NFTS FIND TRUE UTILITY WITH THE ADVENT OF THE METAVERSE IN 2021
NFTs Utility With the Advent of the Metaverse
With 2021 behind us and 2022 well underway, we’re taking some time to look back at the rise to fame and growth in popularity of NFTs and the Metaverse in the last year, which was by far their best year yet. In fact, a 2021 industry report by online crypto data aggregator DappRadar found that in total, there had been over $23 billion in NFT trading volume and the floor market cap for the top 100 NFT collections reached an impressive $16.7 billion. Not only that, but NFT-based blockchain games took off as well, with 49% of unique active wallets connecting to gaming decentralized applications (DApps), bringing gaming NFT trading volume to $4.5 billion. These numbers are expected to increase as time goes on, but how did we get to such record highs?
NFT collectibles began to take off in 2017 with the release of the cartoon cat collecting and breeding simulation game CryptoKitties. By that same November, the website reached a peak of 140,000 daily users and 180,000 daily transactions, only to have those numbers subside with the eventual introduction of other presently well-known NFT projects including CryptoPunks, Bored Ape Yacht Club, and NBA Top Shot. Additionally, the release of play-to-earn (P2E) GameFi title Axie Infinity in March 2018 gave players a unique way to earn a source of income (the in-game cryptocurrency reward token Smooth Love Potion, or $SLP) by collecting, battling, and breeding mythical creatures inspired by axolotls called Axies. Since then, P2E games have taken off in their own direction with games of all genres being developed and enjoyed on various blockchains, carving out a niche market at the intersection of decentralized finance and gaming while providing reward incentives to their players in the form of NFTs and cryptocurrency tokens.
It seemed like the hype surrounding the Metaverse and NFTs reached new heights in late October 2021 when Facebook announced it would be changing its parent company’s name to Meta and work to fully embrace and develop their vision for the Metaverse. Tokens from existing metaverse games such as The Sandbox and Decentraland subsequently shot up in value, as did the prices of their in-game NFTs. Another major factor that helped NFTs go mainstream were the jaw-dropping sales numbers for record-breaking NFTs such as CryptoPunk #4156, a 24x24 pixel art piece of an ape wearing a blue bandana which sold for 2,500 ETH ($10.2 million at the time), as well as digital artist Beeple’s massive collage “Everydays: The First 5000 Days” which sold through the famous British auction house Christie’s for 42,329 ETH — an astounding $69,346,250 at the time — smashing every previous record and still remaining the most expensive NFT ever sold to an individual to this day.
Nowadays, with such vast opportunities available to capitalize on the success of NFTs and the Metaverse, we’re starting to see big brands mint NFTs of their own and large corporations gearing up to fully immerse themselves in the space. This expansion alongside the development of countless blockchain games will only further help mainstream adoption in the world of Web3, and it’s truly an exciting transitionary period to witness it all occur in real time.
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