NFTs are Dead, Long Live NFTs
This year has seen significant price drops across NFTs. Trading volumes in NFTs have tumbled 97% from the record highs of $17 Billion seen in January this year, to the volumes we are now seeing now around the $465 Million mark. The NFT decline has been part of the wider crypto winter that has seen around $2 Trillion of declines in the space, caused by tightening monetary policy around speculative assets.
That said, there is more to the NFT price decline than the blow up of Celsius and Luna causing market panic. The first wave of NFTs were born out of FOMO, like a lot of new technologies are. People aped in (excuse the pun) to whatever the latest NFT craze was, and not just CryptoPunks and Bored Apes. Jack Dorsey sold his first tweet for $2.5 Million to a Malaysian businessman, who then struggled to move it on, with the top bid coming in at $280 (the owner was looking for about $48 Million)! It’s almost as if people have realised that JPEGs aren’t worth millions of dollars!
That said, the CryptoPunks and Bored Apes were significant players in the first wave, they are going to retain retro value even if they don’t all hit the prices they saw earlier this year. A lot of NFTs will die though.
This does not mean that NFTs are dead!
NFTs with measurable utility are starting to appear more and more now. It will take time for the volumes to get to the previous peak. We are in a crypto winter, and a lot of trust in the market has been lost, but people will start to see that NFTs are more than just JPEGs of monkeys. Maybe we will see more of these new NFTs, but with lower values as there is less FOMO, but they will have real utility!
This is something I want to explore with YOP Finance too. The original YOP NFTs that were created by the original YOP project team, before Pluto took YOP Finance over, had their challenges. There was a lot of hype and ideation around them that was not fully realised. I want to introduce YOP NFTs with utility. The utility could take many forms. We could provide discounts on smart contract insurance, super boost APYs, provide access to vaults with higher risk/higher APYs, allow entry into airdrop competitions or IRL merchandise. There are many options, but they must be tangible.
NFTs have the potential to be so much. In the future they will allow us to reclaim control of our personal data, fulfilling a web3 promise after the web2 fallout. They will allow us to trade and settle transactions almost instantly, providing much more efficient opportunities in traditional banking. They will enable us to trade real world assets, such as property, on chain, reducing significant operational overhead. NFTs as we knew them might be a thing of the past, but they have paved the way for a great future. NFTs are dead, long live NFTs!
Dave Burrells — YOP Finance COO