DeFi continues to rage, approaching a $10 billion peak. But the latest talk of the town is NFT. In 2017, it was CryptoKitties; this time, it is digital art.
Non-fungible tokens are a special type of token on the Ethereum network that are using ERC-71 and ERC-155 standards to create verifiable digital scarcity.
DeFi to NFT was the fastest narrative shift I’ve ever witnessed. Even by crypto standard.
— Qiao Wang (@QwQiao) September 21, 2020
The crypto community is betting big on digital art, as evident from the fact that the sales on NFT marketplace Rarible surpassed $5 million this month. One such art, a bronze Bitcoin Bull by Trevor Jones, was sold for $55,555.
“Collectibles are a billion-dollar industry. And this is a digital era in the world. Just look at social media crypto and our phones,” said trader Josh Rager who believes NFTs are here to stay and compared them to investing in digital money.
The potential of NFT is in the fact that it has a wide market. With the potential to make intellectual property liquid, from music, podcasts, videos, anything can be tokenized and traded on verifiable marketplaces. Having a stake in the dominance platform can be valuable.
BlockTower has been excited about NFTs since our launch 3+ years ago, but we expect to triple down over the next 6 months and allocate $10m+ to the theme. Shill @xxstevelee (my colleague most focused on the sector) with ideas and pitches. A thread on NFTs to follow /1
— Ari Paul ⛓️ (@AriDavidPaul) September 21, 2020
There is already massive demand for centralized gaming items, and as AR/VR worlds accelerate, the same will be the case for scarce digital art, said Ari Paul of BlockTower.
Bitcoin proponent Anthony Pompliano is also betting big on this relatively new market. He believes, “Digital art is the next evolution of art,” where the traditional art market has a market cap of $65 billion.
A Growing Sector
According to NonFungiable.com, the NFT space recorded around 33,000 transactions of around $3.5 million over the past month.
Amidst this NFT craze, MEME token exploded in popularity, and its price jumped to an all-time high of $1,962 yesterday, up from mere $6.37 just over a month ago, only to crash to $773 today.
Meme basically enables users to stake tokens to farm limited edition NFTs or crypto art. This art can then be resold on the market on platforms like OpenSea and SuperRare. The SupreRare NFT marketplace has “grown at an impressive rate” this year, noted Mason Nystrom, a research analyst at Messari.
Rarible, however, is currently the dominant force in the NFT space, where one can create and sell their digital collectibles. By introducing rari rewards for buying and selling collectibles, it overtook other NFT marketplaces.
RARI tokens also give the holders a right to vote in the governance process and currently trades at $5.71, down from its ATH of nearly $11 on Sept. 10.
Before July 15th, the sale of Rarible NFTs was mostly non-existent, but with the launch of RARI token and a liquidity mining incentive program, the sales on the platform surged to over $6 million, becoming 10x of OpenSea.
Another token with liquidity mining in the form of NFTs where creators can stake their talents for tokens is Whale. This social token has a market cap of $16 million, which is backed by a $1 million portfolio of NFTs.
“This transition to a digital art world is not a question of if it will happen, but rather when. In fact, I personally believe that the digital art market cap will grow to become larger than the physical art market cap,” said Pompliano.