Web3 executives believe the current market slump signifies the technology inching closer from an overhyped asset class to one that holds “genuine utility.”
In a September report titled “Dead NFTs: The Evolving Landscape of the NFT Market,” blockchain experts at dappGambl say that 95 percent of NFTs are worthless.
The study cites several elements contributing to the loss of value, namely market oversaturation, speculative buying and the environmental ramifications of the technology.
However, Decentraland Foundation executive director Yemel Jardi dismissed the notion that the NFT market was dying. “I wouldn’t say the NFT market has regressed,” he told Cointelegraph. “Rather, it’s maturing.
“As people become more educated about NFTs, their use cases and their utilities, the market will stabilize and the focus will shift from speculative trading to genuine utility and innovation.”
Meanwhile, Collab.Land co-founder Anjali Young acknowledged the slump in the market, noting that many projects had begun diminishing in value since OpenSea and other marketplaces removed support for royalty fees in August.
That said, Young argued that NFTs would still be used for loyalty schemes, rewards, marketing and proof of validity. “Any innovation—especially this one with financial impact, cultural value, and status—will attract questioning during its downs,” she said.
In a Cointelegraph article titled “NFTs aren’t dead—they’re just resting,” Cumberland Labs COO Tama Churchouse acknowledged that most NFTs are indeed worthless. However, she maintained that NFTs had yet died, citing recent movements as signs of life.
The COO listed several recent NFT projects, including Justin Bieber’s NFT song project and a self-custodial digital wallet for future NFT rewards for Harry Styles’ fans. Paypal also filed a patent application surrounding an NFT purchase-and-transfer system in March, while NFT brand Pudgy Penguins has expanded into physical toys, selling in 2,000 Walmart stores nationwide.
Another NFT brand, Doodles, recently collaborated with footwear brand Crocs, following a similar collaboration between Gary Vaynerchuk’s NFT project Veefriends and sporting goods brand Reebok.
“As we transition from this NFT winter into a new season, expect to see NFT projects that are more sophisticated and commercially viable, enriching the ecosystem in new and meaningful ways,” Churchouse wrote.
Jardi highlighted that NFTs are an indispensable tool in the electronic landscape, as they enable one-of-a-kind means of demonstrating ownership of actual items. He believes that both governments and organizations will use NFTs for multiple purposes in the future.
The entertainment sector is a main focus of the NFT industry, according to Scott Lawin, chief executive of sports token platform Candy Digital. Twenty-four percent of Major League Baseball spectators who bought digital tickets redeemed the free commemorative digital tickets from Candy.
“Those are all utilities of NFTs in real time,” Lawin said.
Mainstream brands that have tapped into the NFT technology, such as Adidas, Bud Light, Gucci and Prada, are also seeing an increase in activity on their Discord channels.
Currently, the market cap of NFTs is estimated to be at $5 billion, with CryptoPunks and Bored Ape Yacht Club collections leading the pack at $710 million and $400 million, respectively.
Although trading volumes are down from $360 million in February to $63 million in September, NFT remains an attractive asset class. Ben Schiller of CoinDesk pointed out that the top five percent of NFTs were still selling at high prices, trading at an average of $42,000.
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