The price continues to fall NFT’s fig leaf is gone

The single-day transaction volume of NFTs fell from a high of $3.394 billion to less than $15 million, a drop of 99.56%.

According to a report from Blockchain Daily, in the context of the overall downturn in the market, NFT’s last fig leaf, the NFT project that entertainment stars participated in, also dived.

Taking Jay Chou’s Phanta Bear (Phantom Bear) NFT as an example, the floor price has dropped by 96.13% from the high point, and the liquidity is relatively lacking, with a single-day transaction volume of only more than 6,000 US dollars. In addition, the price of The Heart Project, which Edison Chen cooperated with, dropped by 99.49%; the price of ZombieClub Token, which was cooperated by Shawn Yue, dropped by 94.58%.

Returning to the broader market, under the bear market of cryptocurrencies, the NFT sector continued to decline. As of August 15, the total market value of the NFT market has fallen from a high of $36.6 billion in February this year to $23.9 billion, a drop of more than 38%. The single-day transaction volume of NFTs fell from a high of $3.394 billion to less than $15 million, a drop of 99.56%.

According to industry analysts, since the development of NFTs is still in the early stage, the value of most NFTs does not have a recognized measurement standard, so it is very prone to speculation or speculation .

Fried NFT

The NFT must be overheated, and this “heat” is largely copied.

NFT (Non-Fungible Token) is a non-fungible digital asset whose ownership is recorded on the blockchain. The Chinese translation is a non-fungible token, which is irreplaceable, indivisible, and unique. The emergence of NFT has solved the anti-counterfeiting problem in the traditional art field to a certain extent. The ownership and circulation process of NFT artworks are permanently and decentralized recorded on the blockchain. When Internet digital assets are copied at will, and several copies are obtained, others seem to own a lot of digital assets, but in fact they do not own the ownership of the assets. The NFT is securely recorded on the blockchain, the ownership of the asset is clarified, and it is permanently stored and unique. Thanks to the uniqueness, rarity, indivisibility, traceability, programmability and other characteristics of NFTs, NFTs are generally used in avatars, games, music, trading markets, virtual worlds, digital collections, etc.

The concept of NFT was first proposed in 1993, but what really promoted the emergence of NFT was Counterparty, founded in 2014. Based on its creation, Rare Pepes turned the popular meme sad frog into an NFT application. A meme is translated into a meme, which is equivalent to an expression pack, a sentence, or even a video or a moving picture. The large-scale growth of NFT ecology is after 2018. Opensea, SuperRare, Known Origin and Rare Art Labs have established platforms for publishing and discovering digital art, and NFT will be completely out of the circle in 2021, with a price of 69.34 million US dollars. The price is marked by the sale of Everydays: The First 5000 Days at Christie’s.

With the explosion of NFT, domestic Internet giants such as Tencent, Alibaba, and NetEase have entered the NFT digital collection market one after another. Can be described as a fiery. Relevant statistics show that as of May 21, 2022, the total number of domestic data collection platforms has exceeded 421; the average circulation of collections on the second week of May exceeds 100,000; The circulation of collections on 8 major platforms, including Tibetan, Xiaodu, and Qianxun Shuzang, reached 72,362 pieces. At the same time, according to data from Soochow Securities, the total number of existing digital collection trading users in China is about 3 million.

As the saying goes, extreme happiness leads to sadness. The consequence of the expansion of the industry scale faster than the growth rate of new users is that compared with February-March 2022, the market sentiment for digital collections has begun to weaken significantly. The “market” of the platform’s collections began to fall continuously. Many mid-waist platforms could not even support the opening of the second-level transfer, so they “run away”. From this, I also saw the scene at the beginning of the article, the NFT market entered a bear market.

Return to rational NFT

Fu Shengqiang, CEO of Langyuan Universe and author of “Digital Engine” by CITIC Publishing House, believes: “The NFT market has not yet entered the real stock competition, that is, it is in the stage of “false internal volume”, that is, the stage of “false stock competition” .Although the entire market has entered a cold period in the past two months, the industry is still in the early stage, and the early stage will eventually pass. If the denominator and numerator are used to compare platforms and users, the current situation is that the growth rate of the denominator is greater than that of the numerator. The rate of new users entering the game is slowing down. In the next era of division, real users (non-speculators) will grow exponentially.”

However, from the current point of view, the main application scenarios of domestic digital collections are concentrated in the fields of collections, artworks, music, etc., and there is still a lot of room for expansion. Since domestic digital collections have weakened the secondary transaction attributes of products and are more in line with regulatory requirements, the current development is still in the initial stage, because the main purpose and actual value of most digital collection projects are for brand marketing. There is still a long way to go before the entry point for a strong combination of ecology.

At the same time, there are also some related problems and risks in the NFT market, such as platform compliance issues, lack of market supervision, consumer awareness issues, digital collection (NFT) quality issues, market risk prevention and control issues, platform technology storage risks, quantum The impact of computer technology, etc., is precisely because of this, in the environment where the global economy has entered a low-speed growth environment, NFT has been entered into a bear market.

However, in the long run, I still see more NFTs. Wu Junjie, a digital economy researcher at the Blockchain Development Research Institute of Harbin Institute of Technology (Shenzhen), said that NFT digital collections, as a new cultural and creative carrier relying on blockchain technology, are the path and path for the digital transformation of cultural and creative products such as works, handicrafts, and collectibles. one of the ways. With the power of NFT digital collections, a large number of sleeping or semi-sleeping music, videos, collections of cultural relics, art works and other cultural and creative products have gained new blood and radiated new vigor and vitality. At present, domestic digital collections are mainly located in the fields that everyone is familiar with, such as artworks, cultural relics, and music. From the perspective of the 28th Law, there are still a wide range of fields waiting to be developed.

However, the real value of digital collections is essentially to return to the NFT technology behind them. It fills the gap in the current digital property rights field, and enables digital content to be capitalized and circulated efficiently. The market behind this is the real blue ocean. If digital collections want to truly develop in China, they need health compliance and industry attention, as well as an attitude of actively embracing supervision and co-construction with a broader mind from the regulators.

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