The hype surrounding NFTs has certainly come down to a simmer. The assets no longer command the same mainstream coverage as they did early last year, nor do they generate nearly the same level of excitement.
In tune with that lackluster showing during 2022, the space hasn’t seen much growth. The past year has seen the focus of NFTs shift from a rampage of digital collectibles to comparatively slowly creating assets with utility.
And this evolution is being spearheaded by on-chain Web3 projects and surprisingly, big mainstream brands.
Big Brands and NFTs
The NFT explosion of 2021 sparked a huge interest in digital assets. Since then, many organizations have been exploring ways to integrate NFTs into their business models.
While some efforts can be viewed as corporate attempts to get a slice of the lucrative crypto pie, others will certainly have a huge impact on the space with their utility.
One such initiative is that by the e-commerce giant, Amazon. Early this year, reports emerged that Amazon is making a foray into the NFT space by launching a “digital assets enterprise.” This airdrop, it has emerged, is more than a set of overpriced JPGs.
Amazon will allow customers to make credit-card purchases of NFTs on its e-commerce platform.
This ability to buy digital assets using a credit card just like one would with any other purchase creates a smooth user experience. Users will no longer need to learn about self-custody or shoulder the risks that come with it, which will make joining the space much less intimidating.
But, there’s even bigger news. Amazon’s NFTs will be tied to real-world assets that can be delivered to the buyer’s doorstep.
For example, someone who buys a gaming-themed NFT might receive a limited-edition sculpture of an in-game item or a figurine of one of the game’s characters.
Overall, this represents a massive shift in the right direction. The lack of any real-world utility has been a glaring problem in the NFT space. It has generated a lot of well-founded criticism and is arguably responsible for slowing down the mass adoption of NFTs.
But projects on this level are changing the game. By bringing NFTs with real-world value and utilities, they’re creating a future where these assets will no longer be souvenirs just sitting passively in crypto wallets. Instead, owners will be able to derive tangible value from their NFTs.
Furthermore, these platforms provide an avenue for users to get NFTs without requiring much interaction with blockchain technology.
They serve an existing user base, meaning users will still be interacting with systems they are familiar with. This makes onboarding so much easier and opens up the space to millions of potential NFTs holders.
Of course, such levels of UX and utility are creating a lot of competition for on-chain projects. Therefore, they’ve had to adapt and bring their A-game to the table.
On-chain Innovation
On-chain projects have traditionally tackled the question of utility through exclusive events and meetups between investors, artists, and holders. But, there are projects that are taking a completely different route.
A good example would be Paribus, an EVM project that’s building an easy-to-use cross-chain, decentralized, lending and borrowing protocol. The project introduces a new kind of utility to the space – using NFTs to derive income and generate opportunities.
They have coined this as ‘NFT-Fi’, a new segment of the industry that sits between NFTs and DeFi. In NFT-Fi, users can access the financial opportunities available in DeFi, like borrowing. But this time, they do so through their NFTs.
The idea of platforms like this is users can borrow against a number of digital assets including NFTs, Metaverse lands, synthetic tokens, and even LP tokens as well as conventional crypto assets.
By placing them as collateral, this will allow them to free up capital without liquidating their assets. That way, on-chain NFTs no longer have to sit idle in a crypto wallet.
So while on the surface it may seem like the crypto industry has slowed down, it hasn’t stalled development. In fact, the movement from large players such as Amazon as well as smaller innovative projects moving the needle may just be the ignition needed for the next bull run.