NFTs in 2022: From Word of the Year to Mainstream Adoption & New Use Cases
- "We are going to see many more industries start to use NFTs for efficiencies, authentication, and to eliminate rent-seeking middlemen."
- One of the biggest NFT trends for 2022 will be the growing involvement of big corporations and brands.
- Industry players almost unanimously estimate that metaverse- or gaming-related NFTs will trend more than any other kind this year.
- Expect to see more NFT-facing regulation emerging in 2022.
‘NFT’ is Collins Dictionary’s word of the year for 2021. Yes, the acronym standing for non-fungible token is, in the opinion of the dictionary’s experts, more representative of the world this year than any other recently fashionable word.
This is a significant recognition of the status of crypto and NFTs, with Collins describing it “as a buzzword we’ve heard over and over again in the past 12 months, in breathless news reports and on social media.” However, as big as 2021 has been for non-fungible tokens, industry players expect 2022 to be even bigger for it.
In particular, commenters estimate that the end-of-year growth we’ve seen for blockchain-based ‘metaverse’ and gaming platforms is going to translate into significant expansion for non-fungible tokens in 2022. And while the arrival of regulation may place certain limits on the NFT sector this year, the arrival of big corporations looking to jump on the bandwagon will help it to expand regardless.
Further growth and big brand involvement
What needs to be remembered is that, even though NFTs have had a great 2021, they still remain exceedingly young. In other words, 2022 should see them grow even further as a subsector within crypto.
“With the explosive growth of the NFT market in 2021, it’s easy to forget that the industry is still very young, and we’re just getting started [...] In 2022, we can expect to see further growth and maturation of the market with the proliferation of new, unique use cases of NFT technology and increased mainstream and institutional adoption,” said Alex Salnikov, Co-founder and Chief Product Officer at Rarible, an NFT marketplace.
Virtually every other figure working within the NFT subsector estimates that it’s only just getting started, with 2022 likely to cement its new status as one crypto’s most promising (in terms of mainstream adoption) areas.
“We are going to see many more industries start to use NFTs for efficiencies, authentication, and to eliminate rent-seeking middlemen. This is going to be the next phase, where we see utility and purpose-driven use of NFTs,” predicted Josh Katz, Founder of NFT-based ticketing and collectibles platform YellowHeart.
One of the biggest NFT trends for 2022 will be the growing involvement of big corporations and brands, as indicated by favorable statements issued in recent weeks by the likes of Electronic Arts and former employees of Activision and Lucasfilm. And as Mintable’s Co-founder and CEO, Zach Burks, tells Cryptonews.com, the rise of NFTs will help drive more people to crypto and blockchain in general.
“We will not only continue to see massive brands dive into NFTs, we will continue to see new adoption of NFTs on the public front and increased levels of adoption in crypto due to that. You need to have ETH/SOL/BSC/etc. in order to interact with NFTs and we will see more and more people interacting with blockchain for their very first time via NFTs as that medium,” the CEO of the digital items marketplace said.
Just how much the NFT subsector will grow in 2022 is a matter of speculation, but Burks estimates that its expansion will outstrip what we’ve witnessed in 2022.
“NFTs have seen a 30x increase in 2021 for volume, to be quite frank, 30x isn't that much compared to the global nature and huge impact NFTs can really have, that’s why I expect 2022 to be an even better year for NFTs,” he said.
Metaverse, gaming, marketing, luxury goods, music
Given the furor generated by Facebook’s rebranding to Meta, it’s perhaps unsurprising to hear that industry players almost unanimously estimate that metaverse- or gaming-related NFTs will trend more than any other kind this year. In fact, Burks says this particular area within NFTs is “primed to explode.”
“As soon as we have one large-scale game with every item as an NFT everything will change. Imagine owning your house in a virtual world by ownership of an NFT. It’s going to change the entire landscape of the internet,” he said.
This is largely the view of Josh Katz who also puts gaming at the top of his list of NFT trends for 2022.
“Gaming is going to explode in 2022, it’s one for the most logical uses of NFTs and has been a long time coming,” said Josh Katz.
However, even gaming/metaverse NFTs will dominate 2022, these will either intersect with -- or be complemented by -- other kinds of non-fungible tokens.
“We’ll also begin to see greater adoption of NFTs within the world of branding and marketing, with many mainstream corporations beginning to leverage NFTs as a way to forge deeper, experiential connections with their consumers and pave new avenues for customer engagement and revenue intake,” suggested Alex Salnikov.
Likewise, Josh Katz also estimates that NFTs will help boost marketing in 2022, with the YellowHeart founder suggesting that the luxury goods sector is going to start using NFTs for authentication by doing physical-digital pairings. And given that YellowHeart works largely with music, it’s also understandable to hear him predict that NFTs within the music industry will also be a trend this year (and beyond).
“Music is finally moving into the space; 2021 was about educating the music business and in 2022 we will start to see a lot more use cases. YellowHeart is focused on NFT ticketing for 2022 so we will look for that industry to adapt but don’t expect mass transition into Ticketing 3.0 until 2023,” he told Cryptonews.com.
NFTs may have to answer to regulation in 2022
Of course, no overview of NFTs in 2022 will be complete without the elephant in the room: regulation. Industry figures expect NFT-facing regulation to begin emerging this year, even if we might not see concrete enactments and enforcements until subsequent years.
“It's always hard to predict upcoming regulation - but I do expect some form of regulation to be drafted and proposed within the coming year or two years,” said Zach Burks, who added that there isn’t enough information right now to predict how broad NFT-related regulation will be.
According to Burks, NFTs ideally should be treated as digital certificates of ownership and nothing more, implying that the purchase of a non-fungible token shouldn’t involve know-your-customer (KYC) or anti-money-laundering (AML) checks.
“The underlying asset that the NFT shows ownership over, changes based on the type of NFT/asset and regulation should reflect this,” he said.
However, whether incoming regulations will avoid imposing KYC and AML checks on NFTs may seem unlikely at the moment, especially when regulators throughout the world seem more or less unified in demanding that crypto -- including NFTs -- submit to more rigorous KYC/AML procedures.
Still, even if regulations emerge in 2022, companies within the subsector support the basic principle of regulation, and estimate it will be positive overall for the growth of NFTs.
As Alex Salnikov explains, “Our goal will always be to further promote wider adoption and education of NFT technology, and we understand that in order to fully do so, it is crucial to work with regulators to develop legislation that works for our community.”
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