Over $12 billion has been invested into buying NFTs, particularly after they went mainstream in 2021. However, this is just the beginning stages of a cultural and technological phenomenon. That is because the applications of NFTs have tremendous versatility, which is only starting to take form.
And, if you want to get a piece of the action then look toward the future of NFT’s possibilities.
Start here by reading the top seven NFT trends to look out for this year and beyond.
1. NFTs as Collateral
Now when you buy NFT collections you could use them to get a crypto loan. Since NFTs are non-fungible they provide the most trusted authenticity to prove ownership, making them very useful as collateral.
Match the reliability of an NFT with the innovative financing of DeFi (decentralized financing) and you have a seamless and secure way to use your crypto assets to take out a sizable loan.
DeFi platforms emerged right around the same time that NFTs hit the mainstream, creating a digital plateau of real-world applications for investing in cryptocurrency. And now as the two technologies merge, you get to capitalize even more on your NFT value by using it to start your own venture.
It works by using a smart contract that places your NFT in escrow, so to speak. If the loan is paid then the NFT is released back to the owner. However, if the loan defaults then the asset goes to the lender.
2. Metaverse Property Ownership
Buying rare digital art from places like superrare.com means that you now own a virtual token verified on the blockchain. But, this isn’t the only place where you can prove ownership of your NFT.
With the creation of the metaverse, it is now possible to buy and own virtual land in your own world. How does this work? The NFT represents the land and acts as a virtual deed just like if you purchased a house or property in the real world. However, the deed is stored on a ledger to prove ownership.
This is only the beginning stages of NFT metaverse ownership, so virtual land can currently only be shared and is not exclusive to one NFT or owner but this could change as it develops.
3. Cryptocurrency Exchange NFT Marketplaces
NFT marketplaces have always been created and run by auction websites that allow people to place bids and use the Ethereum network to send and receive ERC-721 tokens. However, not everyone trusts these sites, especially if they are used to buying and selling their crypto on exchanges.
It also might be viewed as inconvenient and expensive to transfer coins to and from wallets for non-millionaires who want to buy their first NFT. So, it is not surprising that exchanges like Binance began to implement NFT sales on their platform in June 2021.
Other major exchanges like Coinbase and FTX are also in the beginning stages of adding NFT marketplaces to cash in on the craze.
4. Alternatives to the Ethereum Network
Anyone new to crypto might be shocked to find that using Ethereum to send money is extremely expensive. As the popularity of NFTs grew most transactions rose to hundreds or thousands of dollars. The highest fee reached a whopping $23.5 million for a 100,000 tether transaction on the ETH blockchain.
Since then, developers began experimenting with other networks, like Solana to purchase NFTs to spread the transactions out, reducing the time and cost to verify them.
As this trend grows, more people will be able to afford to bid on NFTs since the fee will eventually lower both on the Ethereum chain and its alternatives.
5. NFT Federal Regulations
Cryptocurrency has been under scrutiny since its creation as it acts as a competitor to fiat and raises concerns of tax evasion via black markets. Government regulations have also questioned the definition of digital currency and whether it is a commodity or a security. The classification would change how they are regulated.
Defining what are NFTs is a major conundrum as well and has become a recent concern of governments as billions of dollars flow through the virtual world. Regulators like the SEC (Security and Exchange Commission), for example, are now deciding whether NFTs act like securities, not commodities.
6. TV and Movie Integrations
Redefining what is NFT technology used for, movie and TV creators are now using NFTs in several new ways.
- Using popular NFT characters in movies.
- Crowdfunding to create projects.
- Selling NFTs to limit viewing access to members only.
- Creating lifetime privileges for NFT holders.
This industry is creating a unique, exclusive experience for enthusiasts of NFTs and motion picture art to become a part of the funding process. They are also forming a community similar to shareholders but with a modest investment and large creative interest, making everyday people integral to the finished product.
7. Corporate Branding
As more people start understanding NFTs the more mainstream they become. And as the mass population sees NFTs as a worthy investment more corporations also become interested.
Large companies like Nike, Taco Bell, and Gucci are cashing in on the rarity of NFTs by creating limited edition products. Some raise money for charities while others use it as a branding opportunity. It is also a great marketing tactic to gain a social media following and find new devoted customers.
NFT Trends Will Continue to Grow
These NFT trends are only the start of something big. The technology behind NFTs goes beyond temporary trends and will exceed the expectations of popular culture. We will see NFTs thrive as smart contracts and DeFi platforms enter normal business operations to verify identities and prove ownership.
Stay updated on the latest NFT trends by visiting our News section.