Next Big Trend in NFTs

The Next Big Trend in NFTs

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Next Big Trend in NFTs

Next Big Trend in NFTs

Introduction

The premise of NFTs is that a “blockchain certificate” is assigned to digital items, which guarantees their provenance, their ownership and a level of authenticity. Because it is “minted” on the blockchain, it is not centralized by a single party — everyone can view the certificate, but no one can alter it.
Because of this, you can now mint your design into an NFT and distribute it without the risk of losing ownership of the design and therefore its value. Not as in the past it used to happen because as soon as a design was shared on the web, anyone could save a local copy indistinguishable from the original.
The NFT marketing is booming right now. Most of the people are selling high price NFTs and new projects are launching, But what are the things people pay attention to in order to decide on minting/buying these new projects?
These are the factors that we’ve highlighted. Something that has become trendy lately is “utility”. When we talk about new projects it is common for people to ask “What’s the utility?”. And actually because of this factor, projects like CryptoKitties, CyberKongZ, Mutant Cats, and others that are so popular today.
Let’s analyze what type of utility these projects have and why they become so successful today!

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Historic Value: Things you need to know before understanding utility.

Next Big Trend in NFTs

In the beginning of the market, most of the projects created were just memes or art, none of these projects had any other utility rather than representing ownership.
“Rare Pepes” is an amazing example, one of the firsts NFTs projects launched in 2016
For the ones that don’t know about this project, it’s a collection of memes and cards related to crypto with the “Pepe Frog” theme. This project doesn’t have any sort of utility, other than just representing ownership.
This is the same with Art Blocks, this is a project of curated art that people it’s literally buying such as they are buying a Picaso or some nice picture to add in their collection. People buy these types of projects because they like the art, the aesthetics or what they transmit . But now we have a big problem: the high level of competition that wasn’t here before.
As in any industry, when something works, others start copying it. This was also the case with NFTs, many people started to launch collections of NFTs, actually some had very good designs but supply outstripped demand highly and people started to look for new ways to be successful, that’s where many started to add utility.

But at the end: what creates digital value?

We could start saying a thousand different things but there is a formula that represents it perfectly: Value = Scarcity + Utility + Reputation + Liquidity.
Scarcity is necessary, but not sufficient enough on its own to create value; Utility represents how easily the NFT can be used and what you can actually do with it; Reputation represents the value given by the profile (popularity or infamy) of the original creator or source; and Liquidity represents how easy it is to buy and sell the NFT.
Over the past few months, dozens of brands and celebrities have minted their own NFT collections with more or less resounding success but ultimately, the ones with bigger success are the ones that integrate a big utility factor, such as the project hosted by Gary Vee called “Vee Friends”.

What it’s Vee Friends?

VeeFriends is the name of Gary Vaynerchuk’s NFT collection. He created VeeFriends to bring to life his ambitions of building a community around his creative and business passions using NFT technology and their smart contract capabilities.By owning a VeeFriend NFT, you immediately become part of the VeeFriends community and get access to VeeCon.
VeeCon is a multi-day event exclusively for NFT holders. Your NFT will give you a three- year access pass. The conference will be focused around business, marketing, ideas, creativity, entrepreneurship, innovation, competition and of course, fun. Gary’s focus is to curate the best experience for his community, bringing enormous access and informational value to all the VeeFriends token holders in attendance. If you own two VeeFriends tokens, this means you have two tickets to VeeCon. All dates and locations will be announced at least 180 days in advance for VeeCon 2022, 2023, 2024. The first VeeCon will be held in North America before May 5, 2022.
But here’s something even more interesting – There are 3 categories of tokens:
  • Access
  • Gift
  • Admission.
All token holders who receive a three- year access pass to VeeCon and also an exclusive experience for VeeFriends NFT holders to interact with Gary and his special guests in a curated themed event around business. For example: “Podcast Panther” allows you to host Gary in your podcast.
This is real life utility, value that the founders are adding to the project, uses cases for the NFT on top of the art.
Reputation and scarcity-driven value work well for digital art and collectibles, but this is a relatively niche audience. In order to have mass adoption we need to combine all resources available to us.

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What type of utility NFTs can have?

The utility NFTs are the same ones that can and should be used on a regular basis. They are not simply digital collectibles that are kept in the MetaMask wallet until you decide to give them a spin for some benefit.
There are infinite options, even many that we have not discovered yet, but there are some very characteristic ones and it is about them that we are going to talk next.

Access NFTs: Get access to exclusive experiences, online and offline which can include events with celebrities/athletes, premium content, voting on brand decisions, and much more.

The perfect example of this type of NFTs is “Vee Friends” as each NFT allows you to have an exclusive experience. But we also have a great example of this type that was created by one of the most recognized brands in the world, the famous “Kings of Leon”. They created a collection of different types of NFTs but there was one called “Golden Ticket” that included a unique experience. Among them

Next Big Trend in NFTs

  • Tickets with lifetime VIP access to all their concerts.
  • Transportation and merchandising are paid in full.
  • Meeting with the band before the concert.
All this and much more, for a super fan as for any other person is incredible and can only be accessed by purchasing that NFT which is unique and verifiable. Now, do you understand where the game goes?

Community NFTs: Ownership of exclusive NFTs comes with access to special fan communities. Ownership can be transferred if desired.

Have you ever heard about the next Lebron James? Well many acclaim that name to the young LaMelo Ball. He himself is very visionary and was looking for the best way to connect with his audience that’s why he comes to the NFTs and creates the project: “LaMelo’s collectibles”.
This is LaMelo Ball’s only official blockchain project. The intention is to mint LaMelo Ball’s entire career on the blockchain, starting with his Rookie ‘20/’21 season.
LaMelo’s NFTs are dynamic and supercharged with utilities powered by Ether Cards and Chainlink. Owning a LaMelo Ball Collectible grants VIP access to Melo’s inner- community, where owners are rewarded for owning the collectible(s).
Each collectible has ‘level up’ capabilities based on the outcome of real- life events, like a Rookie of the Year announcement. As LaMelo’s career evolves, so will the collection with dynamic integrations to stats and milestones. Fans holding certain NFTs will win highly-curated memorabilia and exclusive experiences.

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Gamified NFTs: Users compete for special NFTs that are dropped as a perk for their activities or as a part of a gaming universe. The Sandbox is the most prominent example of in-game NFTs as an important facet.

Next Big Trend in NFTs

Sandbox is a blockchain-based digital universe (or a so-called metaverse) built on Ethereum. Here, players can create their own items, mint them as NFTs, and monetize — there is an NFT marketplace working in Sandbox.
There are three main elements in the Sandbox’s ecosystem. VoxEdit allows for building 3D models and designing game items; Marketplace makes it possible to trade these items, and the Game Maker interface lets users build their own games with scenarios inside Sandbox using no-code solutions such as script templates
The economy of Sandbox is based on SAND — an ERC-20 utility token that is used to enter the game, purchase items (NFTs), interact with other players, and so on. The total supply of SAND is 3 billion. Also, it is a governance token, and soon, users will be able to stake it to earn rewards.

Social NFTs: These are NFTs that can be used socially like GIFs, emojis, badges, profile pictures, comment embeds, etc. The approach here is similar to Discord with channel/role-specific emojis but users can earn them as NFTs and use them within that community or across the NFTverse.

Actually, most of the hype that NFTs have and were having was around PFP projects that follow this approach. PFP stands for ‘Profile Picture,’ and PFP NFTs are digital avatars that you can uniquely own and show off to your friends.
PFP NFTs usually constitute algorithmically generated art collectibles from a limited edition series. Therefore, each of these NFTs is unique and different from the rest of the collection. Moreover, some of them have rare attributes that make these avatars scarce and highly valuable.
PFP NFTs are not just about making money by flipping them. When you put up a PFP NFT as your Twitter picture, you are participating in a community of crypto enthusiasts. If you happen to hold a rare high-value NFT, you also attain higher status within the community.
This in contrast to your typical PFP is actually “Real Life Utility”. People could buy physical items and communicate and these hold value
The most popular project is Crypto Punks and are rightfully called proto-NFTs since they predated the ERC-721 standards. This unique collection of 10,000 randomly generated characters have taken the market by storm. Mainstream companies like Visa are investing in them and auction houses like Sotheby’s and Christie’s are selling Punks for millions. In addition, Twitter is full of people who are putting up Punks to showcase their PFP NFTs.

Next Big Trend in NFTs

Intersection between DeFi and NFTs.

Every world needs a financial system in order to subsist and inside the blockchain that economic system it’s called “DeFi”.   
NFTs fulfill the role of exchange of goods and services, another thing an economy needs to be rich. What purpose does money have if you can’t do anything with it? Or again, what is the point of goods and services if no one can access them because they don’t have money?
If we want to have a massive adoption of the blockchain, where everything moves under this giant decentralized and super secure network we must connect both worlds: NFTs + DeFi.
Some projects are already starting to connect both worlds so let’s discover how they are doing that.

Next Big Trend in NFTs

DAO

A DAO is a decentralized autonomous organization/community. DAO members vote on how to spend pooled funds, then funds are moved automatically by smart contracts when votes pass.
So if you want to be paid by a DAO:
  1. Pick a DAO.
  2. Write docs, make memes, code, do work. 
  3. Members vote if your work is good and then they’ll pay you.
Projects could be centralized or decentralized, changing the whole game.
If it’s centralized it’s likely to be the traditional way to do the things (web2), basically you have a CEO or a board of directors that dictate the orders and outsource the work to the team members.
But if it’s decentralized there are a bunch of people, all making decisions with the same goal in mind. Actually it’s autonomous because there is not only one person making the decisions and everyone inside the community is simunstanially making those decisions.
Some claim that every NFT project should be a DAO because it’s the same approach the Ethereum Blockchain took and because most of the projects are in Ethereum Network they should follow the same philosophy.

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Next Big Trend in NFTs

ERC20 token

To vote inside a DAO, back in 2017, people needed to have an ERC20 token to vote, in most cases, each token equaled one vote.
The popular cryptocurrency and blockchain system Ethereum is based on the use of tokens, which can be bought, sold, or traded. Ethereum was launched in 2015, and since then it has become one of the driving forces behind the popularity of cryptocurrency. In the Ethereum system, tokens represent a diverse range of digital assets, such as vouchers, IOUs, or even real-world, tangible objects. Essentially, Ethereum tokens are smart contracts that make use of the Ethereum blockchain.
One of the most significant Ethereum tokens is known as ERC-20. ERC-20 has emerged as the technical standard; it is used for all smart contracts on the Ethereum blockchain for token implementation and provides a list of rules that all Ethereum-based tokens must follow.
Some NFT projects are starting to issue this type of token and give it to it’s holders. The most famous example it’s the project called “CyberKongz”. They started as a normal PFP collection but then they created the token “BANANA”. The agreement was as follows: “People need to block (stake) their Knogs NFTs on our website to receive 10 BANANA per day”
Today the token “BANANA” is worth $55, so each holder of this project is gaining $510 per day, the same as saying that they earn $16,500 per month, simply a craziness that is becoming more and more common within the NFT ecosystem

Next Big Trend in NFTs

Fractionalization

One of the easiest things to do in order to deliver a unique way to unlock NFT liquidity and provide community access it’s allowing people to own parts of iconic and historic NFTs.
The platform fractional is the leader of the market and what this platform allows you to do is buy fractions of NFTs. Imagine that you want to buy a CryptoPunk but it’s worth $100,.000 and you only have $1,000, what can you do? Well, this platform let’s you buy a fraction of that NFT, in this case, the 1%.
There is a very cool project called “Mutant Cats” that are leveraging on this dynamic. What they are doing is the following:
  • They created an investment fund with the money of the DAO.
  • The goal of this investment fund is to buy NFTs of the Blue Chips of the market.
  • Once they have a blue chip NFT they fractionalize the one.a
  • They distribute the earnings to the persons that Stake the Mutant Cats NFTs in the form of his own ERC 20 token.
When they implement this strategy what they are doing is increasing the floor price of the collection because people in order to be rewarded need to stake their NFTs, that’s basically agreeing to not sell the NFTs minimizing the supply out there.

Next Big Trend in NFTs

Burning

Actually burning is a mechanic people use to limitate the supply of NFTs out there. When you burn a NFT you could also say “I’m deleting this NFT
Actually, the burning mechanism it’s very interesting because founders need to compensate heavily to the persons that do this, such as they sacrificing their NFT.
When people can burn NFTs, the supply of the project starts to decrease due to the simple fact that there are now fewer NFTs in existence and in most cases driving up the price.

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Breeding

This is one of the first mechanics ever created and implemented in NFTs. This was also created by one of the first and most popular projects called “Crypto Kitties”.
Back in 2017, Kitties started to say: “If you have a NFT of generation 1 and another of the same generation, you can breed the 2 and create a generation 2 kittie with unique traits.

Next Big Trend in NFTs

Summary

The current NFT market is obviously in a hype cycle, with most projects being driven by pure speculation or a niche audience of collectors. A lot of this value isn’t sustainable in the long term. But as the use cases grow, the utility of NFTs will increase, and so will market value.
A lot of people are having trouble succeeding, supply is so high that people are paying attention to a few projects, to the projects that stand out with innovation and good visuals, to the projects that know how to communicate a story and be faithful to it.
What we’ve seen this year is no more than a super promising first step for NFTs, but the real potential to drive mass adoption is in utility.

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