What a crazy year it has been for NFTs. From only $250 million in sales in 2020 to over $25 billion in 2021. That’s over a 10,000% growth, in just one year. The quick-rise of NFT art and collectibles have been dupped as the modern-day tulip mania that happened between 1634 and 1637. But this time, individuals and enterprises are getting involved with “digital tulips”, per se.
Whether this is the beginning of another financial bubble, the technology behind this phenomenon certainly has its own merits. The first proper use of blockchain was introduced in 2008 as part of the proposal for bitcoin. Many years later, it has yet to see widespread adoption; until now.
In the first edition of Uncovering the Global NFT Market report, we have broken down the fundamental concept of NFTs to help you make better sense of this breakthrough technology in an increasingly digital-first world.
What we cover in this report
The Uncovering the Global NFT Market report aims to help decipher the truth from all the hype we see surrounding the NFT market. Unfortunately, many of the things you see today only scratches the surface and doesn’t cover the native capabilities of NFTs and their potential use-cases. That’s what we want our research to solve; helping you truly understand NFTs through a series of reports.
For our first attempt, this report aims to help you answer these key questions:
- What are NFTs?
- How do NFTs work?
- What is the current state of the NFT market?
- What are the key drivers and challenges?
- What can we expect in the near future?
We start off with the basics, covering aspects such as the definition of NFTs and how it differs from cryptocurrencies. We want you to get a firm understanding of the key concept behind NFTs before learning more about the market landscape.
We then provide insights on the adoption trends covering the types of NFTs, the top NFT marketplaces, and many other factors to give you a comprehensive overview of this fast-moving market. We also covered the current drivers and challenges that would be crucial for NFTs to reach wider adoption.
To finish it off, we analysed 4 key areas that are likely to have the biggest impact on the market from 2022 onwards.
Some key takeaways
- Whales dictating the market – the market is yet to reach its desired stage of ‘democratization’. Early studies suggest that over 85% of transactions are performed by the top 10% of traders. The next frontier would be to ensure safe onboarding for new users and lower transactions costs to drive better access to the market.
- Enterprise adoption of NFTs will take off – institutions have jumped on the bandwagon to implement and adopt NFTs in various formats. Current strategies typically fall under three core ideas: marketing & fan engagement, enhancing brand value and establishing a new form of digital presence.
- Security will be the deciding factor – the market remains unregulated leaving several loopholes for fraudulent activities such as wash trading and plagiarising work. Providing security for users to limit incidents on identity authentication, smart contract risks, and governance on marketplaces are crucial for adoption.
Help us help you!
In today’s frantic NFT scene, we are learners ourselves. Our report is the result of countless iterations and advice from our pool of practitioners and early readers. To help us serve you better in the future, we want to hear your feedback on where we can improve. We have included a simple survey form at the end of the report to help channel your feedback directly to our analysts. You could also give us your feedback through this link. We will take all your inputs into deep consideration during the creation of our next piece.
Test your knowledge
Last but not least, we prepared a fun-little, 10-question quiz to test if you read our report. See how much you know about NFTs by visiting this page.
