With cryptocurrency prices wavering this year, nonfungible tokens (NFTs) and other sub-ecosystem investors have also found themselves in the grips of a bear market.
However, looking beyond the trading value of Ether (ETH), NFTs were primarily created to represent assets and ownership in the real and virtual world. The bear market, as a result, has reignited discussions around how NFTs can backtrack and focus on attending to use cases while the market recovers.
In a conversation with Cointelegraph, Tony Ling, the co-founder of analytics platform NFTGo, shared insights into the NFT ecosystem, revealing the expected trajectory of the ecosystem.
Cointelegraph: NFTs’ rise to mainstream popularity is often attributed to the various real-world use cases it can and has solved. What is your take on the falling NFT market? Do you think the market is set to recover?
Tony Ling: Answering this question requires explaining the value base of NFTs first. Currently, the NFT market is mainly driven by four categories: art, PFP (profile pictures), land and membership. At the moment, PFP is the most dominant. The value base of PFP NFTs mainly includes three parts: financial products, collectibles/luxury goods and memberships, among which the financial products are currently dominant, whereas the derivatives model of NFTs is still in the very early stage. Therefore, with the overall de-bubbling of the crypto market, NFTs, as a low liquidity derivative of fungible tokens (FT), are bound to fall accordingly. This is to be expected.
However, I believe that as the crypto market picks up in 2023–2024, the value of NFTs has room to grow several times that of the larger Crypto market. Its value growth will come from at least two aspects:
One, with the development of NFTs and meta-universe-related technology, NFT use scenarios will be more abundant, and the consumption property of NFTs will grow, and this consumption property is not only to solve real-world problems but also to create new scenarios that do not exist in the real world.