NFTs
Are NFTs still alive and will NFT.NYC be back in 2025?
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This year’s NFT.NYC was different. Since its launch in 2019, NFT Enthusiasts and industry participants gathered here to learn more about the latest trends and innovations in the space. The event is all about celebrating the impacts and potential of NFTs with a clear mission to drive widespread adoption. As such, the level of excitement and investment surrounding the event can be seen as a barometer for the state of the NFT scene — and this year’s event was a smooth one.
Much less capital was spent on activations and booths, and the show floor felt quiet — even more so than the 2023 event, which was notably quieter than 2022. There were still some interesting projects there, but the energy was lacking and it felt very different from the excitement and conversations I’ve had at recent events like Token2049 Dubai and GDC.
Are NFTs Dead?
In 2021, NFT.NYC was a remarkable spectacle that was dubbed “Crypto Coachella” It is “Super Bowl” of the NFT world. Driven by immense excitement and anticipation, it has attracted attention from all corners of the globe with its dazzling celebrity endorsements, extravagant marketing campaigns, and eye-popping multi-million dollar art sales that lit up billboards in Times Square. The event reflected the thriving market by trading volumes emerged to $17.6 billion. That said, this era also reflected speculation and blind pursuit of profits that led many users to be burned by the greed of bad actors and projects that lacked substance.
So does this shift mean that NFTs are dying? Not at all. This year’s event reflects a shift for the better in the crypto industry. NFTs have come of age: no longer a speculative fad, they have been subsumed into the broader verticals of the crypto industry, negating the need for an NFT-focused event; people have moved on to discussing tokenization in gaming, finance, property, and more. NFTs no longer need to build their own infrastructure; instead, they can leverage the robust systems and scalability offered by established crypto ecosystems.
Changing tides
What changed? The NFT market crashed during the crypto winter of 2022. Digital collectibles, as a use case, reclaimed the term ‘NFT’ and became the only application on everyone’s mind when they think of ‘NFTs’. Its association with “expensive digital pictures of monkeys” and overpriced JPEGs gave the industry a bad name. Without the aggressive speculation that once drove them, digital collectibles are no longer as popular; the feverish buzz around collectible NFTs has died down.
Total number of sales involving NFTs in the art segment worldwide | Source: Statist
According to StatistNFT sales volume in the art segment declined by over 30% from April 2021 to April 2024. The slowdown in October 2023 saw the NFT market experience a significant decline, causing floor prices to plummet, marking an 83% increase decline from its peak.
Maturation of the NFT market
The purpose of NFTs has changed, and we need to reclaim the term, moving it away from collectibles and toward practical use cases.
One of the most exciting is the tokenization of financial and real-world assets. By December 2023, the Total Value Locked (TVL) in tokenized RWAs exceeded $6.5 billion. The financial sector is leading the way in RWA adoption with the tokenization of financial instruments. This year, we saw players like Blackrock and Franklin Templeton pushing the button.
People are also excited about the prospect of asset tokenization to represent property assets, including real estate, art, stocks, and more. Think about dividing a real estate asset into tokens. Fractional ownership of property is now feasible. For example, if 1,000 tokens represent 1% ownership each, investors can engage in trading of these tokens on blockchain platforms, thereby improving liquidity and streamlining ownership transfer processes.
In gaming, NFTs have redefined digital ownership, allowing players to truly own virtual assets like characters and weapons. These NFTs can be bought, sold, and traded on vibrant marketplaces, generating real value—particularly when “dynamic” NFTs are used, allowing players to upgrade their items as they are used in-game. Cross-platform compatibility adds to their appeal, allowing for seamless transfers between games (although there are other challenges to be solved in this area before it becomes mainstream).
The shift from hype and speculation to integration within the broader crypto space serves as clear evidence of the maturation of NFTs. This transformation brings tremendous advantages, such as leveraging existing infrastructure, scalability, and fostering collaboration and innovation. As NFTs continue to diversify and find new applications, their role within the crypto space will solidify. The future of NFTs is full of promise, as their sustained growth and integration pave the way for a thriving ecosystem.
Alun Evans
Dr. Alun Evans Alun is a co-founder of LAOS Network. With over 20 years of experience leading and designing games and technology companies, Alun is well-versed in creating innovative products that address experiential and developer challenges. In addition to his stewardship of LAOS Network, he is the CEO and co-founder of the company that is building LAOS, Freeverse, which focuses on building scalable blockchain infrastructure. Alun also led Shar3d.io, a pioneering company that enables collaborative 3D web applications, and served as CTO of Bodypal.com, a virtual clothing services company. He holds a PhD in Medical Physics from University College London.