Can TreasureNFT and Hamster Kombat save NFTs?

The Non-Fungible Token (NFT) market has experienced dramatic fluctuations since its explosive rise in 2021. It was Initially celebrated for transforming digital ownership and art, but ever since then, it has faced significant skepticism as market dynamics shifted and requirements for value became the standard.

As of 2023, the total value of NFTs traded has plummeted to $11.8 billion, a stark contrast to the $24.7 billion recorded in 2022. This decline has led many to declare NFTs "dead," primarily due to the perceived lack of utility beyond mere digital art and collectibles.

The NFT landscape is marked by notable events that have shaped public perception. The infamous collapse of the Axie Infinity blockchain in March 2022, where hackers stole over $600 million worth of crypto, significantly eroded trust in the NFT ecosystem.

Additionally, high-profile phishing attacks on collections like Bored Ape Yacht Club (BAYC) further fueled skepticism among investors and collectors alike. A recent CoinGecko survey revealed that only 19% of crypto participants expect NFTs to recover in the current cycle, while 54% remain pessimistic about their future.

The primary argument behind the notion that NFTs are "dead" centers around their lack of utility. Many early NFT projects focused on speculative investments rather than practical applications, leading to disillusionment among investors when the market cooled.

This article will delve deeper into the current state of NFTs, we will explore metrics, analyze arguments for and against their viability, and discuss whether there is a chance for recovery. But before that, Let's get back in time and see what the data is saying.

NFT Market Metrics: What Is The Data Saying?

The NFT market has experienced a significant decline in transaction volume over the past year. During the height of the NFT boom in 2021, the total NFT trading volume reached an astounding $25 billion.

This surge was fueled by high-profile sales, such as Beeple's digital artwork selling for $69 million at Christie's auction, which captured global attention and drove a massive amount of interest in digital collectibles. However, by 2022, the total trading volume had already begun to cool, dropping to approximately $24.7 billion. While this still indicated substantial activity, it marked a notable shift from the explosive growth of the previous year.

Fast forward to 2023, and the situation has worsened considerably. The NFT trading volume plummeted to around $11.8 billion, representing a staggering 62% reduction year-over-year.

OpenSea, once the leading marketplace for NFTs, reported a dramatic decline from $2.7 billion in May 2023 to about $9.34 million by late August 2022-a decline of roughly 99% within just a few months. This sharp decrease without a doubt indicates a significant loss of interest among buyers and sellers, even as the number of active wallets has remained relatively stable at around 2 million active addresses.

Source: Dune Analytics

Minting costs for NFTs have also fluctuated significantly due to Ethereum gas fees and overall market conditions. In 2021, during peak demand, minting an NFT on Ethereum could cost anywhere from $70 to $500, depending on network congestion. As of August 2023, these costs have varied widely based on blockchain selection.

For instance, minting an NFT on Ethereum now averages around $500, with gas fees fluctuating dramatically based on network activity. In contrast, alternative blockchains like Solana have emerged as attractive options for creators due to their lower minting costs, which can be as low as $0.05 to $0.50. Similarly, Polygon offers competitive rates that often fall under $10, depending on gas fees.

Notable instances have further illustrated the volatility of minting costs. In March 2021, during periods of peak gas prices on Ethereum, some creators reported minting costs exceeding $1,000 for larger collections due to high transaction fees. To address these challenges, innovations like "lazy minting" have been introduced, allowing creators to defer gas fees until an NFT is sold - this has significantly reduced upfront costs for many artists and developers.

While specific charts of the market decline are not included here, several key statistics indicate concerning trends within the NFT market. Nearly 30% of NFTs were classified as "dead" in 2023-meaning they had no sales activity or market value at all.

Additionally, the average lifespan of an NFT has now dwindled to just 1.14 years, which is significantly shorter than traditional crypto projects that often maintain relevance for much longer periods. The art sector has suffered even more substantial losses, with a notable 17-point drop in market share compared to previous years.

The dynamics of NFT marketplaces have also shifted significantly over this period. Blur emerged as a leading marketplace and even surpassed OpenSea in trading volumes at certain points.

On February 20, 2023, Blur recorded nearly $100 million in daily trading volumes; however, concerns have been raised about potential wash trading practices on this platform, with estimates suggesting that over 50% of its USD volume could be questionable or artificially inflated. Meanwhile, OpenSea's trading volume dropped dramatically as well.

These metrics collectively paint a complex picture of the current state of NFTs. While transaction volumes have plummeted and minting costs remain high, the number of active wallets suggests that community engagement persists despite the apparent decline in speculative interest. This shift may pave the way for more utility-driven applications of NFTs as the market matures and evolves.

We've come a long way with all these data, and it clearly showed that these metrics reveal an alarming reality, while NFTs once promised revolutionary potential, they now face existential challenges. This now begs the big question, Are NFTs really dead?

Are NFTs Actually Dead?

The question of whether NFTs are truly "dead" is complex and multifaceted. While the market has seen a significant decline in activity, there are compelling arguments on both sides of the debate.

Factors Behind the Perception of NFT Decline

Several factors contribute to the perception that NFTs are dead. One major issue is market overexposure. The rapid influx of low-quality projects led to market saturation, making it difficult for any single project to stand out.

In 2021, when NFT sales skyrocketed, many creators rushed to capitalize on the trend, resulting in an overwhelming number of collections that lacked originality or value. This oversaturation diluted the market and made it harder for meaningful projects to gain traction.

Another critical factor is security concerns. High-profile hacks and scams have instilled fear among collectors and investors. For instance, the collapse of major platforms like FTX and BlockFi not only eroded trust in cryptocurrency as a whole but also had a ripple effect on the NFT sector.

Reports of fraudulent activities, including wash trading and rug pulls from notable projects like Axie Infinity & Bored Ape Yacht Club as mentioned earlier, have further damaged the reputation of NFTs, leading many potential buyers to approach the market with skepticism.

Broader economic factors also play a role in this decline. Global economic instability, characterized by rising inflation and interest rates, has made speculative investments less attractive.

This is well known in a speculative market like the crypto market that as investors become more risk-averse, they are less likely to pour money into volatile assets like NFTs. This shift in sentiment has contributed to a marked decrease in sales and overall interest in the NFT space.

Perhaps most significantly, many NFTs were marketed primarily as collectibles without any real-world application or functionality-this is often referred to as the lack of utility. While some projects initially captured attention through hype and scarcity, they failed to provide ongoing value or use cases for their holders.

As a result, disillusionment set in among investors who had hoped for long-term growth based on utility rather than speculation.

Gary Vaynerchuk, a prominent entrepreneur, and NFT advocate, has stated that he believes 90% of NFTs will have little to no value in 3-5 years. This largely echoed similar sentiments from other industry leaders who compare the current landscape to early internet companies that ultimately failed due to a lack of sustainable business models.

Now let's look at the other side, we mentioned utility, if NFTs can find a real-world utility, will they survive?

Reasons for Potential Recovery: Is There Still Hope?

Despite these challenges, some experts argue that NFTs are not entirely dead and that there are several reasons for optimism. One key argument is the emergence of utility-based NFTs. Projects that focus on practical applications rather than mere speculation are gaining traction. For instance, utility NFTs can provide access to exclusive content or memberships, creating real value beyond digital art. This shift toward utility-driven models is essential for long-term sustainability in the NFT space.

Additionally, integration with gaming and metaverse platforms is driving demand for virtual real estate NFTs. Platforms like Decentraland and The Sandbox have created ecosystems where users can buy, sell, and develop virtual land using NFTs as proof of ownership.

Moreover, real-world applications for utility NFTs are being explored across various sectors such as healthcare, education, and supply chain management. For example, in healthcare, NFTs can be used for secure patient record management; in education, they can serve as verifiable credentials; and in supply chains, they can track the authenticity and provenance of goods. These innovative use cases highlight how NFTs can solve practical problems beyond their initial scope.

Experts predict that as the market matures, there will be a significant shift towards valuable NFTs based on their utility rather than sheer speculation. This evolution could lead to broader adoption across various industries as consumers begin to understand the inherent value that NFTs can offer beyond speculations.

Furthermore, technological advancements such as Layer 2 scaling solutions and interoperable blockchain networks are set to improve the efficiency and user experience within the NFT ecosystem.

Not only that, there is something noticeably surprising from search interest, particularly for a particular project called TreasureNFT, let's explore this in detail.

Growing Interest in TreasureNFT

Recent data from Google Search Console indicates a remarkable increase in interest surrounding TreasureNFT, a platform that allows users to trade and earn NFTs. From October 2023 to the present date, search interest in TreasureNFT has surged by over 100%, which indicates a significant uptick in user engagement and curiosity about the platform.

This growing interest is particularly pronounced in several key regions, with Pakistan leading the charge, followed by India, Saudi Arabia, the United Arab Emirates, and Bangladesh also contributing to the interest.

In contrast to what the market is saying, this surge in search activity aligns with unique trends in the NFT space, where specific projects are gaining traction despite a generally challenging market environment. The rise of TreasureNFT can be attributed to its unique features and innovative approaches that resonate with both collectors and investors.

For instance, the platform has done well in creating an inclusive NFT ecosystem that has attracted attention, as it encourages diverse digital art transactions and fosters deeper interactions among creators and users.

Moreover, TreasureNFT's recent achievement of securing the second position in OKX market rankings also shows its growing recognition within the global NFT market. This accomplishment not only signifies market validation but also reflects the platform's effective strategies for attracting liquidity and users.

Among its other uniqueness is the use of advanced trading algorithms, such as a pooled algorithm model designed for efficiently matching NFT trades, enhancing liquidity, and accelerating transactions, making it an appealing choice for traders.

Overall, the significant increase in search interest for TreasureNFT hints towards a renewed growing interest in NFTs and the project's potential as a rising star in the NFT market.

A Chance for Recovery?

The current state of the NFT market has left many existing holders grappling with significant losses. For these individuals, deciding whether to sell or hold their NFTs is a complex and often emotional decision. Selling an NFT that has already lost value locks in those losses but may also prevent further declines if market conditions worsen. Conversely, holding onto an NFT could potentially lead to recovery if the market rebounds or if the asset's value increases due to new developments or utility.

When considering whether to sell an NFT that has already depreciated, several factors come into play.

If an NFT possesses intrinsic value or utility-such as granting access to exclusive content, special events, or membership in a community-holding may be a prudent choice. These utility-driven NFTs can create ongoing value for their owners, making them more than mere collectibles.

On the other hand, if an NFT lacks future prospects or utility and is primarily a speculative asset, selling could minimize further losses. The decision ultimately hinges on individual circumstances, including the holder's financial situation, investment strategy, and belief in the asset's future potential.

Transformation of the NFT Narrative

Utility-based NFTs derive their value not solely from their inherent scarcity or artistic appeal but from the practical functionalities and real-world applications they offer.

One prominent example of this transformation is access control. Utility NFTs can serve as digital keys that grant holders exclusive access to online platforms or physical events. For instance, an artist might issue NFTs that allow holders to attend private concerts or art shows, creating a direct connection between the creator and their audience.

Another significant application is in memberships and subscriptions. Utility NFTs can represent membership credentials that allow access to premium services or gated communities. For example, a fitness brand might offer NFTs that provide holders with exclusive workout programs, merchandise discounts, or early access to new products.

In the realm of gaming, gaming integration is becoming increasingly popular. In-game assets represented as utility NFTs can unlock special abilities or customization options within gaming ecosystems. Games like Axie Infinity have successfully implemented this model, allowing players to own and trade unique in-game items as NFTs.

Furthermore, utility NFTs are being explored for supply chain tracking. By authenticating physical assets throughout their lifecycle, these NFTs can combat counterfeiting and enhance trust in supply chains. For example, luxury brands are beginning to use NFTs to verify the authenticity of their products, allowing consumers to trace the item's journey from production to purchase.

Tokenization with NFTs

The concept of tokenization plays a crucial role in the future of NFTs and their potential for recovery. Tokenization refers to the process of converting physical or digital assets into unique digital tokens on a blockchain. This process allows for verifiable ownership and facilitates easier transferability and trading of assets.

Tokenization offers numerous benefits, including increased liquidity, fractional ownership, and enhanced transparency. For instance, real estate is one area where tokenization could revolutionize how properties are bought and sold.

By tokenizing real estate assets into NFTs, owners can trade fractional shares of properties on secondary markets, overcoming traditional illiquidity challenges associated with large assets. This approach not only democratizes access to real estate investments but also allows for more efficient transactions.

Moreover, tokenization can enhance the liquidity of various assets by simplifying the buying and selling processes. For example, NBA Top Shot has successfully tokenized basketball highlights into collectible NFTs, generating over $700 million in sales since its launch in 2020. This model creates scarcity and exclusivity for digital highlights while allowing fans to trade them easily on blockchain networks.

In the music industry, artists like Kings of Leon have embraced tokenization by releasing albums as NFTs that include exclusive content and VIP experiences for fans. This innovative approach generated approximately $2 million in sales while providing artists with new revenue streams and direct connections with their audience.

Tokenization also enables clearer licensing and permissions for digital asset usage by providing a secure way to manage rights. Unlike traditional models where ownership rights may be ambiguous, tokenized assets can include specific terms regarding how they can be used commercially or personally.

Final Thoughts

As we look toward the future of NFTs, it becomes clear that their survival hinges on embracing utility-driven applications and innovative tokenization strategies. The market is gradually shifting towards recognizing the intrinsic value of NFTs based on real-world applications rather than mere speculation.

Technological advancements such as Layer 2 scaling solutions and interoperable blockchain networks are set to improve efficiency within the NFT ecosystem. These innovations aim to overcome current limitations while driving broader adoption across various industries.

For it to survive, we should expect a future trajectory of NFTs where they go beyond mere collectibles and speculative assets into tools with real-world applications across various sectors such as gaming, digital identity verification, supply chain management, tokenizations, and many more.