15 May 2022 22:00, UTC.
Reading time: ~2 m
In 2022, among the most prominent trends will not only be Metavsels, but also NFTs. Despite a number of criticisms of them, they are attracting the attention of investors and developers. Let us note the important NFT trends which will have a significant impact on this sector.
NFT 2.0 protocols will emerge.
NFT 2.0 projects will appear this year. They will apply programmability, which will allow NFT to include a large number of different tokens. At the moment, the NFTs being released are nothing more than identifiers that prove ownership of an object. These are NFT 1.0. In contrast, NFT 2.0, has more features.
In particular, one NFT will be able to own other NFTs, and those will be able to own another set of NFTs. Existing NFT 1.0 has only one owner, while NFT 2.0 can be owned by multiple users. This will attract more liquidity, improve security and trust in ownership.
NFT 2.0 will be able to link tokens to multiple resources. For example, if a user purchases an NFT token, it will be available in multiple formats.
NFT 2.0. will provide the ability to lease an underlying asset through a smart contract. As a result of the lease, the owner will receive a passive income.
NFT-related crime will rise
NFT-related crimes are likely to increase. These are not just thefts of tokens, but also schemes to inflate the price and then sell NFTs. There are already a large number of fraudsters working in the NFT market. They use phishing methods, software in order to steal users’ funds.
In particular, already last year there was a report by a group of cybersecurity experts at the University of California, which indicated the results of a study of NFT security problems. They managed to find out that this sector is already dominated by fraud, a lot of fake tokens, vulnerabilities on merchant marketplaces.
Various schemes are used to inflate the price on NFT, among them wash trading, shill bidding and bid shielding. Almost all leading marketplaces use such schemes. In the course of this year, the number of schemes that scammers will use to cheat and steal NFT will increase.
It’s quite possible that there will be marketplaces that will engage in providing data on tokens that are in some way associated with fraudulent schemes. Another trend will form in this regard.
Decline in demand for NFTs.
Although the NFT market is showing growth so far, many NFT projects will be in decline this year. This will mostly affect gaming NFTs and collections from influencers. There is some possibility that the NFT bubble will burst and the market will collapse.
This is possible because investors are investing in assets that still have no legal regulatory mechanisms. Even the fact that the user is the owner does not guarantee that they will be the sole holder. There is nothing stopping the creator of an NFT from selling it on other marketplaces, and saying that this particular instance is the authentic one of all. Even if this is a lie, there will be no legal consequences for him.
This problem has been highlighted many times, but because of the hype and the opportunity to make a quick profit, it is not yet in the focus of marketplaces.
It is the gaming NFTs that are under particular threat. The vast majority of them copy each other and carry no special value. Their capitalization is solely due to the hype. As an example we can point the game AXS, which was created 3 years ago. However, it became known to the public only after one of the players gave an interview in which he said that he could buy real estate due to his participation in the game. Only after that the NFT value of this game began to rise, as a huge number of users also decided to earn a house.
One cannot rule out the possibility of a decline in hype around gaming NFTs. As they are held by the desire to earn income from them, in the case of new sources of income, the cost of gaming NFT will decrease, the number of audience will fall, the price of NFT will fall again and so on until the project ceases to exist completely.
At the same time, another trend may be forming.
The rise of blockchain-based Meta and NFT
This year, we should expect to see the emergence of NFT- and blockchain-based Meta’s. In order for digital items to be in demand and have value for a long time, they must have the ability to exist independently of servers and games that may be disconnected from the global network. That is, they must have the function of “continuity of identity and objects. This is what NFT’s Metavsels will help shape. This has already been implemented in Mark Zuckerberg’s Metavieworld, and we should expect to see digital objects with such functions in other Metavalleys.
The capabilities of different blockchains and networks can be used for NFT synergy, including the famous TON, which has its own TON fund.
Thus, the NFT market in 2022 will be influenced by the above trends. Which of them will be dominant, it is difficult to say yet. Much will depend on how the situation will develop around the entire global virtual economy, as well as the classical one. We cannot exclude the emergence of “black swans”, which will completely change the entire dynamics of the NFT market and all of the above trends will be replaced by others.