The Future of NFTs: A Race Between Traditional Businesses and Crypto-based Financial Services
Umberto Canessa Cerchi is the CEO of Kryptomon, an NFT play-to-earn blockchain game.
Traditional institutions and decentralized ones have always been at odds given their competing philosophies, but the recent explosion in NFTs has given them a shared interest, with both racing to give users easier and more convenient access to NFTs.
There is no question that the market for NFTs is growing. According to reports, NFT sales surged to a whopping USD 10.7bn in Q3 of 2021 alone, closing the year with a total of USD 24.9bn in sales.
From the sale of Beeple's monumental mosaic, which sold for almost USD 70m, to skyrocketing prices of NFT-based images, videos, and even virtual land that gave speculators double-digit profits within days, the market for NFTs is exploding.
This increased demand for NFTs has brought tons of attention to the NFT space and the crypto industry at large, with different types of players (both in traditional finance as well as in the crypto space) trying to compete for the opportunity to make purchasing NFTs easier.
NFTs: The new frontier for social media giants
NFTs are no longer just a niche fantasy for gamers, artists, and a bunch of skilled programmers who have built a new economic system from the ground up. Mainstream institutions such as Meta, Twitter, and Reddit are venturing into the NFTs in a big way.
The social media conglomerate Meta (formerly known as Facebook) is reportedly planning to set up an NFT marketplace on Facebook and Instagram. According to reports, users on both social media platforms will be able to create, showcase, and sell NFTs and other digital collectibles.
Already, Instagram's chief Adam Mosseri revealed last December that the company is "actively exploring NFTs and how [they] can make them more accessible to a wider audience."
Although the official release date for the marketplaces has not been revealed, this move by the social media giant gives credence to how popular NFTs are becoming in mainstream circles and will also be the biggest mainstream support the NFT space will receive.
Apart from Meta, Twitter and Reddit are also shifting their focus to NFTs, with the former recently announcing plans to introduce a way for their users to showcase their NFTs. Twitter is offering its Twitter Blue users the ability to create NFT profile pictures. Reddit is also following in Twitter's footsteps, with reports showing that the company is in the process of adding a feature that will allow its users to broadcast the NFTs they own in their profile pictures.
Crypto-based companies are doubling down on NFT platforms
As expected, various crypto and blockchain-based companies are also getting heavily involved in the NFT space, with some receiving funding for creating platforms that allow users to create, own, and trade NFTs.
The Sandbox (a blockchain-based metaverse game) just scored an investment of over USD 90m to expand its metaverse world made up of NFTs. Also, after successfully investing in Axie Infinity through the Yield Guild Games (YGG) outfit, venture capital firm Andreessen Horowitz (a16z), in participation with other ventures, has just led a USD 10m Series A funding in a startup solely focused on producing NFTs.
As it seems, demand for NFTs is outstripping supply, and traditional businesses, as well as those in decentralized finance, are racing to be the first to provide users with a more user-friendly and convenient experience when it comes to transacting with NFTs.
So, I believe 2022 is definitely going to be the year of mass adoption of crypto assets by the majority of the public, as more and more financial institutions are trying to penetrate this market and offer cryptoassets as investment vehicles to their clients.
Meta's move into the NFT space made the whole finance industry understand that the train is real, and it's leaving for the metaverse with or without them.
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