The NFT ecosystem is going through a downturn, and well-known companies like Meta have paused their work with NFTs for the moment. What should the NFT ecosystem do to wriggle its way out of the current slump?
Alex Altgausen, co-founder and CEO, Banksters believes the way NFTs have been used and marketed in the recent past is quite questionable. Pointing to some NFT arts that had no actual utility while their pricing was unimaginable, he contends that the current slump could actually be a blessing in disguise, allowing real and exciting products to flourish.
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“A project is only as good as its product(s), great NFT projects with great utility will speak for themselves. We need to have a new motto–Utility first then art after, and not the other way around,” stresses Altgausen.
Do NFTs right
Tim Bhatnagar, co-founder of Paiverse, agrees, saying that now’s the time for projects with vision to step out of the shadows. Pointing to their own example of using NFTs as a means of proving authenticity, provenance and liquidity, Bhatnagar would like to see NFTs evolve from mere gimmicks to providing real world, tangible value.
Pointing to the news of Amazon launching an NFT marketplace sometime this year, Brandon Tucker, growth lead at Marinade Finance, says he isn’t perturbed by the current slump in the NFT arena. He says that while brands will continue to explore ways of using NFTs to build loyalty and community, he’s particularly excited about the huge range of possible utilities that they present when it comes to unlocking gated access to communities or deals.
“When retail or digital brands realize the power of airdrops, they will take NFTs more seriously,” suggests Tucker. Interestingly Tucker doesn’t expect mass adoption to come from established Web2 players, but instead from a newer and viral social media or e-commerce company.
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Bhatnagar echoes his views sharing his belief that niche, smaller and scalable startups set the pace in terms of innovation and adaptability.
Some of the experts we spoke to believe that the current regulatory pressure on crypto is also hurting NFT companies, and is one of the reason why some companies might opt to pause their NFT projects in the near term.
As a company that operates in the Metaverse and NFT space, this is something Jun Kawasaki, CEO, MetaX, is all too familiar with.
“We have already experienced the impact of regulatory uncertainty and ambiguity on our operations. We recognize the importance of complying with applicable laws and regulations, but it can be challenging when the regulatory landscape is still in flux and can vary widely from jurisdiction to jurisdiction,” explains Kawasaki.
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Despite the recent slump, Kawasaki believes that the overall trend towards using blockchain technology and digital assets, including NFTs, is still strong, and this is unlikely to change in the long run. He is of the opinion that in the long run, a clear and consistent regulatory framework will help build trust and confidence in these technologies and foster greater adoption and investment.
“As the regulatory landscape becomes clearer and more consistent, I am sure that more companies will feel comfortable investing in and using NFTs,” says Kawasaki.