In a world where the cyberspace is gradually turning into a vast stage of digital assets, a dramatic reduction in trading volume of non-fungible tokens (NFTs) has sounded some alarm bells. The findings of a recent report revealed a 41% drop in NFT trading volume in the second quarter of 2023. It is speculated that the interest of new entrants in NFTs has started dwindling, possibly due to a lack of novel use cases. This has had a direct impact on the sales of NFTs, which almost halved between the months of January to July.
Today’s market portrays a contrasting picture of the enthusiast-driven NFT craze witnessed last year. With the dip in volume, highly sought after collections such as Bored Ape Yacht Club and Azuki witnessed their floor prices fall to an unprecedented two-year low. This clearly indicates a cooling off of the initial trader exuberance that once prompted sky-high prices.
However, not all seems gloomy in the world of digital assets. Amidst the downturn, one winner that has emerged is the Polygon NFTs. Dominating a fair share of trades in July, Polygon continues its reign. The resilience can largely be credited to Web3 developers who, undeterred by falling numbers, are diligently churning out millions of smart contracts across EVM-compatible chains. Their steadfast interest in creating decentralized applications and broadening Web3 use cases has helped retain buoyancy in the segment.
The aviation industry taking a dip into blockchain technology is another silver lining. Taking the lead, Etihad Airways announced its intention to launch a Web3 loyalty program, “Horizon Club”. This novel program will open up avenues for collectors to stake their NFTs for miles and then redeem these for flights, upgrades and other lucrative benefits. Web3 loyalty programs are gradually becoming a trending norm, with several major brands jumping onto the bandwagon.
A non-profit offshoot, Open Ordinals Institute, has been recently established by Ordinals, a protocol that allows NFTs to be added to the Bitcoin blockchain. This initiative is an attempt to ensure the neutrality and departure from corporate influence of their developers.
In spite of the challenging terrain, digital artists such as Beeple have stayed committed in their quest of shaping the NFT landscape. While the ripple of inconsistency continues to impact the broader market, speculative moves like that of Beeple buying high-valued CryptoPunks and planning a meetup are encouraging indications that rejuvenation of the NFT market is round the corner.
Hence, the current reports of a downturn in NFT trading may not necessarily spell doom for the industry. A thorough investigation reveals a deeper narrative, veering towards cryptocurrency market maturity, adoption of Web3 technology and the carving out of new ways to ensure developers get their due credit and compensation.
Transitioning to a digital realm in art, and now aviation, points towards an ongoing evolution. Blockchain integration, NFTs, and smart contracts won’t be going anywhere anytime soon. As the fair share of gloom and glam continues to oscillate, one thing is certain: we have only just begun unwrapping the future.
Source: Coindesk
