Are NFTs Dead? 6 Industry Players Weigh In

Despite the bearish sentiment in the crypto market, there are signs of optimism in the NFT market. We get six industry players to give us insights into the future of the NFT space.
Image source: Deposit Photos

Quick take:

  • Artists who launched NFT collections via Instagram have sold out each time.
  • Newly launched collections like Game of Thrones and Solana-based Bonkz sold out in less than 10 hours.
  • Despite the FUD surrounding Solana, the Shiba Inu-themed Bonkz collectibles surged tenfold after mint.

Ever since crypto winter began, the NFT market has understandably been in a slump. Compared to the peak of Jan 2022, NFT trading volumes have declined 97% from January’s peak of $17 billion to $466 million in September last year, according to data by “@thomas_m” on Dune Analytics.

Furthermore, an NFT market report by ConsenSys shows that weekly sales for Arts & Collectibles have continued to decline since Aug 21, 2022. But in a surprising turn of events, the NFT market has been seeing strong market growth and activity in recent weeks. 

On Thursday, the NFT market hit a 3-month high in both daily users sales count, according to data from Dune Analytics. A total of 88,000 sales were made by 20,000 users over the past 90 days, indicating a surge in interest in NFTs

This can also be seen in collections that were launched in recent weeks. For instance, Aku’s Dream Lab digital collectibles sold out in 11 seconds after launching on Jan 8 on Instagram. The social media platform with 2 billion monthly active users announced in November that it will become a social NFT marketplace that allows creators to mint, showcase and sell digital collectibles authenticated by NFTs.

Other artists that have recently launched and sold out digital collectibles via Instagram include Drifter Shoots (aka Isaac Wright), Refik Anadol, Amber Vittoria, Dave Krugman and Micah Johnson.

By now, it’s common knowledge that community is undoubtedly one of the key ingredients for an NFT project’s success. The effect that Instagram has on these NFT artists and their projects could be attributed to the fact that those artists have each already built a sizeable following on the social media platform.

Alex Fleseriu, CEO of Exchange.Art, a Solana-based fine art NFT marketplace – explains: “Given the platform’s popularity and reach, for an artist to begin selling their art as NFTs on Instagram is a completely natural fit – their communities are there, the barrier to entry for consumers to buy is relatively low for novel collectors and the artist’s ability to promote is high. In this particular case, the rapid sales of the artist’s NFTs is a combination of these factors but mainly, the community the artist has gathered, therefore making it more of a ‘community effect’ rather than an ‘Instagram effect’.”

Besides the NFT projects launched on Instagram, newly launched collections like Game of Thrones: The North Series and Solana-based Bonkz sold out quickly. Even though the former received criticism for the avatars’ claw-like hands and less-than-stellar art, the collection sold out in seven hours on the launch date of Jan 10. However, its value has dropped from the original mint price of $150 to the current floor price of $95.70 as of this writing.

As for Bonkz, the Shiba Inu-themed project generated over $1 million in trading volume after all 15,000 collectibles were sold out on Tuesday. The floor price of the Bonkz collection is currently 13.94 SOL ($225.76) according to Magic Eden—an almost tenfold increase from the mint price of $25. Creators of the Bonkz project said that the collectibles are purely art-based, with no plans for utility.

What’s driving the recent surge in interest in NFTs and in these newly launched collections regardless of their performance post-mint? “Memes are a powerful force to spread messages. Bonk Inu specifically is a meme-coin project that spouted over the past couple of days. The creators hit the right chord with what the community is looking for,” says Spencer Yang, co-founder, and CEO of Gomu, an NFT infrastructure company. 

Fleseriu has a similar sentiment. “As the market remains rather quiet, traders will speculate on movements, memes, and projects with known names attached more often in search of profits. More than anything else, these newly launched collections show that the speculative layer of trading isn’t going away any time soon,” he explains.

Jamie Wallace, Associate at BITKRAFT Ventures, agrees with Fleseriu, saying: “Despite NFT volumes being down significantly, there is still quite a bit of speculative capital in the ecosystem that is always looking for opportunities to make money, which was likely the case for Bonk Inu.”

Since the collapse of FTX/Alameda, the Solana community has faced some challenges as the value of SOL plummeted. Even top Solana projects DeGods and y00ts are abandoning Solana for Ethereum and Polygon. The recent challenges Solana has faced, however, didn’t affect the success of Bonkz. Does the blockchain that NFT projects are launched on really matter? The answer appears to lie within the community that exists within a blockchain’s ecosystem, rather than the blockchain itself.

“It ultimately depends. For the collections that are more endemic to the core NFT audience, it matters as there are diverse communities that exist within each blockchain ecosystem. For larger brands and celebrities with already huge distribution channels, it really doesn’t matter as likely most of the buyers will be first-time crypto users,” Wallace explains.

Jonathan Goodwin, Senior Manager, Community & Collaborations at Mythical Games adds: “After a few months of uncertainty, Solana seems to be stabilizing a bit and Bonk Inu hit at the right moment when the Solana community needed a meme-fueled hero narrative to get them out of the post-FTX collapse doldrums.”

Yang believes that the Solana ecosystem isn’t going anywhere, saying that the community has remained strong despite the negative overhang from its significant backer FTX / Alameda Research, and that “projects like Bonk Inu give us more data points that the Solana ecosystem is here to stay.”

Despite the market slump, industry leaders that NFTgators spoke to all agree that the positive reactions to these newly launched collections certainly indicate that there’s still demand for digital collectibles backed by NFT technology. While the market has yet to leave speculative trading behind, utility has been one of the key elements that creators are using to keep audiences engaged.

“Although the days of randomized pixels costing thousands may be numbered, it’s clear that the demand for next-generation art is fully intact. Recent success shows that by being purposeful with NFT creations, knowing your audience, and creating utility that keeps buyers engaged with digital collectibles long term, this technology will continue to flourish,” says Nick Rose Ntertsas, CEO and Founder of Ethernity and Ethernal Labs.

Phil Tran, CMO of MADWorld also touched on utility. “One of the most important callouts from last year’s learnings has been utility.  Despite critics of the Game of Thrones NFT design, fans gained access to interactive collecting experiences with their avatars in the metaverse. The more creators spend on crafting NFTs for the desires of their audience, the more positivity we’ll see in the space,” he says.

Even though the size of the NFT market has shrunk compared to last year’s peak, Goodwin says that “the strong responses are signs that the NFT market is not dead, merely resized to a sustainable level. It’s still perfectly possible to sell out of a collection with the right product-market and marketing-market fits.”


Stay up to date:

Previous Post

Wellness Brand Cymbiotika Launches Web3 Customer Loyalty Program on Polygon

Next Post

Algorand-Backed Quantum Temple Raises $2M to Preserve Cultural Heritage on Web3

Related Posts