In this issue, I will consider the future of NFT art.
Non-fungible token, or NFT, are currently actively traded on marketplaces such as OpenSea, and in the NFT art space, for example, “Bored Ape Yacht Club” currently has a minimum floor price of 115 ETH (about 42.6 million yen), which is quite expensive.
There seems to be a reason for such high prices.
Let me explain step by step.
By the way, you need Ethereum (ETH) to purchase NFT art.
If you don’t already own Ethereum, you should initially purchase Ethereum (ETH) on a crypto asset exchange. The recommend exchange is “BYBIT“.
The last chapter of this article will also explain why.
You can also create an account at the link below.
Secure with strong security（Open a Free Account）
You can then send the Ethereum (ETH) you purchased on the exchange to your MetaMask wallet and connect your wallet to OpenSea to purchase.
● How to purchase NFT art
- Open an account with BYBIT
- Prepare your MetaMask wallet
- Purchase Ethereum (ETH)
- Send Ethereum (ETH) to your MetaMask wallet
- Connect OpenSea and MetaMask wallet
For more information on how to create a MetaMask wallet, please refer to this article.
Nature of NFT art at this time
Currently,mostly use it as a PFP (Profile Picture), which is a way to use my favorite artwork as an icon for profile picture on social networking sites such as Twitter. Incidentally, I also use NFT art for my Twitter icon.
What it means to use as a PFP
If you actually have NFT art set as an icon, you will know, but it is a strange feeling to see the same NFT collection as yours set as a PFP, and a certain sense of kinship is born there. Also, the more well-designed the community of that collection is, the more stable that connection will be and the more active the communication will be.
As long as it has a strong character as a PFP, we can also see a kind of identity being expressed in it. It may be a mirror of the creator themselves, or perhaps a fashionable element. It is an unprecedented movement to dress up one’s social networking icons with NFT art of one’s choice. Especially when it comes to expensive NFT art, it seems to have already been widely recognized as a fashion brand.
In addition, setting NFT art as an icon on Twitter, etc., can prove that the user has at least enough knowledge of crypto assets (cryptoliteracy) to purchase NFT art on the marketplace. For example, from the perspective of a user who wants to gather some information on crypto assets, an account with NFT art as its icon should be a good indicator for following the account (although ultimately it depends largely on the content of the tweets).
Incidentally, Twitter has been active in providing services related to crypto assets: in addition to setting up NFT art, you can also set up a wallet address (currently only for Bitcoin and Ethereum) for your account. This is very innovative and allows for speedy transfers and without the need for a bank account as long as you have a wallet address.
In addition, the acquisition of Twitter, Inc. by Elon Musk was recently announced. It will be very interesting to see how this acquisition will change Twitter in the future as a futuristic social networking service.
NFT art as an Investment
NFT trading is becoming more active in marketplaces such as OpenSea.
The graph above shows the daily trading volume on OpenSea (as of January 2022), which shows an upward trend as the base line. The more users trading, the healthier the market will be, and the higher the overall floor price can be expected to rise. The fact that prices can be expected to rise is the reason why NFT art itself has an aspect of being an investment target.
Many of the NFT art collections that are becoming active in secondary distribution and increasing in price on marketplaces such as OpenSea are collections with a solid roadmap, vision, and institutional design for the community. For example, if the collection can be promoted at the design stage as a collection that allows holders to participate in events or distribute tokens or limited edition NFT art as a giveaway project for holders only, the NFT art is more likely to continue to be popular.
Taking the “Bored Ape Yacht Club” mentioned at the beginning of this article as an example, 10,000 tokens called “APE” were airdropped to holders of the collection in mid-March 2022 at a ratio of 10,000 to 1 NFT. Currently, its value is hovering around 2,000 yen per APE (May 2022), which means that the holder of one piece of NFT art could have earned about 20 million yen in APE coins.
Another factor in the price increase is that the collection has a large number of pieces (generative). By making it a generative collection, it creates community activation and liquidity in transactions. However, as explained earlier, the collection must have a roadmap, vision, and institutional design for the community, and the institutional design must be well communicated to the buyers.
While creators who are somewhat well-known can formulate prices by putting one-off pieces on the marketplace, founders will generally have to make sure that the institutional design portion of the project is in place. One way to identify collections that will increase in price and value in the future is to look closely at this roadmap, vision, and community part of the process.
Another factor is that Metamask will support Apple Pay. This is a great innovation, and while previously it was necessary to buy ETH (Ethereum) on an exchange and send it to MetaMask in order to purchase NFT art, the ability to make credit card payments tied to Apple Pay has made it possible to purchase NFT art with a much lower barrier to entry and has made it easier for new users to enter the market.
The more new users there are, the more liquidity there will be in the market and transactions will be more active, which is an important factor to boost the overall market.
The Future of NFT art
So far, we have explained the current position of NFT art and its positioning as an investment target. As we look ahead to the future, there are other trends that are emerging, which I will discuss in more depth in this section.
NFT art that can be an asset
Earlier, I mentioned that NFT art is an investment target. This investment target is more of a medium-term time horizon, meaning that if the number of market participants increases in the future, liquidity will be created in the market, and it will be possible to aim for gains on sales through repeated trading.
Furthermore, there is NFT art that could be an asset in the long run. At present, the so-called “Blue Chip” collection is a prime example, and there are several others such as “Bored Ape Yacht Club,” “Crypto Punks,” “Azuki,” “CLONE X,” and “Doodels” that are expected to increase in value with long-term ownership. The collection is expected to increase in value as it is held over time.
Why could the collection known as “Blue Chip” be an asset? Using the “Bored Ape Yacht Club” collection discussed earlier as an example, you can benefit from various giveaways simply by owning that collection: you can earn APE tokens, and in the past you have received NFT art from its sister collection, the “Mutant Ape Yacht Club”. Incidentally, the floor price on OpenSea for “Mutant Ape Yacht Club” is currently 25 ETH (as of May 2022), which is amazing.
Because of these developments, expectations for collections that have been established are leading to further price increases, and there are a variety of benefits to be gained by owning the collection.
Ability to borrow funds from the NFT art
Even more innovative is the future proliferation of a service called “Blue Chip,” which allows users to borrow money against their collections. Some services already exist, such as “BEND” and “Pine“.
The screenshot above shows the list on the top page of BEND, for example, if you pledge the entire “Bored Ape Yacht Club” as collateral, you can borrow 54 ETH at this point. In addition, you will be granted a BEND token with an annual interest rate of 49.51%, so the money is generating money for you.
However, it is important to recognize that this type of service is still in its infancy, so there is naturally a high risk of hacking. However, they will become more commonly used in the future, and as they become more secure, NFT art will be linked to finance and create asset value.
Summary of this issue
So, in this article, I have taken a deeper look at the future of NFT art. It is interesting not only because it can be enjoyed purely as art, but also because it allows one to participate in the community of the collection by owning it, and also because it has the potential to grow as a new field when it is linked to finance.
Whether you have known the term ‘NFT’ for some time or not, this is an opportunity to purchase it once. The new sensations you will get from your purchase will surely take you to an unknown world.
Specific criteria, such as what to look out for when purchasing NFT art, can be found in this article.
Open an account with an exchange
To get the ETH needed to purchase NFT art on OpenSea, I recommend “BYBIT” as the main exchange.
Secure with strong security（Open a Free Account）
There are multiple reasons for this, but it is largely due to the following three points.
- No transaction fees on all cash currencies ※ Starting from Sep 6 2022, 10 AM UTC
- No fees for sending to other exchanges
- Top class server strength and high security
As mentioned above, no transaction fees for buying, selling, sending and withdrawing money, the higher the volume of transactions, the more attractive the lower commissions become. In addition, the operability of the application is outstanding, so the point is that it can be easily operated even by beginners in particular.
It depends on what you value in terms of service, but if you want to keep fees and other costs as low as possible, “BYBIT” is an exchange that offers high performance services compared to others.
That’s all for this issue.
Thank you for reading this far.
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