NFTs are becoming increasingly popular around the world, and understanding the culture around them is key to understanding why some projects are more desirable than others.
But what are NFTs? NFT stands for “non-fungible token”. They are unique and irreplaceable assets living on the blockchain. Game assets, digital art, and collection-related projects are the highlights.
According to Jeff Zeller, Senior Director of NFT Business and Partnerships at Crypto.com, when evaluating an NFT, the first factor to consider is the collection capacity. “Is it something that people find interesting and can enjoy? The collection can be defined by three keys: rarity, style and art”.
Zeller explains that the rarity determines rarityand it can increase the interest. “When we look at collections like EtherRocks, there are only 100 rocks and this is one of the oldest NFT projects to date. Some of the NFTs, within a collection, may also be rarer than others.”
Another important point is that we are in the era of pixel style. When looking at some of the older NFT projects on Ethereum, like “CryptoPunks” or “EtherRocks”, the art might not look as impressive as other projects.
So, we wonder why some are worth so much? The answer is simple: the value has increased exponentially on these older projects because they are Ethereum Legacy NFTs. “It makes these types of projects rare, unique and symbolic of the early days of NFT. NFTs are seen by many as the start of a new art movementhoping the early pieces will prove invaluable in the future,” says Jeff.
Community
Most NFTs offer access to a community, events, and airdrops. For example, each owner of “Loaded Lions” received an airdrop of their second collection: “Cyber Cubs”.
For many, these additional benefits they are the primary motivation for buying an NFT. Jeff Zeller, senior director of NFT ventures and partnerships at Crypto.com, says knowing the team intends to pull off these unique events or benefits is a great way to get a sense of the seriousness of the team behind it. an NFT project.
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“Immersing yourself in a community before buying is a great way to determine the popularity of a project. Celebrities such as Eminem, Post Malone and Snoop Dogg have purchased a Bored Ape and therefore could drive demand for an NFT project.”
Market
From January to April 2022, NFTs moved around $30 billion, according to research by Chainalysis. Although the amount is high and is close to surpassing the total mark of 2021, the year in which the tokens moved $40,000 million, the trading volume is much lower.
A survey by NonFungible shows that average daily transactions have fallen by more than 90%. The result is based on the daily average from January to May, which was nearly 20,000 – significantly lower than last year. This decrease can also be seen in the number of active portfolios. At the beginning of May, they were around 14,000, or 88% less. But is this the end of NFTs? Of course not.
For experts, all technology experiences a moment of explosion and then cools down until it reaches a point of equilibrium. They believe that this technology is entering a phase of maturity and stabilization of the market.
With a stability-oriented market, there are three questions to ask when exploring NFTs: How collectible is it? -determined by craftsmanship, style and rarity-; Does it offer additional benefits and utilities described in a roadmap? Does the project have the support of an active community? With these answers, you can explore the world of NFTs!