The recent sharp drop in nonfungible token (NFT) prices is not indicative of a crisis but rather a reflection of the maturation of the technology, according to leaders in the Web3 space.
Yemel Jardi, the Executive Director of the Decentraland Foundation, stated, “I wouldn’t say the NFT market has regressed; rather, it’s maturing.” His remarks followed a September report by dappGambl, which analyzed over 73,000 NFT collections and suggested that up to 95% of these tokens held no value, as prices, sales volumes, and transactions had declined over the past year.
Jardi emphasized the cyclical nature of markets, attributing the slide in NFT floor prices to speculative trading. He argued that the value of NFTs should be linked to their utility, suggesting that as people become more educated about NFTs and their use cases, the market will stabilize, shifting its focus from speculation to genuine utility and innovation.
Anjali Young, co-founder of Collab.Land, a tokenized community-management platform, acknowledged the skepticism towards NFTs but asserted that innovation often faces scrutiny during downturns. She suggested that the removal of mandated royalty fees on marketplaces like OpenSea in late August contributed to the negative sentiment. However, Young remained optimistic about the future of NFTs, anticipating their increased use in loyalty programs, rewards, advertising, and proof of authenticity.
Tama Churchouse, Chief Operating Officer of Cumberland Labs, also challenged the notion that NFTs are “dead,” pointing to recent developments as evidence of their vitality.
While NFTs have been primarily associated with digital art, Jardi highlighted their significance in the broader digital landscape, allowing unique ownership of tangible assets in novel ways. He believed that governments and institutions would increasingly employ NFTs for various purposes, with China Daily’s recent announcement of a platform for trading digital collectibles serving as an example.
The entertainment sector, too, holds immense potential for the NFT industry, according to Scott Lawin, CEO of sports token platform Candy Digital. He cited the successful use of NFTs in Major League Baseball, where fans redeemed digital tickets provided by Candy as memorabilia.
On the brand side, Young noted that companies like Adidas, Bud Light, Gucci, and Prada have seen increased activity on their Discord channels after entering the NFT space.
The current market capitalization of NFTs stands at $5 billion, with CryptoPunks and Bored Ape Yacht Club as the two largest collections, boasting market caps of $710 million and $400 million, respectively, according to Forbes Digital Assets.
