Main events of 2021: NFT and the hype we deserve

In this series of articles, the BeInCrypto editors summarize the year and talk about what events have shaped the cryptocurrency industry.

What happened with NFT

NFT, like the metaverse, is not a new topic. The concept, which appeared in 2017, really took off only in 2021, when major players from the art world drew attention to non-fungible tokens.

In March, one of the oldest auction houses Christieʼs sold the digital artwork by artist Mike Winkelmann in NFT format. The lot, titled “Everydays: The First 5000 Days,” sold for nearly $ 70 million, setting an all-time record for digital art sales.

Since then, the hype around NFT has accelerated. Own tokens were issued by Ubisoft, Nike, Playboy, Morgenstern, Mumiy Troll, the list goes on.

Why is it important

A whole industry quickly emerged around NFT: large cryptocurrency exchanges, including Binance and Coinbase, launched marketplaces for trading non-fungible tokens, and existing sites strengthened their position in the market. There were rumors that Opensea was going to go public, but the company denied this information.

In addition, the NFT mod gave birth to the play-to-earn concept. It is a family of blockchain-based games with gaming assets in NFT format. This summer, all of the Philippines played and made money from breeding NFT animals at Axie Infinitie.

What else happened

The popularity of NFT has added problems to the Ethereum blockchain, which is already creaking under the weight of an avalanche of DeFi applications. NFTs can be issued across a variety of ecosystems including Solana, Binance Smart Chain, and Polygon. However, most of the non-fungible tokens are still issued on Ethereum, putting additional stress on the network.

According to the analytical resource CoinMetrics, at the end of September, NFTs generated 16% of all network activity on the Ethereum blockchain, which was the main reason for the growth of network fees. According to Bitinfocharts, now you have to pay more than $ 27 for a transaction on the network, but in May it reached $ 70.

What to expect from NFT in 2022

NFTs are closely related to the concept of the metaverse and, most likely, interest in them will not fade for a long time. The market is still very young, and just like the metauniverses it is going through a hype stage.

It is very easy to release an NFT, anyone can do it. That is why now the NFT market is 80% filled with practically useless and low-value tokens. However, experts are sure that this is an important stage in the development of the industry: people and companies are now actively experimenting. They try technology by touch, try it on and try to understand what it is good for and how to apply it.

“Such developments also have value as they enable the market to develop. NFT will begin to be applied not only in the field of art, but also in legal relations, ”said Marat Mynbayev, founder of Amir Capital Group.

According to Dmitry Filatov, founder of TopFace, in 2022 the NFT token market will develop in the cycles of the cryptocurrency market, while gaming tokens will be among the most expensive and popular.

“It is interesting to note that the top 10 most expensive gaming NFTs already include gaming NFTs. Most recently, a piece of land from the Axie Infinity game was sold for $ 1.5 million, which confirms my words about the growing popularity of GameFi tokens, “the expert added.

Chen Limin, chief financial officer and head of trading at ICB Fund, believes that the non-fungible token and metauniverse segment will gain additional momentum from the loyalty of FAFT, an Intergovernmental Group that is listened to by regulators around the world. In recent documents, FAFT has stepped up its rhetoric against DeFi while refusing to consider NFTs as virtual assets.

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