What's Next for NFTs: Innovation, Utility, and Trends
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What's Next for NFTs: Innovation, Utility, and Trends
With continuous innovation, NFTs are no longer limited to digital art.
Navigating Web3 tides with focused insights
Author: Cryptohopper
Translation: TechFlow Intern
Although the concept of NFTs emerged as early as 2014, their mainstream popularity officially began in 2021. With continuous innovation, NFTs are no longer limited to digital art—this space is rapidly evolving with new trends, utilities, and markets emerging.
According to a report by blockchain analytics firm Chainalysis, approximately $44.2 billion worth of cryptocurrency was spent on NFTs in 2021, a significant increase compared to $106 million in 2020. Let’s review the innovations and new trends in the NFT space that could enable widespread adoption in the near future.
Latest Innovations in the NFT Space
NFT Staking
NFT staking is a way to generate passive income. With NFT staking, digital art collectors don’t have to simply buy and hold NFTs while waiting for their value to rise. They can stake their NFTs and earn staking rewards in the form of APR or APY. However, not all NFTs can be staked to generate income. Several factors—including an NFT’s value, rarity, and ability to generate stable returns—will determine how much staking reward it can offer.
Cross-Chain NFT Platforms
Lack of interoperability limits the potential of NFTs, cryptocurrencies, and other blockchain applications. To address such issues, multi-chain or cross-chain NFT platforms are gradually emerging to remove barriers in NFT collection and trading. NFTs are typically minted on a single blockchain network and thus face the same limitations as the network they were created on. Although cross-chain NFT platforms are still under development, they aim to solve various shortcomings in the NFT space in the near future—such as interoperability, sustainability, and energy consumption.
Future Trends in NFT Applications
Event Access
As interest in developing the metaverse grows, NFTs are finding multiple use cases in both virtual and real-world environments. NFTs can serve as access passes to events—a trend applicable to various scenarios, such as attending metaverse events, gaining entry to exclusive Discord channels, private podcasts, music platforms, and more. Autograph.io, co-founded by Tom Brady, is an NFT platform designed to bring together renowned brands, legendary athletes, and their collectors. This marketplace allows people to purchase NFTs that grant access to exclusive events and private communities.
Redeemability
Redeemability is another empowering trend for NFTs. Collectors can redeem them for different types of goods instead of merely buying and holding NFTs. NFT holders may exchange their tokens for other digital or real-world assets. This trend is expected to grow in the coming years, enabling collectors to redeem virtual goods usable within the metaverse. RTFKT is one such platform, allowing NFT holders to redeem physical products. A leading brand building virtual sneakers and collectibles for the metaverse, RTFKT partnered with digital artist Fewocious to let specific NFT holders redeem a pair of physical sneakers.
Brand Awareness
NFTs are creating new fundraising opportunities for businesses of all kinds. The popularity of NFTs presents a great opportunity for companies to raise awareness and funds. Brands and enterprises can reach their target audiences by launching their own NFT collections. For example, Coca-Cola experimented with this mechanism by releasing its first NFT series, aiming to raise funds for the Special Olympics—an organization dedicated to eliminating discrimination against individuals with intellectual and physical disabilities through sports.
Explosive Growth of NFT Markets
Meanwhile, the number of NFT marketplaces is growing exponentially. When the NFT trend first emerged, OpenSea was the only dominant player in 2021. However, the launch of multiple new NFT marketplaces is now changing this landscape. According to DappRadar, OpenSea remains the leading NFT marketplace, with around $2.64 billion in trading volume over 30 days. LooksRare ranks second, with over $2.3 billion in 30-day trading volume. Launched in January 2022, the platform gained rapid adoption in a short time. With unique features like instant payouts, platform rewards, and airdrops, LooksRare is challenging OpenSea for the top spot.
The Solana network has also gained significant traction in the crypto community following the recent launch of Solana-based NFT marketplaces. As of April 2022, Solana’s NFT sales surpassed $1.6 billion, making it the third most active blockchain network by NFT sales volume, behind Ethereum and Ronin. With ongoing integration between Solana NFT marketplaces and the OpenSea platform, total trading volume is expected to rise further, potentially pushing Solana into second place.
In the crypto community, the NFT trend is not fading anytime soon. The diverse utility of NFTs—along with the ability to generate passive income through staking—will continue to drive growth in the number of NFT holders. With ongoing innovation and development, NFT applications will significantly expand in the years ahead.
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