After more than three years of foundation and development, the NFT ecosystem continues to expand with a greater number of components. This has resulted in a dramatic increase in market size. In their short history, NFTs have burst into the world of cryptocurrencies, with trading volume exceeding $17 billion in 2021, according to CNBC. This amount is expected to reach $147 billion by 2026.
So far, the market is growing mainly due to collectors; but this is changing, as NFT tokens will soon become a part of our everyday lives. The verifiable uniqueness of tokens, coupled with the transparency and security of the blockchain system, can lead to the transfer of documents, diplomas, contracts, and more to the NFT format, which has been dubbed NFT 2.0.
In this article, you will get acquainted with the current state of the NFT market, find out what evolution is taking place, and what NFT 2.0 is. We have also selected several cutting-edge NFTs on NEAR blockchain, which we’re sure you will be interested in reading about!
What does the current NFT market look like?
NFTs have undergone significant changes since their inception. For example, CryptoPunks, which could be minted for free in 2017, gained legendary status when a single NFT sold at Sotheby’s for $11.8 million last year. Yuga Labs, the parent company of Bored Ape Yacht Club, has since acquired Larva Labs, the company responsible for CryptoPunks, for an undisclosed sum.
Non-fungible tokens (NFTs) are becoming more widespread, with celebrities, game developers, and even tech giants participating in related projects, showing particular interest in their potential. However, as stated in Bloomberg, they account for no more than 1% of the entire crypto universe.
According to Messari research, the total value of NFTs is about $16 billion, even though some are worth as much as traditional works of art — millions of dollars. They are part of a larger system of digital assets, mostly cryptocurrencies themselves, and this market is valued at $1.07 trillion today.
An analysis of NFTGo ranked the various NFTs in ascending order of value relative to total market volumes. The most significant share of the cost (46.6%) is NFT-images for avatars across various social networks. Game NFT items were second with a 19.8% share, and collectible tokens were third with a 13.5% share of the total market.
Based on the properties of conventional NFTs, smart NFTs, (also called NFT 2.0, or AI NFTs) represent a growing trend with exciting potential not only in the crypto industry. Smart NFTs are considered the future of NFTs due to their ability to create complex tokens. For example, using Phantasma Smart NFT technology, it has become possible to store NFTs inside NFTs.
Essentially, NFT 2.0 has four major properties, including “generativity,” “composability,” “interactivity,” and “experimentalism,” that distinguishes the technology from its predecessor. As each serves its own unique purposes, let’s look more into these attributes.
An important property of NFT 2.0 is its ability to create algorithmic randomness in tokenized digital assets. NFT 2.0 allows you to combine numerous assets (in this case, contents) into a single entity. As a result, an NFT uses algorithmic randomness that is powered by AI to choose which is appropriate for each device when it is sent to or retrieved by that device.
This means that in addition to commercializing the tokenized digital asset, the owner can further explore other options for using NFTs daily. NFTs are now widely used in ticketing, allowing owners to attend events physically or virtually. Not only that, NFT is being used in a variety of industries, including entertainment, film and video distribution, automotive, and many more.
The latest iteration of NFT allows tokenized digital elements to evolve from their original state. Interactivity allows existing NFTs to independently perform modifications made to them and other related NFTs.
By equipping each NFT with smart contracts, they become “smart” and “intelligent” to receive information from users and other suitable sources. The introduction of smart contracts into existing NFT infrastructure allows existing NFTs to be linked and modified in the first place.
This property allows collectors to be creative and explore new possibilities by combining different assets into one. These assets are not limited to other non-fungible tokens, and can also be fungible assets such as cryptocurrencies.
In simple words, NFT holders can expand the usefulness of their existing NFTs by introducing additional digital assets. Thus, unlike the original state, the NFT element will be able to serve multiple purposes, thereby creating an individual NFT package.
Top NFT projects on NEAR
NEAR-based NFT projects play a vital role in the ecosystem. Not only do they expand use cases, but they push these unique digital assets further into the mainstream. Here are several projects that are paving the way for new interesting use cases for NFTs.
Reality Chain is a multi-chain metaverse that will run on the Octopus Network, which is based on the NEAR application network substrate. On its platform, users will be able to take gaming and social activities to the next level with exciting multiplayer features and functions.
Players can take on the role of NFT avatars and interact with NFT furniture, walls, floors, and other in-game assets that can be resold. Voice and text chats are also included to give it a more realistic feel. Players can also stake their native $REAL tokens to start a new metaverse.
The platform recently completed its Metaverse Engine and created a DAO (Decentralized Autonomous Organization) allowing $REAL token holders to have voting rights on project initiatives. Several demos have been deployed, and a full live game will be launched soon, with an upgrade to a 3D engine in the works to improve the game’s visuals.
OP Games is a blockchain-based Web3 gaming platform that aims to change the way you buy, own and trade in-game assets. Currently, gaming platforms tend to monopolize items, locking digital collectibles into their own ecosystem and preventing users from bringing in achievements and skins from other games. The game development process also requires a significant initial investment with very little player involvement.
OP Games fixes this by turning entire games into fractional NFTs. This means that players can own part of the game and co-own the project. Through this co-ownership, players can receive price increases if the game is successful and even shape the game by participating in its DAO. For developers, this model means a revolution in terms of the funding and monetization of projects.
If you want to know more about fractional NFTs, check out our previous blog, The rise of fractional NFTs, which contains a detailed rundown.
Feiyu is a social media platform built on NEAR protocol that allows users to express their creativity by sharing memes and GIFs, creating a new and exciting NFT metaverse. The app contains a built-in meme generator where community members can easily create and share their creations with others, in addition to a huge NFT marketplace. Participation on the platform is done through reward-based rewards such as earning a native token and receiving items in the form of NFTs (skins, weapons, and more).
One of the project’s latest initiatives was the “Pixel Art War”, where members worked together on an artboard to develop their own NFTs via chats. Users can purchase pixels and earn Feiyu tokens as rewards by interacting with the artboard, encouraging collaborative efforts and leveling up the NFT creation process.
NFT 2.0 as a new stage of evolution
The world is just beginning to understand the topic of NFTs, and more and more specialists are showing interest and a desire to understand what role these tokens will play in people’s lives. Web3 developers and investors are confident that NFT technology will continue to transform industries, not just the art world. Many people think that the NFTs will eventually create an entirely new economy. For example, payment cards can move to the NFT sector, and then it will be possible to make payments for goods and services. So it is quite possible that soon every digital wallet will contain documents, certificates, and licenses that we own. The challenge is to convince crypto skeptics of their usefulness.
Our NFT development services can help you build an NFT platform with robust technology. Our development process provides greater customization freedom and allows you to become a leader in Smart NFTs. Schedule a free consultation with our specialist, and we can start creating various cutting-edge digital solutions together!