The crypto world is expanding, and so are the investment options and solutions for investors. One of the best solutions introduced recently is Non-fungible tokens (NFT), aiming to ease the process of owning pieces of digital art. By definition, NFTs are digital certificates designed to show ownership of blockchain-based assets.
Although these assets are blockchain-based like cryptos and stablecoins, they maintain a non-fungibility attribute. You cannot exchange NFTs with another NFT since they all possess unique signatures. The pieces of art popular in the NFT world include music, paintings, drawings, etc.
Recently, NFTs have been a point of interest in the crypto world, attracting millions in investment. But why?-Keep reading to understand more about the NFT craze and what it means for crypto. We will also compare the recent NFT boom to Defi’s surge in 2020.
The NFT Craze
Recently, unlike any other time in the NFT universe, investors have shown great interest in NFTs. For instance, on March 2nd, 2021, musician Grimes sold 10 pieces of NFTs at almost $6 million in less than 20 minutes.
Moreover, in just seven days, NBA top shot made sales worth $147 million. Nifty gateway recently sold NFT for $373 thousand. Additionally, a Nyat Cat NFT meme recently sold at over $600k.
What is the cause of the recent NFTs craze? To understand that, you need to know how NFT helps artists, buyers, and collectors.
NFT for Artists
Artists in NFT are maybe the biggest beneficiaries. Using the platforms, artists can reach their fanbase directly and sell their art at personalized prices.
Moreover, since art changes hands from time to time, an artist can earn some income every time it changes hands.
NFT for Buyers
Buyers can now easily support their favorite artists by buying directly from them. Moreover, a buyer will own a piece of art and post it on social media or use it as they please.
Moreover, once the assets exchange hand, the buyer gets full ownership of the assets, including the reproduction rights.
NFT for Collectors
Collectors who are interested in earning profits through crypto can use NFTs speculatively. The narrative here is collecting the NFTs at a low price but selling them later at a much larger price.
A look at the recent NFT craze proves that buyers, artists, and collectors are all great beneficiaries of these networks.
NFT Projects to Watch-Out For
Aloha NFT Platform
Aloha NFT is launching an NFT platform where users can stake ALOHA tokens on the platform and earn NFTs in rewards. According to some reports, investors have been staking high in Aloha, hitting 8.5 million ALOHA tokens in a mere 24 hours of business.
In Aloha, your staking activities, values, and the length of your stake directly affect your chances of getting better and exclusive NFTs. Therefore, you need to stake larger amounts for longer durations and be active in the platforms.
Aloha provides a wallet that allows users to not only store the ALOHA tokens but also the NFTs earned. After earning the NFTs, you have the chance to unstake and then restake your ALOHA and remain active to earn further.
The Falcon Project
Falcon NFT offers NFT certificates and NFT vouchers for investors’ convenience and benefits. Falcon plans to major in NFTs for comics and rare collectibles.
It uses a unique system embedding a QR code, which when scanned stores the assets into the blockchain directly.
To even strengthen its bid to become the best, Falcon has a dual token system using FNC and FNT tokens.
Adors NFT fits as one project to watch in 2021. Using its native token $ADORS, the platform can provide a world of services for artists and collectors benefits.
Investors can earn passive income through staking and yield farming. Already, the platform has garnered attention and will have excellent growth in the future.
Risks Surrounding NFT
Although great promises are owing NFTs, still, there are tonnes of risks associated with them. It’s indeed an easy way for artists to market their art, but they’re still arises a question of authenticity. Some artists may produce fake pieces and earn fortunes from the platforms.
Although currently, NFT is in a craze, there could be a possibility that this is merely a bubble that could lead investors to millions of losses. However, the NFT producers will ensure the products remain of high value through scarcity and rarity.
NFTs also have severe ecological effects since the blockchains hosting them require some significant amount of power. As such, the electricity costs are high.
NFT Craze Compared to 2020 Defi Boom
However, during the year, Defi boomed, and in the end, the TVL was standing a little over $15 billion.
NFTs have been in crypto for almost three years, but the recent hype places them on the global financial map. The NFT craze isn’t just a bubble; instead, it is a disruption for the content creation industry.
A look into the recent NFT craze shows high prospects of NFT in 2021. Many artists have earned millions for selling their art, and more buyers are interested in NFTs every day. The direct connection that NFTs offer from artists to buyers is what increases the rate of NFT adoption.
Recent projects like Aloha, Falcon, Adors, and Async are some of the best recently launched NTFs. Super rare and Raribles are also trusted NFT platforms that investors should consider. Although the certainty of whether NFTs will plummet, we shall wait and see. However, experts agree that NFTs could be the next big thing in crypto after stablecoins and Defi.