Non-fungible tokens have gotten the following hype after DeFi from BTC friends
Non-fungible tokens will be the next hype after DeFi
For most of 2021, DeFi managed to grab the attention of inventors and corporations, with critics calling it a bubble. While the DeFi landscape had meanwhile put that concern to bed and sustained a healthy hype, another crypto subsector has proven itself as another potential moneymaker.
Tokens created using this crypto framework, known as non-fungible tokens or NFTs, rely on scarcity and are often sold for hundreds of thousands of dollars. For those unfamiliar with this unfolding renaissance, here is a detailed breakdown of the structure of the NFT framework, what they are used for, and examples of some of the applications that are already benefiting from the technology.
A prime example of applications deriving from this digital asset framework is CryptoKitties, a gamified platform that allows users to create, breed, and sell NFT-based digital cats for real money. Since its launch in 2017, digital cats have sold over $ 35 million. The same success is attributed to Sorare, a marketplace for licensed player digital cards and a growing center for fantasy football leagues. In 2020 alone, Sorare recorded a sales increase of 1000% and worked with around 80 football clubs.
Notably, the NFT model has also fueled the rise of a new form of art market. With a record of over $ 8 million worth of token artworks sold in December 2020, it has become clear that we are on the verge of a critical shift in blockchain trends. With DeFi exploits in 2020, there is little doubt that NFT has the potential to create even more buzz in 2021.
Victor Larionov, CEO of one of the leading blockchain marketing agencies, Priority Token, explains: “The NFT standard implements unique, irreplaceable and non-exchangeable digital assets in the blockchain. This design offers exciting ways to display digital and real objects on the blockchain for seamless ownership transfer and verification of authenticity. “He added,” You can purchase a token that embodies the value and ownership of real estate in California and you can be sure that it will be impossible to replicate. For what it’s worth, there is no chance any other token can question your ownership of such property. “
The most popular uses of NFTs are games, art, collectibles, fashion, virtual assets, identity, and NFT structure. We’ll dig deeper into these niches below.
1. Gaming Without a doubt, the gaming application of NFTs has exposed many of the possibilities of the tokenization standard. While non-fungible items have always been present in the gaming world, it wasn’t until the advent of NFTs that we saw an advanced iteration of an economy based on transferable and infrequent gaming resources. Now players can own weapons, skins and other in-game items directly. Essentially, you can trade them or sell them for real money. Before the advent of tokenized, non-fungible digital assets, games had sole ownership of featured items, even if gamers bought them for a fee. Thanks to blockchain integrations, players enjoy more autonomy with regard to the fate of purchased or earned gaming goods.
Given the historic performance of NFts-based games, it’s safe to say that this emerging economy has the potential to become a mainstay in the games industry. According to Nonfungible.com, Decentraland has facilitated trading in NFTs valued at over $ 35 million. Cryptokitties in particular changed the NFT narrative in 2018 when a digital cat named Dragon sold for $ 170,000.
2. Art Artworld has always attached great importance to authenticity and value. It is therefore not surprising that the concept of the NFT has taken root. With the rarity embodied in NFT, art collectors and artists can impress the authenticity of works of art on the blockchain. Hence, it becomes easier to identify replicas and cheap imitations. This application is even more useful for digital artists who are very vulnerable to copyright theft. This system gives artists a lot of control over their work and a medium for monetizing their talent. You can find that they earn income from sharing, using, and selling their artwork, and create sustainable sources of income. There is no doubt that NFTs will thrive when virtual art becomes a common concept. There’s already an influx of blockchain-based art auctions that resulted in the sale of an NFT digital art collection for a whopping $ 800,000 in December 2020. Collectibles Just as art collections are becoming a mainstay of blockchains, rare items also have a place in digital assets. It is now possible to mark cards, coins, stamps, celebrities and other collectibles on the blockchain. As a result, businesses, especially sports franchises, are trying to capitalize on the monetary value associated with NFTs. It’s worth noting that the NBA and Formula 1 are at the forefront of this paradigm shift. Football teams like Arsenal and Real Madrid already have plans to develop rare player cards. The fashion industry faced a number of challenges arising from the influx of cheap replicas from top designer brands. In light of this widespread problem, major fashion brands have started to implement new authentication systems based on NFTs. The idea is to make tokenized casts of all of their creations. This approach makes it easier for retailers and buyers to determine their authenticity. Louis Vuitton has already made progress in this regard. Likewise, Nike (NYSE 🙂 contributes to the awareness of NFTs in the fashion world with its digital shoe network system. With this innovation, users can breed, trade and even make shoes into real shoes. Virtual Assets The virtual world offers a wide variety of assets that can be tokenized to establish ownership. One of them is crypto domains, which are increasingly reinventing the way we buy and sell internet addresses. These offerings do not meet fungible standards as the developers want users to have full ownership and the right to sell or buy at any time. Identity A wide range of options are available to identity management and certification authorities who wish to use NFT-enabled infrastructures. These organizations can implement identities on the blockchain by assigning unique tokens to individuals or entities. The same application can improve the process of receiving and storing certificates or files listing a person’s educational qualifications or medical details. NFT Structure The ability to develop, transfer, or store unique assets on the blockchain has started to increase the demand for NFTs. This initiative has become a widely used model for programmable blockchain networks such as. With the advent of the ERC 721 token standard, developers or companies can create, issue, and manage NFTs on the Ethereum blockchain.
Victor Lariononov noted, “Although NFTs are indivisible, it is possible to bundle two or more tokens and sell them as a whole. This is thanks to the introduction of another token standard called ERC 998, which enables the combination of ERC 721 tokens. In other words, instead of selling tokenized lots separately, you can sell them all at once. “
Note that NFTs are not limited to the Ethereum ecosystem. This token model is also compatible with other intelligent contract-based blockchain networks including TRON, NEO and.
Final Thoughts As you can see, there are a multitude of ways businesses can take advantage of NFTs.
Victor Lariononov expects that “the usefulness of this token model will fuel the influx of blockchain adoptions on an enterprise basis and establish new paradigms for the ongoing pursuit of global digitization.”
Platforms smart enough to incorporate this framework have a higher chance of success as there is a strong demand for digitized means of owning or verifying assets and NFT is the only viable way to achieve this. As with other promising but emerging crypto sectors, early movers are often the biggest winners.
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