The public's understanding towards NFT may be more based on the incredible myths created by NFT. Those who play NFT must be familiar with Mr. 703. In 2017, they applied for more than 730 crypto-punk NFTs for free. So far, 6910 ETH has been earned from this, and they still have nearly 270 crypto-punk NFTs in their hands. What other shocking deeds of NFTs? Uniswap auctioned a pair of socks for $160,000, and the founder of Twitter auctioned $2.5 million for 5 words. Is this surprising? Also, on March 11, 2021, a NFT digital artwork "Everydays: The First 5000 Days" created by the artist Beeple was sold at Christie's auction house for a bid of more than US$69 million. More and more peoples interested on NFT, NFT has indeed become popular in all circles.
2021 is known as the "first year" of NFT,The emergence of NFT essentially reduces the verification threshold before the transaction, thereby the trust cost in the transaction is reduced to a very low level, while fully releasing the liquidity of its value, at the same time, it also guarantees the scarcity of its value in the transaction. So what is NFT actually? The full name of NFT is Non-Fungible Token, which also is non-homogeneous tokens. Artworks, tickets, domain names, etc. can all be NFTized and are unique. There are no two exactly the same NFTs, which provides NFTs with good collection value.
Different from cryptocurrency, in cryptocurrency, you have one bitcoin and I have one bitcoin. These two bitcoins are essentially the same and can be exchanged with each other. Each NFT is unique, which means the value of each NFT are actually different. The directions for obtaining NFT include independent creation, participation in the primary market issuance of NFT, acquisition from the NFT secondary trading market, participation in NFT airdrops, etc.!
NFT ecological classification:
In terms of functional attributes, NFT ecological applications can be divided into four layers: basic infrastructure layer, project creation layer, transaction circulation layer, and derivative application layer.
The Trend of NFT Development :
- Digital Artwork
One of the most well-known of NFT is to allow artists to use tokens to represent the ownership of their digital artworks, which can greatly enhance the liquidity of artworks. Nowadays, the online art market is centralized, the operation process is not transparent, and the platform take a lot of profit from it. Artists have to pay huge fees to put their works on the platform, and they can only blindly trust that the platform will display and distribute their works fairly. With NFT, artists can easily sell their digital art pieces and get income from selling NFT on the secondary market. This is a sustainable economic model. As the most popular example we mentioned early, Beeple adopts the popular ERC721 certificate standard to directly realize the digital artwork and prove the ownership of the official version through encryption technology. In addition, thousands of digital artworks are also sold through the issuance of NFTs, benefiting artists from all over the world.
- NFT Financialization
With the maturity of the main blockchain infrastructure and the more exposure and understanding of NFTs, NFT platforms and projects are becoming new investment. Driven by the record of auction prices for artworks by artists such as Beeple, more and more funds flowed into NFT, related companies and projects. According to incomplete statistics, in the first half of Year 2021, more than $1 billion of funds flowed into the NFT industry. In the latter part of the third investment cycle bull market, although the overall market is not good, but there are still many large investments. On March 2021, Dapper Labs announced the completion of a US$305 million financing, which is the largest financing in the NFT field this year. On July 2021, OpenSea, the world's largest NFT market, raised US$100 million in Series B financing, with a valuation of US$1.5 billion. Blockchain game and NFT developer Animoca Brands raised US$139 million.
- GameFi
The combination of NFT and DeFi brings out Gamefi and it brings unlimited surprise for NFT. In the middle of the year, the sales of the NFT game Axie Infinity soared. According to CryptoSlam data, as of 7th August, the cumulative transaction of the NFT game project, Axie Infinity exceeded $1 billion, became the first ranking in the NFT market in terms of transaction. The rapid rise of Axie Infinity drives the development of the entire NFT market sector. Axie Infinity uses an innovative game earning ecosystem to incentivize players to expand the potential market for NFT games, bring more players into the encrypted ecosystem, and increase their participation. The biggest difference between "Play-to-Earn" and the traditional Internet game "Free-to-Play" is users could receive corresponding rewards and earn income by participating in game. The time and labor paid are also assets, which are part of personal wealth. When the game becomes a bridge linking on and off-chain, this value can be reflected in reality.
The Prospect of NFT Development:
- Decentralized NFT
At present, there are still many problems on the storage of NFTs, and most of the NFT trading markets have not yet been completely decentralized. Although NFT itself is stored on the chain, but due to the size of the files are too big and cannot be stored on the chain, the relevant pictures, videos and other files corresponding to the NFT are still stored off-chain, but the hash value data of these files is stored in the NFT token. This could be a great hidden danger for NFT holders. Therefore, decentralized storage has become the important issue to be concerned. Now, decentralized storage systems such as Arweave and IPFS are more closely linked with NFT, we could continuosly focus on their future development.
- Diversification of NFT
The interset of public towards NFT product market will be increasing day by day, there will be more famous musicians, artists and athletes join this craze. In addition, people are selling NFTs for charity and reselling artworks for millions of dollars. Diverse types of projects and events could be created on NFT market. The key here is that any project that wants to stand out must have a unique product or solve NFT-related issues.
- More real and physical assets on the chain
The main meaning of NFT is to provide an on-chain channel for real-world items and act as a bridge between the physical world and the blockchain world. In addition to the existing game props, art collections and other applications, in the future, more physical assets such as real estate and copyright can be chained and exist in the form of NFT. Besides, NFT can also be seen as a chain process of real hobbies, such as movies, music, drama, fashion, etc., and the gameplay will be more diverse.
The core implementation of decentralization is to put assets on the chain. The storage of assets on the chain is a prerequisite for trust and fairness. Same goes to NFT, the technological breakthroughs in the more distant future may bring the application scenarios of NFT to a new heights. In the future, the potential development of NFT may focus on meta-universe, oracle, and social display. As our demand for asset ownership and property rights continuesly rise and develop, more disruptive experiments will occur in NFT.
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