinity is a Pokemon-like NFT game. Users can collect, cultivate and fight iconic Axie monsters through tradable and sold NFT game assets to gain glory and profit. Axie Infinity is not only the largest Ethereum game, but also one of the most commonly used applications of Ethereum. As a pioneer in the field of blockchain “golding”, this summer fired the first shot of the NFT and GameFi frenzy, which also enabled blockchain games to enter the stage of frenetic development in the past few months.
Sorare is an emerging fantasy football game that has made significant progress through cooperation with some of the world’s largest professional football franchisees. Players use digital trading cards to create a fantasy team, and then face off in the game to see who is the best football manager. The game runs on Ethereum, and every player card is NFT. As of the writing, Sorare has been officially authorized by 215 football clubs around the world, including Real Madrid, Juventus, Bayern Munich and other well-known teams.
NFT function: Metaverse
Since Facebook announced last month that it will focus on the development of the Metaverse field and renamed it to “Meta”, there has been a “Metaverse” craze around the world, and many global giants including Microsoft and Disney have also announced Invest in the construction of the Metaverse. It can be said that the Metaverse is composed of NFT, which clarifies the ownership of items in the virtual world, ranging from land and houses to clothes. As long as it can be privately owned by users, it can be cast into NFT. In turn, Metaverse has also created a new application scenario for NFT.
The virtual land/house, which is an important item of the encrypted Metaverse, is constructed in the form of NFT. Users can invite other players to help “develop” your land, or lease it to creators for profit.
Decentraland was originally created in 2015 and launched its beta version for the first time in 2017, and gradually became one of the most powerful projects in the Metaverse in the NFT wave of 2021. Users can buy land, visit buildings, walk around or meet people in it. Decentraland has become a popular gathering place for the Metaverse of the crypto world. It is worth noting that the Caribbean island nation of Barbados (Barbados) Ministry of Foreign Affairs and Foreign Trade has signed an agreement with Decentraland to establish a digital embassy.
Sandbox runs on the Ethereum blockchain. Players can freely create their own virtual world, use their creativity and imagination, and customize it according to their own wishes while cooperating with others. Sandbox has launched P2E activities, in the virtual world, players can spend time completing a series of tasks to earn assets. It is worth noting that SandBox received US$93 million in financing a month ago, led by the Vision Fund of Japan’s SoftBank.
Cryptovoxels is a virtual world built on the Ethereum chain. The website has built-in editing tools. Players can buy, sell and build virtual art galleries, shops, and anything the player can imagine. In addition, Cryptovoxels also provides real person avatars and text chat.
NFT function: streaming media
In March of this year, the digital artwork “Every Day: First 5000 Days” by crypto artist Beeple was sold at Christie’s for a price of more than 60 million U.S. dollars, which made NFT instantly popular in the art circle, and some musicians and artists joined in one after another.
OpenSea is the most popular NFT market and NFT casting platform. Artists can cast on multiple chains, including Ethereum and Polygon. File types supported by Opensea include MP3, MP4, and WAV.
“Music NFT is changing the way fans connect with their favorite artists. From 3LAU to Imogen Heap, all kinds of creators are innovating on the blockchain, and in an industry that underserved independent creators , The desire for change is obvious.”-Opensea
Royal is an NFT music platform that was only established in May. The seed round in August raised US$16 million, with the participation of top institutions such as A16z and Coinbase. Royal’s business logic is very clear, that is, let musicians produce and sell NFT works, and then fans can get royalties on future works after purchase. The founder of Royal is DJ producer 3LAU. At the end of October, an experiment was conducted: 333 NFTs were released for 3LAU’s new single “Worst Case”, which accounted for 50% of the single’s streaming media ownership. It is worth mentioning The thing is, this song is now over 3 million plays per month.
Async Art is a music/art creation platform built on Ethereum. Async Art’s work is composed of two parts: “Master” and “Layer”. Master is the main form of the work. A Master can be composed of multiple layers. The artwork can be changed according to the “layer change”. For example, an artist can create different states for a painted sky through layers, so the work can show different states such as rain and sunny days. After applying to become an Async artist, the creator does not need any programming knowledge, just cut the work into layers during the upload process. In the sale of works, creators can set “Buy Now” or “Open Auction”, and the auction end time is determined by themselves.
Audius is a decentralized music sharing platform based on the Solana blockchain, which aims to remove the intermediate links and extra costs of music streaming services, allowing artists to directly get their own work’s due income share. Specifically, users of the platform can use tokens to unlock music, or they can earn tokens by watching ads to unlock it. When users listen to songs in this decentralized music library, the wallet will automatically pay. Among them, about 85% of the proceeds go to artists. The remaining part is obtained by the song provider and the development team.
NFT function: publishing
Mirror was founded by former a16z partner Denis Nazarov, similar to the article blogging platform Medium, which helps creators crowdfund by providing creators with token issuance tools. The main functions of Mirror currently include publishing articles, NFT collections, auctions, crowdfunding, revenue distribution, voting, etc. It is worth noting that the function of publishing articles. If the NFT option is checked, after the article is published, many entries will be automatically generated in Editions, which can be understood as the NFT of the article. These items can only be viewed when a user purchases them, otherwise they are basically blank when they are clicked. In addition to the NFT when publishing articles, users can also manually create other types of NFTs in Editions, including image and video formats. The advantage of creating NFTs is that they can be directly embedded in articles for sale, forming a closed loop between content creation and NFT sales.
NFT function: public utilities
In the early days, NFTs were usually associated with traditional media types, such as art, music, game assets, etc. But now NFT can be used to mean anything, including domain names. It is expected that such use cases will proliferate in the coming years.
The Ethereum Name Service (ENS) allows Ethereum users to create and manage decentralized domain names on Ethereum. These decentralized domain names are minted as NFTs, such as ethereum.eth. Compared with long alphanumeric addresses, wallet management through these NFTs becomes quite simple.
In addition to ENS, Unstoppable and Handshark are also worthy of attention.
According to the forecast of ReportLinker, the number of domain name projects is expected to reach 512, and the number of registered domain names will reach 3 million by 2027. If NFT domain names can occupy 5% to 10% of the market share, then the entire NFT domain name market will grow more than twenty times more than today.
NFT function: DeFi+NFT
In the encryption ecosystem, the two most dazzling stars are NFT and DeFi. In the past year, we have seen more integration and innovation of NFT and DeFi.
NFTX (NFT fragmentation)
NFTX is a platform to create a liquid market for NFT, and it is also a representative project of NFT fragmentation. Users can deposit their NFT in the NFTX vault and mint a replaceable ERC20 token (vToken), which represents the assets in the vault. Usually NFTs lack liquidity and are difficult to price, but NFTX makes the NFT market simpler, including creating an instant liquid market for newly created NFTs. In other words, the issuance of NFT is pledged to a pool, and then the corresponding ERC20 token is issued. Fragmented NFT improves transaction liquidity and will also bring out the value of asset liquidity.
NFTfi is a NFT mortgage lending platform. NFTfi can meet the borrowing needs of users and the liquidity needs of NFT assets. It can be said that it is at the forefront of NFT+DeFi. The principle is like a typical pawnshop, except that the traditional pawnshop is one-to-many (organization to multiple mortgagers), while NFTfi is many-to-many. Borrowers put their NFT assets on the market as collateral, and then the lenders in the market will quote (loan amount, loan period, and total amount of repayment at maturity). The borrower finally chooses which loan to accept, and then will receive wETH or DAI from the lender. At the same time, the borrower’s NFT will be locked in the NFTfi smart contract until the borrower pays off the loan within the maturity date (the loan period ranges from 7, 14, 30, and 90 days). If the loan is not paid off before the due date, the lender will get the borrower’s NFT.
At present, Ethereum is still the leading NFT blockchain because it carries the largest number of projects. The public chains WAX and Flow focusing on NFT, the Layer 2 solution ImmutableX focusing on NFT, and the emerging public chains BSC, Solana and Polygon are also worthy of attention. Despite its dominant position, Ethereum’s transaction fees are still a long-standing issue. As we all know, the transaction fee of Ethereum is much higher than that of other blockchains. The transaction cost of BSC is approximately US$0.45, Flow is US$0.02, and Polygon is US$0.0001.
Top NFT game studio
DapperLabs: Developed the NFT game-CryptoKitties (crypto kitties), which was once popular in the entire crypto industry. This game once caused congestion in Ethereum. In order to avoid the high transaction fees of Ethereum, DapperLabs has established a public chain Flow focused on NFT. In addition, the NBA Top Shot series NFT jointly produced by the studio and the NBA official is also deeply loved by fans.
Animoca Brands: is a game development company located in Hong Kong. Since the beginning of 2017, Animoca Brands has been actively involved in the blockchain. In addition to various large-scale expansion investments, it has also quickly established various cooperations. Currently, the blockchain games under Animoca Brands include Metaverse The Sandbox, casual game platform GAMEE, 3D action game Phantom Galaxies, and racing simulation game REVV. It is worth mentioning that the company has also developed a NFT collectibles market called Quidd, with partners including Disney, Marvel, HBO (Game of Thrones), CBS (Star Trek) and NBA.
Governance DAO: Governance DAO refers to the use of tokens to decentralize project governance rights to the community, so as to achieve community-driven and decentralized governance. Coin holders can propose, vote, and govern the project. At present, there are mainly NFT trading platforms Rarible and Mintable, index fund protocol NFTX, and Metaverse Decentraland.
Investment DAO: Investment DAO (Venture DAO) is the main type of integration between NFT and DAO at this stage. The main logic of this type of DAO is that community members make joint decisions, invest, hold or release NFT art collections. At present, there are mainly JennyDAO, Whale, PleasrDAO, etc.
Collectible DAO: Collectible DAO mainly refers to a group of people who purchase the same NFT collection to form a community with a specific identity consensus and sense of belonging. The NFT they buy symbolizes their identity, and the Collectible DAO is more like a club , Bored Ape Yacht Club, Bored Ape Kennel Club, Cool Cats, Meebits, Wicked Cranium all belong to this type.
NFT is a very young field in the crypto industry. With the passage of time, transaction volume, asset liquidity and the number of new users are rapidly expanding. It is estimated that in 2022 there is still potential for rapid development of Metaverse, fragmentation, streaming media and other use cases. . With the emergence and maturity of more use cases, the NFT ecosystem is expected to be able to enter the vision of crypto investors more widely.
As one of the most direct connection and perception integration points between blockchain and valuable objects, NFT is expected to continue the “out of the circle” craze. In real life, game accounts, original music, videos, figures, and even real estate can be classified as non-homogeneous assets. Already, many innovative companies or individuals with big brains have begun to use blockchain technology to issue these tangible assets on the chain to achieve more convenient circulation.
NFT is no longer just a speculative industry; similar to DeFi, it is now an industry that can create value. Compared with the traditional art market, NFT’s market share is still negligible. This year, NFT is widely used in digital art, so what extraordinary milestones will NFT usher in in the future? Only time will tell.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/nft-ecosystem-review-of-the-current-situation-in-2021-and-prospects-for-the-future/
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