NFT market: understand this bubble and its true potential!

NFT market: understand this bubble and its true potential!

The NFT market, along with the asset token and the cryptocurrency, form a tripod of technological revolutions in the way we consume, invest and do digital business.

However, the non-fungible token is in a prominent place.

The idea of using an encrypted file, generated in a high-speed, efficient, and data-secure digital environment – the blockchain – to trade in absolutely unique and high-value assets is not without appeal.

The whole world seems to be talking about NFT and being surprised by some figures, even if there has been a recent slowdown: according to NonFungible.com, there has been a 47% drop in NFT transaction volume between the last quarter of 2021 and the first quarter of 2022.

No doubt this is the time when all the excitement about news of million-dollar deals with NFT subsides and people and companies start to evaluate the potential of NFT for their business.

Therefore, BLOCKBR will talk about the NFT market and how it can bring perennial and stable profits!

WHAT IS AN NFT?

The NFT(non-fungible token ) is a category of token that represents something that is infungible – that is, the tokenized good cannot be replaced by another item of the same kind or by any other good, even if in a larger quantity.

It is produced within a blockchain – the environment where digital currencies and asset tokens are created and traded – and used to digitally represent works of art, historical items, collectibles, and other items that are offered on the market.

In common, these goods have uniqueness, exclusivity or absolute scarcity – attributes that make them extremely valuable.

The NFT associated with the asset acts as an attestation of authenticity and ownership, because no information about the NFT on the blockchain can be changed after the sale.

Infungible tokens have gained notoriety with cryptogamesblockchain games like Axie Infinity – where players can create and trade 100% unique skins, outfits, utensils, and characters.

This move has caused the NFT market to grow 700% by 2021 and is helping to expand the cryptoactive into business strategies where the product has one or more of the attributes.

In favor of using NFT in other markets are the simplicity of creation, the agility of offering, and the high level of security of the blockchain.

NFT IS INVESTMENT?

NFT is an asset of belonging and influence in 99% of cases. It is not considered a valuable financial asset because it does not generate passive income.

When we talk about NFT of works of art or historical items, the assets appreciate in value over time, but for their uniqueness, uniqueness, and historical importance.

The devaluation can be for the same reasons.

A great example is the NFT from the first tweet: sold in March 2021 for almost $3 million, offered at auction with an expectation of raising $25 million and a final top bid of $277.

Maybe the attempt was too fast.

If you buy a Bored Ape from Neymar’s collection, you will probably die with it in your hands or lose money, because of the low historical appeal.

These examples bring us back to two important premises:

  • NFT does not value the asset itself, but for the differential of authenticity and proof of ownership immutable on the blockchain
  • NFT is an excellent way to trade assets, whether unique or not. This makes the technology grow so much in the most varied market niches and audiences.

Therefore, we can say that NFT is investment in business.

COMPANIES THAT ARE INVESTING IN NFT

COMPANIES THAT ARE INVESTING IN NFT

We are going through an NFT bubble where marketing is, for some, more important than monetization and awareness, which ends up driving away many companies that want to invest in NFT but have doubts about the future of the resource.

Gradually, this bubble is losing steam and the difference between digital assets that represent operations and digital assets that represent only experiences is becoming clearer.

At the same time, the versatility of using NFT and the security of blockchain attract companies that understand that investing in NFT is not the profit-making activity itself.

The product remains the center of the process and the token is an important part in enhancing it with its benefits – security, authenticity, and digital ownership.

ENTERTAINMENT

This is the sector where NFT has been developing creative strategies with excellent results. Many music artists are offering unreleased songs, prime seats at concerts, meet & greets, and access to videos.

Recently, singer Milton Nascimento announced the sale of 400 NFT tickets for a closed concert of his last career tour.

LUXURY FASHION

Several luxury fashion brands are investing in digital assets in NFT of exclusive garments on blockchain gaming platforms and metaverse environments.

SPORTS

The sports market is one of the markets with the greatest potential for business and profits with NFT in its products, because it naturally has a loyal audience (fans) and can exploit the collector spirit that is a tradition in the sector.

Tokenized NBA game tickets elevate the quality of the fan-club relationship, while several athletes, such as Usain Bolt and Tom Brady, sell tokenized NFT memorabilia on the Autograph platform.

NFT in the sports market has an additional advantage: it benefits a chain that goes far beyond clubs and athletes – it can lead to NFT sticker albums or tokenized historical tickets!

As we can see, uniqueness and exclusivity are not always prerequisites for offering a good in NFT. Scarcity is an important trigger and often the main attribute in the strategy of most NFT token deals.

This is a characteristic of NFT when it becomes an ingredient in the strategies of the most diverse markets.

HOW TO INVEST IN NFT

Those who think that only the fashion, art, sports, and entertainment markets are capable of generating profitable business with NFT are mistaken.

In fact, technology allows all the concepts of these niche strategies to be replicated in other sectors, especially the attraction and loyalty through the offer of unique content and with an immutable seal of authenticity.

Member clubs, with special offers, discounts on purchases and events are some of the possibilities for successfully adopting non-fungible tokens.

Of course, not all niches have a cost-benefit ratio that justifies tokenizing products. This analysis remains the responsibility of the marketing teams, considering the target audience and other factors.

However, it is undeniable that in the medium to long term, NFT can be used by all businesses as the creative basis of NFT – blockchain, cryptocurrencies and tokenization – becomes popular.

TOKENIZATION AND NFT

Non-fungible tokens are created within the blockchain with tokenization technology, the representation of any and all assets, goods, or rights in tokens.

This process can be done with both physical assets – as is already the case with real estate tokenization – and a digital asset by definition – a new product/service or the digital version of it.

So a company can create a token to offer its shares, called a security token, up to an exclusive NFT platform for experiences, such as a winery offering tours of its facilities.

Tokenization with NFT has no limits. There is a big window of opportunity that all businesses can take advantage of!

BLOCKBR Digital Assets is a fintech that combines technological innovation and digital knowledge to transform physical assets into digital ones, in the asset tokenization process.

The offer of tokenized physical and financial assets, both current and new, is democratic and decentralized, which makes investing safer, simpler and more efficient.

We enable, structure, issue and offer tokens on our platform and beyond. Be aware that tokens depend on feasibility and regulatory factors.

Do you want to tokenize your business or part of it? Do you have a business solution and does it make sense to issue your own token ?

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e-Book sobre Tokenização Gratuito!

Baixe agora o Guia sobre Tokenização para Iniciantes da BLOCKBR e entenda mais sobre essa Inovação!