The year 2022 has been a year of development for NFTs, unlike the low opening and high development in 2021. During this process, NFTs have experienced the “expectation expansion period” and the “bursting bubble period”. In the bear market of the second half of the year, the market gradually calmed down, and we saw some projects successfully stand out with new gameplay, becoming the top projects in different tracks. Most other projects are being eliminated due to the lack of first-mover advantage and sufficient strength.
Roughly speaking, the current NFT market volume is roughly equivalent to the cryptocurrency market volume in 2017. After the total market value of the cryptocurrency market reached $20 billion for the first time in January 2017, it began a period of decline, losing a quarter of its total market value in two weeks, and then spent a long time continuously repairing and opening a new uptrend. The NFT market may also go through a similar adjustment period, which means that NFT investments will transition from Pareto economics to value investments.
Hot NFT sectors in 2023
1. Music
NFT data released by music platforms in 2022
2022 was the year of the rise of the music NFT market. Compared to the overall sluggishness of the PFP market, the overall transaction volume of music NFTs has slowly recovered, reaching the second small peak of the year in December, with about 422 ETH.
Currently, there are more than a dozen mature music platforms, such as sound.xyz and catalog, which are dedicated to directly connecting issuers and music collectors, emphasizing the concept of “owning” your favorite songs. Since all songs are deployed on Ethereum and have clear royalty contract sharing, this ensures the transparency of artist income.
Music NFTs have many other advantages, such as artists being able to retain 100% of their copyright, and musicians being able to get closer to their audience, with the audience also being able to become “early investors” in the musicians. This will change the way music is monetized and distributed.
2. ENS Domain Names
Monthly transaction volume of ENS in 2022
In April 2022, the sale of Ethereum domain names on OpenSea saw the first peak, with a daily transaction volume of 6,875 ETH, and the number of ENS domain name registrations increased by 119%, with the total number of active .eth domain names increasing by 7%. By the end of September 2022, the daily transaction volume doubled, surpassing 12,327 ETH. The trading volume of ENS domain names increased by nearly 2,133% compared to the previous year.
ENS replaces the long Ethereum public addresses with simple names, effectively solving the problem of easy confusion and difficult preservation of cryptocurrency addresses.
In the more than 5 years since its launch, ENS has gradually developed from the initial Ethereum address resolution to the business card of the Web3 world, and with the development adoption of ENS and the transformation of Web3, it is likely to become the core infrastructure of Web3.
3. Sports Events + Fan Economy
The sports industry has been exploring the commercial value of NFTs. For example, after nearly 5 years of development, the issuance of sports event NFTs has become more mature. Currently, various top sports events globally (FIFA, NBA, NFL, etc.) have entered the NFT field, and facing a huge potential fan market, some project parties are competing for the operating rights.
The value of sports NFTs mainly comes from the original value of sports assets, liquidity premium, and fan consensus. For example, real-life figures such as football and basketball players. User and fan recognition and pursuit of IP and idols will attract more attention from capital. The fan economy is thus formed, further shaping a business model that can generate economic benefits.
How to create a new integrated consumption market for traditional sports events and Web3? This is also one of the focuses of the development of sports NFTs in 2023.
4. Decentralized Social Platforms
One of the most fundamental differences between Web2 and Web3 social media is the different information distribution models.
In Web2, social platforms personalize recommendations based on user tags using intelligent recommendation algorithms. In Web3, information dissemination tends to be social recommendations, with people becoming central nodes of information distribution, and creators having DAOs with themselves as nodes, distributing content and NFTs to fans and rewarding tokens through smart contracts.
This year, more social media giants have entered the Web3 field, such as Twitter, Meta, Instagram, TikTok, YouTube, and Reddit. They are competing for early Web3 seed users by supporting NFT functions and issuing NFTs, and some have achieved very successful results in this year’s NFT market.
In addition, native social protocols of Web3 are also flourishing, advocating for everyone to become their own content distribution center. By unifying personal accounts and completely free personal data, social interactions are recorded in the user’s own ecosystem, which will make NFTs a must for decentralized social platforms.
Conclusion
NFTs will focus more on providing real-world benefits to owners, rather than just staying on properties that have been hyped in the past. The trends in NFTs in 2023 also indicate this, as the number of NFTs with “real” use cases has increased recently.
The NFT space is currently undergoing a significant transformation that has made some people hesitate. From digital artists to major brands, many are leveraging inherent transparency and accessibility. 2023 will see NFTs as building blocks to lay a more solid foundation for the construction of Web3.
