From Magic Eden’s epee-hunting party to Forbes’ multichain mixer, NFT.NYC provided a spectacle of excess and elitism, and even more so in another episode of #hearsay, a weekly gossip column about the sultry underbelly of crypto.
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In the wild west of cryptocurrencies, trends come and go faster than a junkie in a trap. Just when experts were ready to write off non-fungible tokens (NFTs) as dead, the digital collectibles born and sometimes burned on the blockchain might instead be undergoing a renaissance.
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In 2023, as headlines screamed “NFT Bubble Burst” from the rooftops, a split began to emerge in the NFT community – one of which saw the medium slowly begin to move away from the message. A shift that many felt was more in the direction of utility. The promise that blockchain once made to digital artists – royalties ad infinitum – quickly turned out to be a lie, thanks to Blur.
According to recent data, NFT sales fell last quarter, leading many to herald the demise of the digital art craze. However, closer inspection reveals a more nuanced reality.
Take the recent edition of NFT.NYC (which ended on April 5). Founded in 2018, the event exploded in 2021 in the wake of a major bull market in which sales of NFTs reached $17.6 billion, thanks in part to the confluence of cryptocurrency prices, celebrity endorsements and the recognition of NFTs as works of art. by major auction houses such as Sotheby’s and Christie’s. Such events paved the way for a rapid rise in cultural recognition and awareness of NFTs (thanks to Beeple), which once again followed a massive boom/bust cycle that cryptocurrency critics used to portray the entire industry as one giant casino.
In 2022, with the crash of cryptocurrency prices and the turmoil in financial markets following Russia’s invasion of Ukraine, digital assets also took a major hit. Gone were the days of coining a pixelated punk or a bored monkey on Ethereum and flipping it for 10 or 100x profits on events, along came real assets, big brands and e-commerce. According to the industry watchdog’s NonFungible report, the third quarter of 2022 saw a 77% decline in transaction volume, followed by a net loss of $450 million year-on-year.
NFT Quarterly Market Report Q3 2022 – Global Performance | Source: Non-fungible
Still, the NFT market seemed far from dead at the end of 2023. Rather more mature. At last week’s NFT.NYC co-founder Jodee Rich admitted as much, emphatically stating that “the speculative fire is over.”
This speculative combustion, it should be noted, began in earnest last year when two popular NFT trading platforms, OpenSea and Blur, embarked on what many now see as the ‘race to the bottom’ after Blur offered a ‘zero-fee’ marketplace with tools that were designed to also eliminate creator royalties. In response, Yuga Labs and Magic Edgen formed the Creator’s Alliance, which they claimed was a way to enshrine royalty rights, only supporting marketplaces and projects that pledged to honor them.
At last week’s NFT.NYC, the new digital divide couldn’t be more apparent. The hype jocks in hoodies seem to have been replaced by serious technologists, nerds and boring conversations about file storage. At the Museum of Moving Image, Erc Calderon of Art Blocks gave a talk with generative artist Tyler Hobbes on the sidelines of NFT.NYC. At the Museum of Modern Art’s sister location, PS1, NFT storage platform IPFS hosted an event called “The Moment: Art, NFTs and Cultural Preservation,” bringing together representatives from FileCoin and Protocol Labs.
At the Javits Center, the official location for NFT.NYC, the emphasis seemed to be less on technology or art, but rather on sales, merchandising and marketing. Pudgy Penguins, the NFT collection that launched a doll line at Walmart last year, has since raised $10 million from sales of these digital-turned-physical cuddly artifacts.
What’s happening isn’t so much the death of NFTs, but rather their rebranding. So, are NFTs dead? Far from it. Like a phoenix rising from the ashes, they undergo a metamorphosis. What we are witnessing is not the end of NFTs, but rather a recalibration of the market. As investors and collectors sift through the rubble of the recent recession, they are sorting the gems from the rubbish. The froth may have died down somewhat, but the underlying fundamentals remain strong.
Read more: Co-founder of NFT Price Floor predicts a comeback of high-end NFTs despite the market pullback