A sharp drop in the price of non-fungible tokens (NFTs) should not be seen as a sign of distress, but rather a signal that the technology is maturing, Web3 executives said.
“I wouldn’t say the NFT market has declined,” Yemel Jardi, executive director of the Decentraland Foundation, told Cointelegraph. “It’s more mature.”
Jardi’s comments come after a September report from dappGambl that analyzed more than 73,000 NFT collections and concluded that as many as 95% of NFTs examined had no value, as prices, sales volume and transactions have increased over the past year decreased.
Jardi emphasized that markets are cyclical and it is normal to have periods of adjustment.
He attributed the falling NFT price floors in part to “speculative trading” and said the value of NFTs should instead be anchored in their utility.
“As people become better informed about NFTs, their use cases and their utilities, the market will stabilize and the focus will shift from speculative trading to real utility and innovation.”
Anjali Young, co-founder of tokenized community management platform Collab.Land, is also not surprised by the anti-NFT sentiment.
“Any innovation – especially those with financial impact, cultural value and status – will raise questions during the recession,” she said.
Young believes that many projects have failed since marketplaces like OpenSea eliminated mandatory royalty fees in late August.
Despite this, Young claimed that NFTs are “here to stay” and expects them to be used more frequently in the coming months for loyalty programs, rewards, advertising and proof of authenticity.
They left us all for dead and say 95% of NFTs are worthless.
But the truth is very, very different.
Look no further than car companies and their adoption of NFT technology️
From collectibles to supply chains, perhaps no sector is more optimistic about Web3.
A short thread
– Rarity Sniper (@RaritySniperNFT) September 23, 2023
Tama Churchouse, chief operating officer of Cumberland Labs, recently opined that NFTs are not “dead,” arguing that recent developments in spaceflight show that there are still signs of life.
While the NFT market is primarily dominated by digital art, Jardi said non-fungible tokens remain an important tool for the broader digital landscape because they can signal ownership of tangible assets to users in new ways.
Wow, someone just designated a $26.5 million building in one of New York City’s most prestigious areas as #nft.
Dealing with property rights through NFTs is a very exciting application to cut out the middlemen. #realestate #nfts #NFFTCommunity #nftcollector pic.twitter.com/PowOwwMZsb
— Chris Wieduwilt (@deloreanchris) June 6, 2022
Jardi believes that governments and institutions will use NFTs for different use cases in the future. On October 9, China’s state-run newspaper China Daily announced plans to launch a platform for trading digital collectibles.
The entertainment sector is another huge market that the NFT industry can capture, according to Scott Lawin, CEO of sports token platform Candy Digital.
Lawin told Cointelegraph that 24% of Major League Baseball fans entering stadiums with mobile tickets in 2022 have redeemed their free commemorative Candy digital ticket as a form of memorabilia.
“Those are all utilities of NFTs in real time,” Lawin added.
On the brand side, Adidas, Bud Light, Gucci, Prada and other companies delving into the NFT space have seen a recent increase in the number of active users on their Discord channels, Young said.
According to data from Forbes Digital Assets, the NFT market cap currently stands at $5 billion. Yuga Labs’ CryptoPunks and Bored Ape Yacht Club collections are the two largest, with market caps of $710 million and $400 million, respectively.