Despite the prolonged downturn and unfavorable conditions in the non-fungible token (NFT) market, significant growth in this sector is projected for 2024. According to forecasts, the NFT market could almost double by 2027, reaching $3.2 billion compared to $1.6 billion in 2023.
In October 2022, the volume of NFT transactions reached its highest level since the end of August, increasing by 38% compared to the lowest week in September, as indicated by Nansen data.
- Regulation of NFT Projects
- Integration of NFT with Other Industries
- Trends of Non-Fungible Tokens in 2024
- Development of NFT Projects in the Current Year
Regulation of NFT Projects
The main appeal of NFTs lies in their ability to confirm ownership rights and provenance, which is especially important in areas such as art, the gaming industry, and customer engagement. Non-fungible tokens continue to be viewed as a means to create a more transparent and accountable digital ecosystem.
John Woo, president of AVA Labs, emphasizes in an interview the transformational potential of NFTs, offering artists the ability to assert their rights to digital works, open new revenue streams, and engage communities in the creative process.
Experts stress the need for more user-friendly infrastructure and clarity in the regulation of this industry. Clear legal frameworks are considered crucial for protecting consumer and investor interests, as well as ensuring the necessary stability for the development of the NFT market.
Rusty Matveev of Calaxy notes that regulatory changes regarding NFTs are unlikely to occur in 2024, highlighting the need for a careful approach to creating equal rules of the game for NFTs and individual cryptocurrencies.
During this period, companies will need to focus on the real value and benefits they bring. This transition leads to the emergence of more stable and valuable NFT projects, resistant to market fluctuations.
Integration of NFT with Other Industries
Integration of NFTs with real-world assets (RWA) opens up opportunities for transforming physical assets into easily realizable digital tokens. This impacts factors such as:
- simplifying the process of international investments;
- transforming asset interaction from exclusively digital space to a hybrid one.
This approach can significantly expand the application and attractiveness of NFTs, linking traditional financial mechanisms with new blockchain technologies.
Collaboration between well-known brands, artists, and digital art communities is considered a key step towards the dissemination and creative use of NFTs.
An example of such collaboration is the creative residency Web3 by Adidas, which demonstrates the integration of art and fashion for a wide range of creators and investors, creating a more inclusive NFT ecosystem.
Experts agree that, while the future of unique digital assets will not resemble the explosive growth of 2021, a resurgence of the market in 2024 is possible based on projects focused on practical utility and value, creative collaboration, and demand for real-world applications.
Trends of Non-Fungible Tokens in 2024
Activity around NFTs remains high on the Crypto X platform. Despite the decrease in minimum prices, collectors and investors continue to retain their digital art objects, especially those used as profile avatars (PFP), and developers are still actively involved in decentralized autonomous organizations (DAO) and Discord communities.
However, the key issue of digital collectible items has always been the lack of practical application. Previously, the technology was predominantly used for creating digital art, the value of which was threatened by the proliferation of lower-quality imitative projects.
There is an opinion that NFTs should find application beyond the realm of digital art associated with celebrities. In this context, these projects are increasingly exploring various innovative ways to increase their value.
Development of NFT Projects in the Current Year
Analysts believe that the future of NFTs will be service-oriented. Service-oriented non-fungible tokens can radically change traditional business practices in various sectors, providing community members with opportunities to exchange values and experiences.
There are various types of NFTs that are currently in development or already exist:
Category Description Games with NFT Integration The gaming industry offers some of the most promising opportunities for using NFTs. With the growing popularity of online games and streaming, NFTs are beginning to play an increasingly significant role in the world of video games. NFT and Exclusive Content Some companies use NFTs to offer exclusive content and unique interactions, ranging from virtual meetings to exclusive physical events, organized through a ticket system backed by tokens. NFT and Real Estate The real estate sector is beginning to use web3 technology to simplify buying and selling processes. Tokenization of real estate on the blockchain simplifies many processes associated with real estate, minimizing paperwork and bureaucracy. NFT Discounts and Promo Codes NFTs are also used in marketing to represent discounts and promo codes, ensuring security, transparency, and the ability to track such promotions.
Despite exploring new scenarios for using NFTs, the industry faces a number of challenges, including attracting a wide audience and an uncertain regulatory environment.
According to Triple-A, there are about 420 million cryptocurrency users worldwide, which is just over 4% of the global population.
Furthermore, unclear regulation can complicate the use of NFTs representing tokenized assets, and face issues related to scalability, security, fraud prevention, and legal uncertainties.
