The next generation of NFTs will be lean and trustworthy

Non-Fungible Tokens (NFTs) It has been in the headlines for the past few years. While most people try to figure out why NFTs exist, demand has skyrocketed, institutions have been established, and the term has entered our collective consciousness.

However, there is an elephant in the room: NFTs are difficult to use, and most of them are digital snake oils. But these questions create opportunities to provide answers. Both the accessibility and legitimacy of NFTs are ripe for change. This change is gaining momentum as money pours into the space and the market begins to mature. We are entering a new era of NFTs – NFT 2.0 – where mainstream technology will be more accessible and the underlying value proposition of NFTs will be more transparent and reliable.

Rethinking the rise of NFTs

NFTs have exploded into the crypto space in their short existence, Trading volume tops $17 billion in 2021.This number is expected It will balloon to $147 billion by 2026.Even more impressively, this figure is have With less than 400,000 holders, the total transaction volume per user is as high as $47,000.

With the rapid rise of the industry, NFT itself has undergone tremendous changes since its birth. For example, free-minted CryptoPunks rose to blue-chip status in 2017, peaked at $11.8 million Auctioned at Sotheby’s last year. A few years later, Larva Labs, the company responsible for creating punk, was acquired by Yuga Labs, the parent company of the Bored Ape Yacht Club, for an undisclosed sum.

Evolution of NFTs

NFTs were dismissed as a fad in the early days, but have shown tremendous staying power, attracting the attention of major celebrities and brands, and even appearing in Super Bowl commercials. The likes of Budweiser, McDonald’s and Adidas have dropped their own collections, while Nike has entered the space with the acquisition of RTFKT Studios.

related: Why are major global brands experimenting with NFTs in Metaverse?

While organizations define their NFT strategies, the overall space has mirrored the technological innovations of the past few decades, only under a significantly accelerated timeline. While it took the iPhone about 10 years to reach its current version, NFTs have transitioned from 8-bit pixelated images and Pong-like blockchain games to high-fidelity 3D animations and complex game mechanics and massive multiplayer experiences. many years.

While actual NFTs continue to evolve, so does the ecosystem of pick-and-shovel solutions. The onslaught of NFT casting platforms and tools has dramatically lowered barriers to entry, leading to deep market saturation.As of March 2022, the number of NFTs exceeds the number of public websiteproduces a lot of noise that many people find difficult to eliminate.

The asset class’s staying power and massive trading volume has changed the way creators enter the space. Many rushed to implement a Web3 strategy, or saw their fans as a source of liquidity, leaving behind a slew of missteps, carpet pulls, and abandoned projects. In short, most companies and creators are not ready to go into Web3, they need more hand-held and white-glove services than tools.

like email

Ultimately, NFTs seem to be heading in the same direction as email. There was a time in the 1990s when companies needed to hire experts to write emails for them. Early adopters create lucrative agencies that serve Fortune 500 companies and execute early-stage digital strategies. The information gap provides these agencies with enormous leverage until technological advances (and education) make it easier for brands to do it themselves.

related: We haven’t even begun to tap the potential of NFTs

Likewise, we are currently in an age where brands are looking to educate experts and prepare for the Web3 future, and it’s only a matter of time before they completely disintermediate and manage their Web3 strategy entirely in-house. Onboarding of NFTs and cryptocurrencies in general is a rather complicated process that many simply cannot handle. However, some companies are finding ways to abstract the more difficult aspects of encryption and create avenues for deeper engagement with their fans.

Born for the mainstream: NFT 2.0

The current iteration of NFTs is not designed for mainstream consumption.Onboarding system isn’t smooth for consumers; volatility is hurting true fans; it skew Relationship between artists and fans. There is too much incongruity between the price tag of NFTs and the value they can offer consumers, and many collectibles have faced a severe demand shock by failing to execute on the roadmap.

Core NFT buyers are getting smarter carpet pull and scams, which means they’re unlikely to create a new series. While it’s easy to see trading volumes drop and see doom, the reality is that NFTs need to be phased out on a massive scale to weed out those looking to get rich quick and more appropriately incentivize the real builders of the space. Antifragile companies that can weather the storm as they move from Web2 to Web3 will thrive as steam software gets wiped out in a bear market cycle. Agencies and platforms will be wiped out if the timing is incorrect, but those that are ready for the email-style shift will maximize high-margin, high-touch projects while capturing long-tail revenue streams.

This matters whether you are building in the space, a potential user or an investor. This space will grow and develop rapidly. Don’t blink or you might miss it.

This article was co-authored by Mark Peter Davis and Sterling Campbell.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk and readers should do their own research when making a decision.

The views, thoughts and opinions expressed here are solely those of the author and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Mark Peter Davis Is a venture capitalist, serial entrepreneur, author and community organizer. He is the Managing Partner of Interplay, a premier New York City-based venture capital firm.He is also an active podcaster, author Fundraising Rules and founder of the Columbia Venture Capital Community and Duke Venture Capital Community.

Sterling Campbell Is the CEO of Minotaur, a Web3 company that serves top creators and brands when developing NFT projects, DAOs and tokens. The majority of his career has been focused on developing consumer-centric technologies for Blockchain Capital, Lerer Hippeau, Grishin Robotics and William Morris Endeavor, where he developed talent. Sterling holds a Bachelor of Science in Music Industry and Business Administration from the University of Southern California and an MBA from Columbia Business School.