The world seems to be in a constant state of flux thanks to various technological advancements over the years. Lately, it seems like Non-fungible Tokens (NFTs) are undoubtedly the latest wave in this flux.
In simple terms, NFTs are non-fungible blockchain tokens. Unlike bitcoin and Eth, which are fungible tokens and can be swapped for one another( given similar monetary values), NFTs cannot be swapped. It is this feature that allows them to confer ownership of the digital assets they’re attached to.
The NFT market is growing exponentially. According to a report by nonfungible.com, the total trade volume of NFT transactions rose from $500 million to $700 million between Q1 and Q2 2021. According to the DeFi dapp store, DappRadar, these numbers shatter those of the previous year.
At the end of 2020, DappRadar reported the NFT trade volume at just shy of $95 million. However, six months into 2021, that number stood close to $2.5 billion. Numbers like that signify a burgeoning market – one with opportunities for start-ups and small businesses paying close attention.
How Startups Can Benefit From NFTs
Giving digital artists a medium to sell their art similarly to their real-world counterparts is just one aspect of the NFT space. Other applications exist for those who can make the connection. Here are a few examples:
Induce Or Maintain TOPA (Top Of Mind Awareness) Among Your Customers
Startups and small businesses can take advantage of the growing interest in NFTs to release theirs, with themes relevant to their niches.
Taco Bell’s recent NFT auction is an example of such a move. The restaurant chain sold out a collection of NFT pieces (which they called NFTacoBells) created to celebrate the return of potatoes to its offerings. Starting at a bidding price of $1 each, the entire collection of 25 NFTs sold out within 30 minutes. One of the pieces, “Ever-Crunching Tacos”, was sold at $3646.
The proceeds from the auction went to Taco Bell’s Live Mas Scholarship program.
While you don’t have to follow Taco Bell’s strategy exactly, it is an excellent example of how NFTs can help drive customer engagement.
Say Goodbye To Inauthentic Products Forever If Your Startup Is Into Fashion And Consumer Goods.
The general use of NFTs so far has been to create and grant ownership of digital assets. However, it is also possible to tie NFTs to physical goods, similar to the way barcodes are used as an identifier.
Trace Network Labs is a startup that seeks to enable clothing manufacturers to mint an NFT for every product made. The main advantage over barcodes is the universality of the technology- NFTs are unique across all Ethereum blockchains, while barcodes have different standards depending on the organization. This implementation will make NFT tagged clothing easier to track and identify.
Tap Into The Growth Of The Digital Collectibles Market That Nfts Are Enabling.
Previously, collectors could only practice their hobby using physical items such as clothes, gift cards, autographed objects, etc. Now, this hobby can extend to digital items as well, in the form of NFT collectibles.
This trend is most apparent in the videogame industry, with titles such as Fortnite and Roblox collaborating with fashion houses like Gucci and Balenciaga to create in-game clothing collections that players can purchase for their avatars.
Although Fortnite and Roblox didn’t use NFTs during their fashion collaborations, their implementation of the idea is only a step towards a world where digital assets are just as valuable as physical assets.
Asides from this, the founder of Chibi Dinos, Sean Kelly, has adequately taken advantage of this trend and has raised over $2M for his NFT project. In a recent interview, when asked how the NFT landscape will differ one year from now, he shares, “The NFT landscape changes so frequently, it’s quite hard to say. I’d say by then, most 2D picture for proof and profile pic (PFP) projects will be irrelevant and only the ones with strong communities and utility will survive.” This hints at the direction upcoming startups should follow if they want to invest in the NFT space.
Become Brokers For Clients Looking To Grow Wealth With The Crypto Goldrush
Investors such as billionaire Mark Cuban and football stars Antoine Griezmann and Rio Ferdinand, among others, are placing their bets on the growth of the NFT space.
Cuban, for instance, has investments in the NFT marketplaces, Opensea, and Mintable.app, to mention a few. He also launched a gallery called lazy.com, where people can show off their NFT collections. According to Cuban, it’s the smart contracts involved in NFTs that excite him.
Smart contracts are programs on a blockchain that contain agreements between two parties. Once the agreement standards have been reached, the program will be automatically executed – removing the need for a middle man.
Moving on, another company, Dapper Labs, was recently valued at $7.6 billion after a funding round of $250 million. The company is behind the NBA Top Shot digital cards – a bunch of NFTs attached to either digital art or video highlights of memorable basketball moments. While entry-level packs are sold as low as $9, some of these highlights have been listed for as high as $450,000.
Also entering the NFT game is Sorare, a fantasy football platform that raised $680 million in funding and is valued at $4.6 billion. The company boasts investors such as Antoine Griezmann and Rio Ferdinand and Venture Capital firms such as Atomico and Besser Ventures.
As more and more firms discover more ways to market NFTs, the market cap will continually increase. Finance startups and small businesses looking to utilize this opportunity will do well to study and analyze market trends and offer their services as advisors for investors looking to grow wealth.
Slash Real Estate Purchasing Costs by as much as 99% Using Blockchain Technology.
Fabrica is a company that has solved an age-old problem in Real Estate finance: reducing the cost of purchasing real estate. Typical charges associated with real estate purchases can be as high as $30,000. However, Fabrica has been able to lower this amount to as little as $300.
The company has achieved this by placing property in trusts. These trusts assign ownership to the possessor of an NFT attached to that property. Fabrica then lists these properties on their platform and transfers the assigned NFT to buyers when they make purchases.
Other companies working on using blockchain technology to innovate real estate include TokenTrust, Atlant, and Velox.RE, to name a few.
Conclusion
NFTs are blockchain tokens with unique IDs. These tokens are usually attached to an item. Anyone who possesses the item with the token is deemed the ‘owner’ of the item, irrespective of the number of available copies.
This feature allows people to own digital assets the same way they own physical assets and expands the purview of objects a person can own.
While still in its early stages, the potential uses for NFTs are vast and cut across multiple industries, and startups and small business owners with aligning interests should take advantage of these opportunities.
