Crytocurrency

Bored Apes is declining, but the NFT market will soar.

In recent months, there is no doubt that nonfungible tokens (NFTs) have suffered. Market circumstances have deteriorated, fraud and hacking are prevalent, and the number of low-quality projects continues to rise, prompting many to doubt the usefulness of NFTs and their role in Web3 as a whole. This year, floor rates for even famous projects like the Bored Ape Yacht Club have dropped below $100,000.

During the last crypto cycle, NFT market conditions were highly associated with and dependent on the crypto market as a whole. As the value of technology and digital assets increased, it became simpler for people and investors to justify gambling on the emerging NFT asset class, frequently paying extravagant premiums in the belief that some use and value may be obtained in the future. Combined with the fact that, by their very nature, NFTs are relatively rare and illiquid, this created the ideal conditions for a meteoric rise in price followed by an equally meteoric decline.

 

Changes in the ecosystem, like rampant fraud and too much content, also affect how the market works. This causes a lot of worry for people who are already in the field and makes consumers and businesses hesitant to get involved.

 

We must recognise that this is a natural aspect of the growth of the NFT space. Over-hypothesizing followed by reality-checking conflict is not only to be anticipated but vital for us to take action and resolve the existing difficulties so that these digital assets can continue to blossom and expand.

 

Related: Eminem and Snoop Dogg’s VMA performance drew mixed reviews.

 

Scams and hacks are obviously detrimental to projects and consumers in the NFT arena. No artist should have their work replicated and sold under another’s name, and no purchaser should unintentionally fall victim to fraud or theft. Projects should not be concerned that a hacker may use infrastructure flaws to steal enormous quantities of money. In addition, early backers should not worry that project leaders may run out of working funds or leave the product in the early phases of the roadmap.

My assessment of today’s NFT market activity is… pic.twitter.com/iDjrJeQdMt

August 22, 2022 — Peter Smith (@OneMorePeter)

However, these security breaches do show where the system’s weak areas are, allowing us to work harder towards repairing them and preventing future occurrences. They also demonstrate that blockchain initiatives must prioritise infrastructure and security partners in order to achieve long-term success and minimise future financial losses. In addition, businesses and initiatives must consider how they can effectively secure users from within. OpenSea and MetaMask are making the necessary efforts to harness open-source technologies and build their own security-enhancing features.

Whereas frauds and hacks generate mistrust and uneasiness, the proliferation of low-quality initiatives has contributed to the oversaturation of the NFT industry as a whole. People are weary of hearing about non-fungible tokens that lack either aesthetic merit or actual function. When there are too many products on the market, it’s hard to tell if a project or collection will make money.

The bright line is that the market decline is eliminating some of the lower-quality NFT ventures. Projects will have to keep their promises, change their strategies to stay competitive, and reach out to their customers better.

 

Related: In order to raise $87 million, MoonPay gets Hollywood’s rich and famous to help.

On OpenSea, use, volume, and transactions have decreased. The source is DappRadar.

Initially, markets will need to begin curating artwork to ensure that the top quality works are not overshadowed by the large number of NFTs and duplicates that are being sold. They must also better conform to growing copyright and intellectual property norms. In order to be successful in the long run, projects that are not only focused on digital art will need to provide genuine usefulness to customers or other enterprises. Utility could come in the form of ownership rights, exclusive memberships, incentives that can be redeemed, or access to networks of people with similar interests.

And perhaps most importantly, we have only just begun to scratch the surface in terms of the complete potential and quantity of application cases for NFTs. This highly disruptive token standard can and will enable digital ownership rights of valuable assets in a safe and efficient manner. Some of the interesting things that could happen with financial goods, medical information, real estate, and intellectual property are ticketing for events and travel, permanent forms of identity, and digital domain standards.

A targeted phishing attack captured $438K in bitcoin and NFTs from a compromised Beeple account.

The obstacles we face will be overcome, resulting in a healthy ecosystem of robust enterprises that will radically transform our lives. In addition, McKinsey & Company anticipates that the Metaverse will likely be worth $5 trillion by 2030. Guess what the Web3 metaverse’s building blocks are? NFTs. As a result, it’s no surprise that another study predicts the NFT industry will be worth $230 billion by 2030.

As such, NFTs will function as digital identity or tickets for Metaverse events; as proof of attendance or payment; and as proof of ownership for games, wearables, or digital real estate since they reflect digital ownership that is both immutable and readily transferable. NFTs will underpin all operations within the Metaverse’s new digital economy.

NFTs are building the groundwork for the next generation of innovative goods and services. Even though this industry is still young and has growing pains, one thing is clear: NFTs are here to stay.

Related: Why do cryptocurrency inventors want anonymity?

Anthony Georgiades is the co-founder and chief executive officer of Pastel Network, a Layer 1 blockchain for NFTs and Web3 technologies. In addition, he is a general partner at Innovating Capital, a technology firm specialising in disruptive startups and digital assets. He was once a member of the investment team at First Round Capital and the operational teams at other businesses. He studied finance, business, and computer science at the Wharton and engineering schools of the University of Pennsylvania.

The author’s views are their own and do not necessarily represent those of Asian Trade. This post is meant to give you some basic information, not legal or financial advice.

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