The year 2021 is considered the “Year of NFTs” as the hype around them increased after former Twitter CEO Jack Dorsey sold the first-ever tweet for $2.9 million early in the year. While the first NFT, Quantum, was minted by Kevin McCoy in May 2014, there hasn’t been much buzz around these tokens until recently. Could there be Emerging NFT Trends coming for 2022?
Today, established companies, wealthy investors, and high-profile celebrities have joined the NFT bandwagon by minting tokens for sale or spending millions of dollars to purchase them. These entities are using this move to expand their brands while also testing the feasibility of the market.
The NFT marketplace has evolved over time, leading to the emergence of new trends and an increased rate of activities. However, before we delve into the hot NFT trends and future promising projects, let’s take a quick overview of what NFTs are.
What are Non-Fungible Tokens?
NFTs are unique intangible digital assets that users can purchase or sell like every other piece of property. Economists describe fungible assets as units that can be interchanged or swapped, and some good examples are fiat money or cryptocurrencies. For instance, you can swap a $100 note for ten $10 notes or break 1 SOL into fractions.
For NFTs, it is almost impossible to do this as they are considered illiquid. Some good examples are artifacts or even a building. One can purchase a print of the artifact or take pictures of it, but there can only be one original copy.
These tokens can also be issued as proof of ownership for physical and virtual assets. They come in different forms, such as digital arts, music, video games, memes, big moments, clothing and apparel, domain names, and so forth.
The development of NFTs has disrupted many industries, changing how assets are traded. So far, industries that have adopted NFTs include entertainment, real estate, sports, healthcare, logistics, postage, and tech.
Initially, developers created NFTs only on the Ethereum blockchain because it was the only network that featured smart contracts and dApps development. However, they can now leverage newer blockchains such as Solana, Cardano, Polygon, Immutable X, and Tezos, giving them more options with which to work.
Emerging Trends in the NFT Market
Over time, the NFT market has revolutionized the trading and transfer of assets while helping creators and investors make a fortune. This is a result of the numerous trends and innovations that have existed in the market. There are currently some emerging trends that will likely disrupt the marketplace, and we will discuss them below.
Creators’ Migration to the Solana Blockchain
As mentioned earlier, most NFT creators develop their tokens on the Ethereum blockchain; however, the Ether network faces numerous challenges, including network congestion, high gas fees, slow transaction speed, and limited scalability. Ethereum developers are making moves to fix these problems using Serenity, the second version of the blockchain, but the implementation process is time-consuming.
With the growth in the NFT space, creators are migrating to the Solana blockchain because its technology solves all the problems that Ethereum faces. Other blockchains such as Binance Smart Chain, Polkadot, and Cardano are competing with Solana by offering scaling solutions; however, Solana is ahead in the race for many reasons.
One of them is the Proof-of-History consensus mechanism that Solana uses. This beats the Proof-of-Stake network that the other networks employ, allowing Solana to have the capacity of processing up to 65,000 transactions per second at an average fee of $0.0015 per transaction.
Another thing that attracts creators to Solana is the relatively low competitiveness of its NFT marketplace. Ethereum-based marketplaces have a high competition level, making it difficult for newbie creators or those with a limited budget to mint their tokens. Plus, the gas fees are expensive.
Solana’s low competitiveness allows creators to thrive more in the marketplace, and they do not have to pay a fortune to mint their tokens or process transactions. Given these advantages, there is little wonder why creators migrate to Solana.
Some NFTs can be pretty expensive. For instance, CryptoPunk NFTs sell for between $350,000 to $500,000; some even cost more than that. The high cost of these tokens created entry barriers for users that want to purchase such NFTs.
However, a new trend, popularly known as fragmentation, allows users to make high-value NFT purchases. Fragmentation involves breaking an NFT into fractions in the form of ERC-20 tokens so that users can purchase those portions at a cheaper rate. For example, Pablo Picasso’s artwork, Fillette au beret, was recently split up, allowing 4000 investors to own a fraction of it.
You can equate this trend to buying a company’s shares. When one purchases shares, he owns a portion of that company. It is worth noting that fragmented NFTs are fungible because users can interchange them with identical items.
The Disruption of Centralized Music Streaming Platforms
Creators can take advantage of music streaming platforms such as iTunes, Spotify, and YouTube Music to reach a wider audience and increase revenue; however, these centralized platforms take a chunk of musicians’ money. Statistics show that musicians lose up to 75% of their revenue after paying fees on streaming platforms and music labels.
With music NFTs, musicians can upload content on marketplaces and have users bid for them. This eliminates the need for intermediaries, meaning that content creators can make more money without being at the mercy of centralized systems. As a result, music NFTs will likely disrupt the music industry in the coming years because it presents a solution to creators’ yearning for fair revenue sharing.
What are the Top Upcoming NFT Projects to Look Out For?
The growing demand for NFTs has created a huge market for creators. The market boasts of thousands of tokens accounting for a market capitalization value of about $51 billion. However, identifying the right tokens to invest in can be challenging. Some factors that can help investors narrow down which tokens to buy include rarity, media presence, virality, profit potential, and execution.
While some NFTs make the cut, others do not, and we will be outlining some upcoming projects to look out for:
The creators claim that this project is the first multimedia and story-driven NFT project. It aims to revolutionize the NFT space by introducing new ways of telling stories. Furry Head’s multiverse consists of different NFT styles playing various roles in the story. Furthermore, the project is unique as it features real 3D rendered artworks that will give a metaverse experience.
Sneaky Vampire Syndicate
This project is the brainchild of a group of friends. These vampires have been creating a buzz in the NFT space, consisting of a collection of 8,888 Vampires that serve utility purposes for holders.
Shark Outlaw Squad
The squad comprises a collection of 7,777 crime-theme sharks. Holders have to join either of two opposing squads – the Outlaw Squad or The Justice Squad. Shark Outlaw Squad features a Central Bank that houses a secret vault with mystery artifacts. One can either be part of the Outlaw Team that raids it or the Justice Team that protects it.
Notable companies and investors are increasingly joining the NFT space. In the third quarter of 2021, NFT sales volume surged to $10.7 billion as more people are seeking ways to join mainstream blockchain. With the growing rate of NFT adoption, we would likely see more new trends and innovations that will disrupt the market while putting money in the pockets of creators and investors.