By Anthony Georgiades, co-founder of Pastel Network
To say that the growth of NFTs during 2021 was impressive is an understatement. NFTs completely exceeded anyone’s expectations. The tremendous technological strides that have been taken to improve, protect, store and transact in NFTs have been paralleled by the increased attention and popularity this emerging technology has garnered throughout the year. This begs the question - what does 2022 have in store for this burgeoning digital asset class?
One thing remains certain: NFTs will continue to grow in popularity, and many will continue to be sold at astronomical rates. While they will continue to represent a way for creators to make a living, not every artist will be able to break through. As the NFT market continues to mature and digital artwork continues to appreciate in value, a natural refinement process will emerge. High quality artwork will organically be sorted from lower quality artwork, meaning there will be more criteria for judging which NFTs are of higher value than others. Less attention will be placed on fatuous mints, as collectors and marketplaces exercise more prudence in curation.
NFT communities will continue to prosper and create a bridge for investors and big brands to enter the space
2021 has witnessed the growth of communities around NFT collections and the broader concept of ownership as membership is best demonstrated by the rise of Bored Ape Yacht Club (BAYC), a testament to the power these digital assets have in forging lasting connections between creators and fans. By simply owning a NFT from a certain collection or artist, individuals can gain access to a wide variety of benefits, such as receiving exclusive NFT airdrops, admissions to private chat rooms, or access to IRL events. These perks make NFT communities more exciting than typical fan clubs, and their popularity indicates that they will continue to grow in 2022. Collections that offer nothing more than PFPs or social reputation will be dominated by those that offer collectors access to tight-knit, welcoming communities.
In fact, NFT communities will likely become the center of the crypto world, especially as investors turn their attention to the space. NFTs have high investment potential in part because of the immense support they receive from their communities, and in part because collectors are willing to spend millions of dollars to access them, in some ways resembling the traditional art world but a concept still not fully understood or appreciated in the digital realm.
As NFTs become more important investment vehicles, investment Decentralized Autonomous Organizations (DAOs) will become more prominent. Investment DAOs are communities that invest as a single entity, meaning more resources can be pooled together and invested. Investment DAOs will flourish because they will allow individuals who may not independently have the funds to invest in high quality NFTs to do so, promoting democratized access to high end art and granting all members access to exclusive communities. This will also open the door to increasing decentralization across individual NFTs - a core tenant to their foundation - with many heavily touted collections already witnessing otherwise economically inaccessible floors.
Big brands and companies will also continue to perceive the potential NFTs have for marketing and selling products — companies can create exclusive NFTs available to their most special customers, tailor NFTs to product launches or offer limited edition NFTs of past and current collections. Many have already dipped their toes in the NFT space. Visa, Nike, Adidas and Mastercard are a few among others who have recognized the potential of NFTs in creating valuable user experiences and generating high community engagement.
We’ll also see some of the creators behind the most popular NFT communities partner with brands, allowing the latter to immediately gain access to a new pool of consumers: the creator’s NFT community.
New use cases will emerge with an emphasis on experiences and ticketing
2022 may just be the tip of the iceberg in terms of the new use cases that will arise for NFTs - from gaming and DeFi 2.0, to data identity and real estate - but some of the exciting new applications they will bring about will already begin to emerge. NFT applications will exhibit a large emphasis on experiences and ticketing for concerts, immersive art exhibitions, dining experiences and travel.
Concert venues will be able to distribute tickets in the form of NFTs, increasing verifiability, transparency and second-hand transfership. Restaurants will be able to use them as keys to exclusive dining experiences after which diners can keep the NFT as a memento of their special night.
NFTs will also become more popular within the entertainment industry. Talent agencies will create NFT collections and launch media channels on NFT marketplaces to reach a new audience. Fans will want to collect NFTs of scenes, actors and characters from their favorite films and series. NFTs may also democratize and decentralize film funding by providing an avenue for regular people to invest in movies.
NFTs will unlock experiences, but these will not be limited to the physical world
An exploration of the future of NFTs warrants a discussion of the Metaverse, which will attract more and more people to its depths. As humans, we’ve always wanted the impossible - to teleport to a country on the opposite side of the globe, to attend a concert in another city, to visit a friend who lives far away for the afternoon.
All of this becomes possible thanks to the Metaverse. And the keys to the Metaverse are NFTs. As the large tech firms continue to try to capitalize on the enthusiasm and fervor around this burgeoning ecosystem, the Metaverse will hold a major focus in 2022.
2022 will be a year of continued growth and excitement for NFTs and the Metaverse
All in all, these future developments are inspiring. It is difficult not to remain optimistic after having witnessed monumental growth of the NFT space over the past year. Just remember that anything that can become an NFT will become an NFT, underpinned by the democratization of ownership, peer-to-peer transfer, and the direct representation of intrinsic value. The best piece of advice as we head into the new year – buy an NFT and experience the thrill that so many are raving about. You won’t regret it.
About the author:
Anthony Georgiades, co-founder of Pastel Network, the preeminent protocol standard for NFT technology, has written a byline detailing where he believes the next major use cases will arise, how big brands will continue to incorporate NFTs into their marketing efforts, and how NFTs will promote the growth of the Metaverse.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.