Cryptocurrencies are still stuck on the bearish path. So now is the right time to look at the most overrated segments to assess their true benefits and prospects. Non Fungible Tokens (NFT) and Metaverse coins made serious waves in 2020-2021. Both areas have witnessed massive capital inflows from VC teams and individual investors. However, in the middle of the crypto winter, many are having a hard time. Crypto expert Vladislav Sopov delves into these two areas.
What are NFTs?
Technically, NFTs are Blockchain-based assets with a number of unique features. While exchangeable cryptocurrencies (Bitcoin (BTC), Ethereum (ETH), Tether (USDT), etc.) can be exchanged for each other, this is not the case for NFTs. An immutable betoken is the most primitive form of tokenized ownership. It can be better understood as a certificate designed to verify that this or that crypto user is the legitimate owner of a piece of content (image, video, song or even article). When a crypto user receives an NFT, it can be interpreted as: “This document declares that account 0xa1b2c3… has RareBird.jpeg starting from block 123456 verified by Ethereum (ETH) Blockchain.”
Therefore, this technology provides an intuitive, inclusive and tamper-proof property verification tool. However, it is not completely decentralized. Typically, the file associated with this or that NFT is stored on a central server.
Why are NFTs popular?
First, because of the enormous hype and capital inflows. The NFTs segment has become very attractive to individual and institutional investors. After the first multi-million sales, many began to treat them like slot machines. He just tried to buy the next ‘Ape’ series low and sell high. That’s why many Web3 teams have gone into the production of endless copies of the most popular collections.
Bored Ape Yacht Club floor prices, 2021-2022, Ether // Picture NFT Price BaseThe NFT-centered model, then, is very democratic and inclusive. It allows every crypto user to express himself as a digital artist, trader or commissioner. With NFTs, it is possible for every internet user to buy and sell digital art. Also, there is the possibility to create your own token collection. For the most part, these opportunities are not available to participants on Web2 systems. Celebrities use the most expensive NFTs to show one’s status, well-being and living the ‘high life’.
How is NFT created?
Largely on Ethereum, the largest smart contracts platform, NFT runs. Technically, these are ERC-721 tokens. They are Ethereum-based tokens that use a different standard than the ERC-20 exchangeable token design. Tech-savvy users familiar with programming have the opportunity to create a new ERC-721 token using the Metamask wallet, a Remix integrated developer environment (IDE), and OpenZeppelin’s ready-made contract collection. It’s possible for developers to integrate code from OpenZeppelin, customize and distribute it via Remix, and see it in Etherscan.
cryptocoin.com NFTs gained traction in 2021, as you follow. That’s why a number of platforms have started offering codeless NFT creation services. For example, in Mintable it is possible for users to create NFT collections using only Metamask. Mintable clients load their content and the system converts that content into NFTs, checking for authenticity and uniqueness. However, it charges printing fees from users. However, gasless options are also available.
The best NFT collections in 2022
The NFT segment made headlines because of its flagship collections. In 2021 ‘floor prices rose thousands of percent in a matter of weeks. Here’s what happened to them in 2022.
Bored Ape Yacht Club (BAYC)
Bored Ape Yacht Club (BAYC) is the most popular NFT collection on Ethereum. Experienced software developers from Yuga Labs started the project in April 2021. Greg Solano, Wylie Aronow, Nicole Muniz and two anonymous developers are BAYC’s earliest key figures.
The collection itself showcases a variety of monkeys in fancy looks. Artificial intelligence (AI) generated all the tokenized images in BAYC. Owning a BAYC token unlocks the opportunity to join closed elite clubs through online and in-person events. All IP rights of the content belong to the token holders. By 2022, BAYC sales exceeded $1 billion. Jimmy Fallon, Snoop Dogg, Eminem and Madonna are proud to own Bored Apes. In March 2022, BAYC participants and supporters introduced the ApeCoin DAO and its local currency, APE.
Cryptopunk
Canadian software developers Matt Hall and John Watkinson (Studio Larva Labs) introduced Crypto Punks in June 2017. One of the oldest mainstream NFT collections. The project drew inspiration from the cyberpunk aesthetic, the London punk scene and electronic music.
There are 10,000 unique CryptoPunks NFTs in total (6,039 males and 3,840 females). Just like BAYC, AI generated the images. The collection includes Humans, Zombies, Monkeys and Alien characters. Each token has 87 different attributes besides the character type. By the way, there are no two similar Crypto Punks in the collection. In March 2022, BAYC developers announced that Yuga Labs had quietly purchased all IP rights to Crypto Punks NFTs. Neither party disclosed the sum of the largest mergers and acquisitions on Web3. At the same time, all commercial rights of Punks belong to their owners.
otherside for otherside
Otherside for Otherside is a different subclass of NFTs. So Otherside represents the necessary tokenized cards to enjoy the Metaverse experience in its virtual world. There are 100,000 pieces, each representing a card with a surreal image. Seven of them are offered for 1,000+ ETH.
Originally, Othersides was released in April 2022 as tokenized representations of in-game land plots. The Otherside is a ‘side project’ from Bored Apes creator Yuga Labs.
Best NFT Marketplaces in 2022
NFTs are typically traded on marketplaces that allow traders to buy/sell their assets in an Amazon-like manner. Also, some NFT marketplaces (e.g. Mintable) have built-in token issuance modules.
OpenSea
OpenSea was launched by Alex Atallah and Devin Finzer in early 2017. It is among the first major NFT marketplaces on Web3. OpenSea remains the core marketplace for the global NFT ecosystem. The technology foundation for all major collections and manufacturers.
OpenSea is very popular thanks to its intuitive interface and clear design. It also supports various Blockchains (Ethereum, Polygon, Solana, Klaytn) and numerous digital collectibles standards. OpenSea only charges 2.5% seller fees and zero buyer fees from its users. The marketplace has never been attacked in its five-year history. However, NFT enthusiasts criticize it for the lack of fiat-par-based payment methods and small royalties.
Magic Eden
Magic Eden is the first attempt at building a mainstream NFT market on the Solana Blockchain. The marketplace was introduced by veterans of Coinbase, FTX, and Uber Eats in 2021. In March-July 2022, Magic Eden raised over $157 million in two rounds led by VC heavyweights. Meanwhile, its valuation is over $1.6 billion. So, Magic Eden is one of the newest Web3 unicorns.
By Q3, 2022, Magic Eden is responsible for 97-99% of Solana NFTs. On August 3, 2022, his team shared an announcement regarding the expansion to Ethereum.
X2Y2
X2Y2 is a new generation alternative to OpenSea. OpenSea launched in February 2022, focusing on its target audience. The X2Y2 utility and governance tokens were airdropped to the largest market traders in Q4 2021. Alongside this ‘vampire attack’ on OpenSea, X2Y2 brought a number of interesting cryptos.
So X2Y2 is the only NFT market with profit sharing mechanism that makes earning processes on Web3 more democratic. In addition, X2Y2 allows its customers to buy and sell NFTs in ‘bulk transactions’ and pay for one transaction rather than many, to enable its clients to reduce transaction costs.
What are metaverse coins?
Metaverse is an integral class of virtual reality platforms that mimic real-life experiences in the online world. Unlike 3D strategies, Metaverses typically mimic ‘serious’ elements of real word infrastructure and their use. However, some high-end games also market themselves as Metaverses.
Neal Stephenson coined the term ‘metaverse’ in his 1992 novel Snow Crash. From 2021-2022, journalists and enthusiasts started using ‘Metaverse’ for various immersive social interaction platforms on Web3, a decentralized iteration of the internet. The integration of cryptocurrencies as payment methods or governance tools is another key element of Metaverses. That’s why Metaverse-themed projects are on the agenda for the global cryptocurrency community.
Why are metaverse coins popular?
Metaverse coins have become increasingly popular due to a combination of catalysts. First, the profitability of Metaverse-associated tokens. Axie Infinity’s AXS, Decentraland’s MANA, and lower-caps Metaverse tokens (ILV, ALICE, YGG) spiked thousands of percent in a matter of weeks.
Then again, the hype around Metaverses stems in part from previous crazes, namely the euphoria of DeFi, NFT, and GameFi. The concepts of GameFi and NFT as metaverse are deeply interconnected. Many enthusiasts decided to join all these movements. Finally, super-aggressive shillings from brands and influencers have also contributed to the Metaverse craze. Almost every big name in tech and fashion has announced the ‘opening’ of this or that Metaverse.
The best metaverse coins
Decentraland (MANA)
Decentraland was activated on the public mainnet in February 2020. The first successful Metaverse project to achieve mainstream adoption. The developers launched Decentraland on the Ethereum main-net and is managed by the nonprofit Decentraland Foundation. It received $26 million in funding through an ICO in 2017.
Decentraland is a 3D virtual world where anyone can buy a parcel of land to hold an event and interact with other players. In addition, there is an ecosystem of in-game properties for wealthy customers. Meanwhile, Sotheby’s held its first virtual auction on the Decentraland Metaverse. Metaverse Fashion Week in March 2022 saw the participation of Dolce & Gabbana, Tommy Hilfiger, Estee Lauder, and other big brands. Also, some great artists have performed in Decentraland, including Grimes.
Axie Infinity (AXS)
Unlike Decentraland, Axie Infinity is more like a 3D game with integrated NFT-centric mechanisms. It was introduced in 2018 by Vietnamese software development studio Sky Mavis.
In Axie Infinity, players purchase and tame fictional axolotls to use in battles with each other. Sky Mavis takes a commission of 4.25% from every in-app transaction. The game has two tokens: AXS and SLP. It also leverages its own side-chain, the Ronin Network. Despite its global adoption, most of the Axie Infinity players are from the Philippines. As the initial phase of enthusiasm around metaverse coins faded, the median ‘income’ of professional Axie Infinity players fell below McDonald’s full-time employees.
Sandbox
Sandbox takes its origins from the 2012 mobile game for iOS and Android-based devices. In 2018, its developer, Pixowl, was acquired by Animoca Brands, Web3’s largest play-to-earn (P2P) and NFT heavyweight. In 2020, it raised $4.5 million in two funding rounds led by Hashed to move to the 3D Blockchain-based gaming ecosystem.
The beta version of The Sandbox was announced to the public in April 2021, while the first version of its alpha was released in November 2021. He has inked a number of partnerships with celebrities such as Snoop Dogg. In addition, major players and brands offer various activities to their visitors at The Sandbox. The third season of Sandbox Alpha kicked off on August 24, 2022, with 22 brands and celebrities participating and over 90 experiences.
Top metaverse brands
Since 2020, countless big brands in tech, fashion, lifestyle, fintech and more have jumped on the Metaverse bandwagon. For the most part, they were attracted by the solid hype and the unique promotional potential their metaverse initiatives and partnerships bring.
Meta
Facebook’s rebranding as Meta is among the most overrated events of the ongoing Metaverse craze. At the same time, Zuckerberg’s bet on Metaverse coins and NFTs did not lead to groundbreaking developments. So far, Meta’s Metaverse is like a 2D game from the 1990s. At the same time, alongside this product, Meta is focusing on integrating NFT functionality into its flagship services Facebook and Instagram social media platforms.
At the same time, the emphasis on Metaverse development remains largely a promotional strategy for Meta. Despite a lot of hype, the Metaverse offering is far from achieving anything.
Gucci
Luxury clothing brand Gucci is among the first top names in global fashion to join the Metaverse enthusiasm in 2022. Gucci is a long-term partner of the virtual game Roblox. In 2021, Roblox hosted a two-week Digital Garden event by Gucci. During this campaign, Gucci sold the virtual version of the bee-embroidered Gucci Dionysus bag for over $4,100.
In March 2022, Gucci opened its permanent residence in Roblox, called Gucci Town. Gucci creative director is preparing to show the vision of Alessandro Michele to a wider audience. Also, Gucci’s concept store is on The Sandbox, a high-end Metaverse ecosystem.
Xiaomi
In December 2021, Xiaomi announced that it was ready to join the Metaverse enthusiasm. Interacted with The Sandbox and Decentraland. Xiaomi Redmi Note 11 smartphone was launched with instruments designed for 3D experience.
Xiaomi has also created the first virtual showroom to showcase its production in an immersive and user-friendly way. That is, Xiaomi fans are allowed to visit virtual stores and use smartphones, air purifiers, Redmi Buds speakers, etc. allows it to be purchased. In terms of marketing, this Metaverse journey is aimed at generation Z or ‘zoomers’.
Medium-term prospects for NFT and Metaverse coins in 2022
To summarize, both NFT and Metaverse segments are still in a bearish trend in Q4 2022. However, analysts’ medium-term expectations look different:
- Metaverse coins have witnessed a capitalization drop of 80-95%. NFTs, on the other hand, lost 40-60%. Therefore, the NFT segment has much greater potential for recovery.
- The NFT segment will transition from recreational uses to ‘real world’ use cases. Tokenized certificates, proofs of participation (PoAs), etc. will soon replace apes and mutants.
- In the next bullish run, NFT and Metaverse coins will be in the spotlight again.
