This content originally appeared on Level Up Coding - Medium and was authored by Dmytro Spilka
Following a wild second half of 2021, and strong trading volumes flowing into 2022, the market for NFT artworks like Bored Ape Yacht Club, CryptoPunks, and Pudgy Penguins has been embarking on a steep decline as widespread market downturns have impacted the value of tokens.
According to data from DappRadar, NFT monthly sales have run below $1 billion for the first time since June 2021. Meanwhile, the world’s biggest NFT exchange, OpenSea, has recorded a fall in sales volume of 75% since May, and is seeing trading volumes akin to July 2021.
On top of this, the prices of the market’s most popular non-fungible tokens have also fallen. Bored Ape Yacht Club (BAYC) has seen its heavily sought after collection fall some 63% in volume over the past month, with sales also falling 15%.
(Image: BeInCrypto)
BeInCrypto research has shown the scale of the market decline. According to the cryptocurrency news platform, the total volume of cryptocurrency marketplaces stood at $4 billion for the month of May 2022. This represents a swift and heavy pullback from the $7.18 billion recorded in April of the same year.
Leading marketplace, OpenSea drew in the highest volumes over this period, contributing $2.6 billion, whilst other leading platforms like LooksRare, Magic Eden, and Solanart also contributed.
Just like stock trading platforms, these NFT marketplaces are digital platforms that are widely used for the buying and selling of tokens. Although there’s a growing range of cryptocurrency wallets that are provided by some of the world’s leading exchanges that allow the storage of NFTs, most users keep their non-fungible tokens stored on their favorite marketplaces.
To further understand the scale of the decline, in January 2022, total NFT sales volume stood at $16.57 billion, with a spike in LooksRare activity driving the surge in activity by contributing $11.1 billion alone. In total, May 2022’s volume was $12.57 less than January, representing a 75% decline — and June’s volumes are set to be reported as even lower.
A Future Built on Utility
Despite the widespread downturns in NFT trading volumes, not all investors are turning bearish over the future of non-fungible tokens. Although there are plenty of questions that can be raised surrounding the sustainability of NFT-based art collections, there’s far fewer doubts surrounding the potential of utility-based tokens and their role in the future of technology.
Speaking at Global Rockstar’s Sandbox Summit Web3 special conference in June, company CEO Christof Straub gave a presentation in which he claimed that NFTs can pave the way for artists “to monetise unreleased content; to revive catalogues; to build stronger fan engagement; and to make processes more efficient through technology.”
“NFTs mustn’t [just] be JPEGs as we all know. They can contain real value,” Straub added, before highlighting that the sale of NFT music rights can deliver more fairly proportionate royalties to musicians.
“We believe 100% that music NFTs are here to stay: if they contain real value; if they are solving real problems; if they are trusted and legal; and if the models that stand behind the platforms are fair and sustainable.”
The music industry is just one of many sectors that NFTs can help to revolutionize. Evidence suggests that market sentiment is steadily beginning to turn increasingly towards tokens that possess more utility than the artworks that we’ve become accustomed to seeing throughout social media and beyond.
(Image: CryptoSlam!)
Whilst the biggest names across the NFT space still dominate much of the charts in terms of volume, we’re beginning to see more utility-based projects emerging as leading figures among the space’s top 20 collections.
Away from Bored Ape Yacht Club and Cryptopunks, we can see the presence of NFT-based games, like Otherdeed, Sorare, and NBA Top Shot populate the top of the rankings.
With NBA Top Shot, users can take basketball trading card games to a digital frontier by swapping video NFTs of players in action. The concept has already spread to the NFL and UFC, with similar projects arising in the non-fungible landscape.
Meanwhile, Sorare stands as an example of how NFTs can support a brand new way of playing fantasy football, whereby players buy and swap trading cards in order to create a 5-player team that wins prizes based on each player’s real-life performances.
In September 2021, Sorare raised €579.7 million in one of Europe’s largest-ever Series B fundraising rounds to attain a valuation of around €3.6 billion. The platform even recently announced that it intended to branch into Major League Baseball to further expand its utility across the world of sport.
Such strong indicators of growth show that there’s likely to be a bright future ahead for the world of NFTs. Although the value of art-based collections like BAYC and CryptoPunks may be called into question as markets become ever-diluted by new limited collections, the potential for NFTs to become intrinsically linked to tangible utility like online gaming, music and arts, and even corporate reward schemes among many other prospective use cases shows that the industry certainly has a bright future ahead.
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Life After Punks and Apes: Why NFTs Have a Bright Future Away from Collectible Art was originally published in Level Up Coding on Medium, where people are continuing the conversation by highlighting and responding to this story.
This content originally appeared on Level Up Coding - Medium and was authored by Dmytro Spilka
Dmytro Spilka | Sciencx (2022-07-03T16:24:05+00:00) Life After Punks and Apes: Why NFTs Have a Bright Future Away from Collectible Art. Retrieved from https://www.scien.cx/2022/07/03/life-after-punks-and-apes-why-nfts-have-a-bright-future-away-from-collectible-art/
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