The non-fungible token (NFT) marketplace is seeing a scorching return in activity, setting a number of hot trends across the landscape of digital ownership.
Despite a sharp dropoff in the $2.5 billion in sales generated through NFTs in the first half of 2021, the marketplace for digital collectibles is undergoing a revival. Concerns over Ethereum’s sustainability and rising fees led to a pause in the growing hype for NFTs, but the digital marketplace has managed to rebound in the last few weeks.
According to a report by Decrypt, the NFT marketplace is establishing a series of trends in digital ownership, starting with membership in exclusive clubs.
High profile celebrities and wealthy investors are shelling out millions of dollars to purchase a piece of the Bored Ape art collection, including NBA star Steph Curry. Wealthy investors are turning their purchased NFTs into a status badge on Twitter by using their Bored Ape and CryptoPunk photos as profile pics.
The report claims several large companies are now dipping their toes into the NFT market, including Visa and Budweiser, both of which have recently announced purchasing an NFT. The companies are reportedly using the move to test the water for expanding their brands into digital collectibles.
Fractionalized NFTs are also presenting an innovative take on the market. According to the report, fractionalizing an NFT allows multiple users to purchase a stake in the digital collectible, thereby sharing ownership.
However, the process of distributing ownership has garnered scrutiny from the U.S. Securities and Exchange Commission, which views the process as similar to offering of unregistered securities. In March, SEC commissioner Hester Peirce warned crypto investors to be wary of participating in projects that could be classified as unregistered securities, including fractionalized NFTs.
Decrypt’s report says that these are the top NFT trends to watch right now:
- Membership in a club (such as Bored Apes Yacht Club)
- O.G. NFTs (such asCryptoPunks)
- Major brands (such as Visa) investing in rare NFTs
- Fractionalized NFTs
- NFTs used in blockchain-powered games (such as Ethereum-powered Axie Infinity and the upcoming Solana-powered Star Atlas)
- Generative (or algorithmic) art (e.g. Art Blocks)
- Collective world building (e.g. Loot)
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