The NFT market is expected to be worth $230 billion by 2030, which is more than 20 times what it was in 2021, even though well-known projects like Bored Ape Yacht Club (1) have suffered significantly, with floor prices falling below $100,000 this year.
There is no denying that non-fungible tokens, or NFTs (2), have taken a hit in recent months due to the plummeting market conditions, which are being scammed, and hacked frequently. Additionally, there are more low-quality projects, leading many to question the worth of NFTs and their place in web3.
As the value of technology and digital assets has risen, it has become easier for individuals and investors to justify their bets on the emerging NFT asset class, which frequently pays exorbitant premiums that convince some tangible utility. Its value may be derived from the future. As a result, NFT market conditions have been largely correlated to and dependent upon the general crypto market.
The combination of these factors and the fact that NFTs are naturally scarce and illiquid has created the ideal conditions for a dramatic price increase that fell even more dramatically back to earth. Changes influence market conditions in the ecosystem, which also include widespread fraud and content oversaturation. These changes increase concern among parties operating in the market and deter potential customers and businesses from entering it.
Before proceeding, every user or person interested in the NFT space must be aware of the market's rises and falls (3), as this is a natural component of the NFT space. Over-speculation followed by a rude awakening is to be expected. Still, it's also vital for users to act and change the monetary situation so that these digital assets can keep expanding and thriving.
Scams and hacks have always been detrimental to any project and the NFT space's users. Furthermore, it is crucial that no creator's work is copied and sold under someone else's name and that no purchaser be unknowingly the victim of fraud or theft.
Projects won't have to worry about infrastructure flaws being exploited by hackers to steal enormous sums of money. In contrast, early backers won't have to worry about project leaders running out of money or giving up on the product before it reaches the end of its roadmap. Because security breaches expose the system's weak areas, they give the marketplace a chance to work diligently to address them and stop them from happening again.
Additionally, they support the crucial point that for blockchain projects to succeed over the long term and avoid financial losses, infrastructure and security partners must be prioritized. Furthermore, businesses and initiatives need to consider safeguarding people inside effectively.
They must use open-source software and create features that will strengthen security, with OpenSea (4) and MetaMask (5) adhering to these guidelines to build a more secure ecosystem. Because of the rise in low-quality projects, which caused an overall oversaturation in the NFT market, there are places where scams and hacks induce mistrust and anxiety.
People are sick of hearing about NFTs, their artistic merit, and their lack of practical utility. Because the market is so crowded, it is becoming harder to determine which projects or collections are remotely valuable. The market slump is a silver lining since it forces lower-quality projects to deliver on their promises, change their business models to become more opportunistic, and better serve their target audiences.
To ensure that the best works of art are featured with a better alignment with changing copyright and IP laws (6), marketplaces must start by curating the content to ensure that the best works are not obscured by the vast number of NFTs and duplicates. Then, for the long term, projects not only concerned with digital art must offer genuine utility to customers and other enterprises.
Ownership rights (7), exclusive memberships, redeemable rewards, and access to groups of people who share your interests are all examples of utility. The main strength is that we have only scratched the surface of NFTs' full potential and range of applications. This highly disruptive token standard can and will support effective and secure digital ownership rights of valuable things.
Including financial items, medical records, real estate, and intellectual property is only one of the fascinating possibilities. Tickets (8) for events and trips, immutable forms of identification, and digital domain standards are among the other interesting possibilities. The market's issues will be overcome, creating a more stable environment with projects that will transform lives to unheard-of heights.
Additionally, NFTs are considered the foundation of the web3 metaverse, with the NFT market estimated to reach $230 billion by 2030, according to McKinsey & Company (9). The metaverse is expected to be valued at $5 trillion by 2030.
They serve as the digital identity or tickets for accessing events in the Metaverse, providing proof of attendance or payment, and also work as a proof of ownership for the games, wearables, or digital real estate because they reflect digital ownership and are immutable and simple to transfer.
NFTs will support all actions within the Metaverse and the digital economy. It is regarded as establishing the groundwork for future innovative goods and services and the next generation. The fact that NFTs are here to stay is obvious as we go through the growing pains of this young business.
Even though Bored Ape prices have fallen, the project remains one of the most well-liked NFT projects ever, and many people have strong hopes that it will rise again with the same vigor and force.