Navigating the NFT space and the future of tokenized assets — Business d’Or
What are NFTs? Why do they exist and are they worth investing in? Talk to an expert to find out more.
From art and music to video and traditional assets, NFTs are a growing space attracting Gen Z investors. NFT trading.
What are NFTs?
Simply put, NFT stands for non-fungible tokens. These digital tokens are created using the same programming process that creates cryptocurrencies. An NFT can be anything like a car, real estate, or digital artwork.
Real Estate Tokenization converts real estate values into tokens. The tokens are then stored on the blockchain for digital ownership and transfer. Each of these divisible tokens represents a portion of your stake in that asset.
In fact, the owner can open an account on the blockchain trading platform and then create an NFT to verify asset ownership.
This data is stored on the blockchain until someone decides to propose an NFT or own the NFT.
Buying and selling real estate in the form of NFTs on public blockchains is in its infancy, but the potential for such a service is enormous.
The troublesome international real estate market is ripe for rethinking and will benefit greatly from the opportunities the NFT market offers.
NFTs and Crypto Winter:
However, the current global economic downturn has had a major impact on the NFT market. Sales are falling along with prices. So what do experts predict about this dynamic transactional space?
Wes Levitt is Head of Strategy at Theta Labs, a leading provider of Web3 blockchain infrastructure for media and entertainment.
Theta Labs recently teamed up with the World of Women NTF to stream the WoW Miami Gala to all WoW NFT holders via the ThetaDrop video portal.
He says: “There are several groundbreaking projects in today’s NFT market that bring innovation and value to users and token holders. However, there are many projects that take less effort to make money from the NFT hype.”
Levitt is right. According to EarthWeb, about 3,200 NFTs were traded every day through 2022.
And the NFT trend could skyrocket. Take a look at the recent gold rush wave that occurred when Cristiano Ronaldo left Manchester United on 15 November 2022.
Google Search data analysis showed that online searches for “Ronaldo NFTs” increased by 206% globally on November 15, when news broke that the soccer player had teamed up with Binance Marketplace to launch his first collection of NFTs.
What can NFTs be?
In theory, Levitt has confirmed that anything can be tokenized as long as scarcity is an important part of an asset’s value.
“Of course, demographic adoption is a hurdle. Properties like CS:GO skins that already have young, tech-savvy demos are generally more likely to be adopted faster than properties like institutional-owned properties.”
Sallyanne Della Casa, founder of GLEAC, an NFT marketplace for education and cryptofintech that enables knowledge sharing among industry experts, says the suitability of tokenization depends on its assets.
“I think the real question is what to tokenize. If you want to permanently tokenize your shoe collection, most likely not. Do you want your driver’s license, passport, home ownership, car and more? Probably so.”
NFT regulatory practices are also in their infancy. But as the trend peaks, so do fraud cases. And because the space is so new, there is little to protect against NFT scammers. Della Casa sees the current downtrend as positive as it is an opportunity for a price correction.
“I hope the fins get tired and leave,” she says, referring to a group of NFT market watchers who are buying assets and selling them quickly for a profit.
During trend peaks, practices misprice many NFTs, causing customers to see their assets rapidly decline in value as the bubble bursts.
These activities and scams have given the NFT space a somewhat risky reputation. Della Casa explains: Another issue for the market is the amount of fraudulent NFTs.
About 80% of Opensea NFTs are counterfeit. It’s amazing. The worst part is finding out the identities of these scammers. No one knows who they are.”
Della Casa also questions the regulatory process of some NFT platforms taking no action when users complain. “Who’s watching Opensea? I’ve reported fake NTS hundreds of times in my collection and nothing happened, so I want to know.”
Levitt agrees, but says the issues affecting NFTs are similar to those in the crypto space. The overall user experience doesn’t always live up to the standards that average users typically expect from collectibles and apps,” he says.
But he points out that this won’t delay industry development too much. According to Levitt, the metaverse will play an important role in advancing the NFT space.
“Digital assets are a natural fit for digital worlds, which need native assets to transfer value seamlessly. We see NFT use cases like gating access to certain worlds or areas, or representing unique items, as obvious uses of NFTs that should be built into metaverses from the ground up.”
From gamer paradise to NFT marketplace:
Della Casa isn’t so convinced though and says that NFTs have so much potential that they will develop much faster than the augmented reality platform of Meta.
While we hear the word Metaverse a lot, any true expert will tell you it is not scalable for at least five to eight years. NFTS will go much faster since the technology is solid and scalable.
So, I don’t think Metaverse will drive NFT adoption,” she says.
“Mark Zuckerberg’s announcement got us all excited about the Metaverse and really seeing the potential of NFTs. But I don’t think that will make NFTs popular. Take a look around. There is not a single major brand that does not have an NFT project.
There is a lot of confusion in the market when it comes to using interchangeable terms. If you look closely, you can see that many metaverse projects are actually NFT projects.”
NFTs and long term:
So where will the NFT market be in 10 years? Will they become an integral part of our financial economy? Levitt thinks so. he says; “[They] are much more utility-based, and in many cases they don’t even realize that NFTs are the underlying technology for the applications they use.
Digital collectibles will have their place, but I think the video/media, metaverse, and gaming use cases are much more interesting.”
Change the world “NFTs are the future. they don’t leave As NFT technologies can lead us towards carbon neutrality, they will help solve some of the world’s biggest problems.
Blockchain-based machine-to-machine communication allows household appliances to turn off and on in the home based on consumption limits.”
She adds, “This will allow automated vehicles to communicate with each other to go faster or slower in exchange for paying parking for the day, it will allow humans to become their own SEO machines… all in a decentralised manner.”
Top SIX NFT trading platforms:
1 — OpenSea: OpenSea is one of the largest NFT marketplaces, offering a wide range of NFTs from various creators and artists, including digital art, collectibles, and in-game items.
2 — Rarible: Rarible is a decentralized NFT marketplace that allows users to create, buy, and sell NFTs on the Ethereum blockchain.
3 — Nifty Gateway: Nifty Gateway is a platform for buying and selling limited-edition NFTs from popular artists, musicians, and celebrities.
4 — SuperRare: SuperRare is a high-end NFT marketplace that specializes in digital art, with a focus on curated, one-of-a-kind works by established and emerging artists.
5 — Bored Ape Yacht Club (BAYC): The Bored Ape Yacht Club is a popular NFT platform specializing in collectible NFTs featuring unique hand-drawn monkeys.
6 — Treasureland: Treasureland is an NFT marketplace focused on the sale and exchange of virtual real estate and in-game assets.
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Source: Navigating the NFT space and the future of tokenized assets
Originally published at https://businessdor.com on February 10, 2023.