2021 was the Year of the NFT’s.
Who would’ve thought that the rise of digital art (a simplistic way of describing NFT’s) would be so successful? A GIF file of a cartoon Gucci ghost was sold for 3,600 US dollars and now the owner is asking for 16,300 dollars. The influencer Logan Paul had a Pokémon card made and sold for 20,000 dollars. Grimes sold a video for 390,000 US dollars. All digital and therefore only available on the metaverse.
We could have an endless list of such transactions, but the point is made. NFT’s are the deal of the year. And 2022 could be the year when these non-fungible tokens take it to the next level.
NFT’s are indexed on the Ethereum blockchain in their majority. This means that you can acquire and sell them again for a profit which can be then exchanged for fiat currency. So yes, you can really make money with NFT’s and that’s a big part of their success.
Take one of the most famous cryptocurrencies like Bitcoin. Its popularity rose to levels where today it’s being accepted on different marketplaces as a way of payment. The casino industry for example, is embracing BTC payments on platforms in markets as far as South Africa where sites are offering a list of bitcoin casinos operating on the region.
And right now, the most popular talking point in the NFT world is the play-to-earn projects that are making millions in trading marketplaces. Such tokens are directly linked with the metaverse as we’re talking of games involving avatars in virtual worlds.
The most popular of these are Decentraland and Sandbox. Both tokens had their value skyrocket after the announcement of Facebook getting seriously involved with the metaverse. And it’s important to note that even thou we’re talking about the metaverse, it’s not the same in any of these projects. The different metaverses are independent, but the sole fact of such a big tech-company sharing it’s future purposes in the metaverse is proof that this digital ecosystem could be the next big thing, and the tokens developed in these metaverses will be a big part of the foreseeable success.
Decentraland for example, allows users to create territories based on their imagination or inspired on the rest of environments created by other users. Places as crazy as futuristic cities or medieval citadels, the possibilities are endless. These territories can be sold for huge amounts of money, and now even companies are buying digital assets to advertise their products in people-owned digital land in Decentraland.
The Sandbox is another long-lasting project that was released as early as in 2011. Through the years it built a community of 40 million users and more than 70 million items inside the game’s universe, building a core of assets that until the latest developments of cryptos and NFT’s didn’t have much value. Thanks to the impact of NFT’s, Sandbox shifted its business model. Now users are creators and can monetize the assets they create on the platform and it’s a talking point in many financial platforms. Just like in Decentraland, virtual spaces are the core of The Sandbox and they are being auctioned for even millions of dollars.
A different system if the one of Axie Infinity. This play-to-earn token can be mined by players that acquire Axies: this avatars are bought on the Axie marketplace with Ethereum and then they are used on the game for battling and adventures that level up the Axies, just as if they were some kind of Pokémon. Axies are being sold for thousands of dollars and by completing daily quests, players can mine SLP, the NFT of Axie Infinity. At the moment, an average of 2 hours a day of mining (meaning playing the game) can get you between 1,500 and 2,000 dollars’ worth of SLP in a month.
It’s worth mentioning that the accumulation of capital in the industry of tokens of the past months made it that investors somehow cashed-out in profits in the month of December. This caused the biggest drop in values of the year. In any case, this only means that the curve will in some point change its trend so it could be a good time to start investing in some of these promising projects. Just remember the motto of this industry before attempting any inversion: Do your own research (DYOR), as everything can quickly change from one day to the other.