Are NFTs Dead? - Uncovering The True Reality Of Non-Fungible Tokens(NFTs)
By Nerly Shammah Feb 6, 2023
NFTs are not dead, however, investors need to trade more carefully and look out for long-term sustainability and profitability structures.
Crypto and blockchain are oftentimes misrepresented for what they really are, this has contributed hugely to the high volatility of assets in the ecosystem. NFTs, being one of its asset classes protected by cryptography, have also been greatly misrepresented. When NFTs are mentioned, people generally think "arts" and there is literally nothing else, this is because of the high popularity of blockchain games whereas in-game assets or collectibles are usually "arts" created and issued as "NFTs".
Also, the high interest from the arts industry, whereas digital artists have flocked into the NFTs space in multitudes to leverage the technology to sell their creations and maximize their creativity. Here's been where NFTs drew the "art centric" idea whenever the the technology is mentioned and has been the reason many have declared it dead as trading volumes towards these projects began to shrink due to global financial crisis begining to lump in, and collectors battling to understand if their investments bares actual authenticity given that the "NFTs are just jpegs" trend broke out and crawled into the space as the leading FUD against the technology.
Are NFTs Dead? No! And Here's Why
NFTs are not dead because the technology, similar to fungible tokens, is yet to actualize its full potential. NFTs are pronounced dead simply because the practice of flipping them for a profit has grown difficult as investors have slowed down on pouring money into every NFT project that is born out of the blue with promises of building the "Web3 economy".
Quite frankly, NFTs account for more than the industry currently acknowledges, their value in the arts sector has seen a decline because investors moved in with high expectations of riches and lasting value generation, sadly, this wasn't the case as NFT creators were also after the same thing, inevitably causing the space to be choked with greed and little to no actual value or utility were built into NFTs.
That said, in recent times however, diverse NFTs projects have emerged with utilities that set the asset class off to accomplish more than simply being "Non-fungible". This is by building staking features into NFTs, whereas similar to crypto staking via DeFi protocols, NFTs holders can stake their assets to earn yields or rewards of some kind, this may include governance influence which would make that NFT function as governance token as it is tokenized to influence the direction of developments and decisions built upon on a select ecosystem.
NFTs Market : Is NFTs Trading Still Profitable?
NFTs trading is still profitable if you do the right research before diving into the markets. Similar to cryptocurrencies, NFTs values are not predictable, even worse, they are extremely illiquid, most NFTs do not have easy exit routes to trade into fungible assets like Ethereum.
As such, doing the right research is important to make the most profits trading NFTs. NFTs trading is not dead, however, the involvement in the sector is decreasing, this has been because arts proved to be an unsustainable and unprofitable form of NFTs investment, nonetheless, NFT just as they could have currency-based values, can also exist without them and still be extremely valuable.
According to Dappradar, Opensea has seen over 58% surge in NFTs trading volume, coming from over 352k unique wallets. A total of 2.9 million transactions has been reported during this period against the previous month, this accounts for over $337 million which shows that the markets are pretty much alive and selling in great volumes.
With NFTs, it's easy to determine the actual price value one gets for a given asset as they hold no actual "currency value" on their own but as simply traded around at agreed price values. This means that if $337 million was reported then that is exactly the amount that flowed through the sector.
That said, asides being a widely traded asset class in the cryptocurrency ecosystem, NFTs have use cases and values that may not necessarily have price values attached.
What Are The Usecases Of NFTs?
The usecases of NFTs include NFT certificates, NFT IDs, NFTs season cards, NFTs for brand authentication(this includes the use of NFTs to validate the authenticity of a product) and so much more. The reality of NFTs are that they can be made to be literally anything, this makes the technology one to stand the test of time, thus, the great decline in the NFTs markets and the cryptocurrency markets at large do not signify the death of NFTs, Non-Fungible Tokens will attain more value and adoption as crypto and blockchain become widely leveraged technologies.