NFT Market Faces Challenges Amid New Developments

According to Cointelegraph, the NFT sector has seen significant developments this week, with notable updates from Axie Infinity and legal challenges for luxury brand LVMH. Axie Infinity, a prominent blockchain gaming project, has unveiled a trailer for its upcoming Web3 game, Atia’s Legacy. This new game is set within the Axie universe and is described as a massively multiplayer online (MMO) video game. Sky Mavis, the developer behind Axie Infinity, emphasized the game's focus on providing true asset ownership to players. This announcement coincides with the U.S. Securities and Exchange Commission (SEC) dropping investigations into major NFT projects, and a company owned by U.S. President Donald Trump registering trademarks for an NFT marketplace. Sky Mavis co-founder Jeffrey Zirlin expressed optimism, suggesting these developments could further unlock the potential of tokens. In legal news, luxury fashion conglomerate LVMH is facing a lawsuit from Watch Skins, a smartwatch face design firm. Watch Skins has accused LVMH of patent infringement, alleging that the company unlawfully used its patented NFT display technology in a smartwatch produced by TAG Heuer, an LVMH-owned brand. The lawsuit claims that TAG Heuer encouraged users to infringe on the patents by providing instructions for using the NFT display features. Watch Skins is seeking a trial, compensation for lost royalties and profits, and a court order to prevent LVMH from further using the patented technology. Meanwhile, the NFT market has experienced a significant decline in trading volumes, dropping by 63% since December 2024. Despite some positive regulatory developments and growing interest in the United States, the momentum of NFT trading has slowed in the first quarter of 2025. In December, the total trading volumes for blockchain-based digital collectibles reached $1.36 billion but fell by 26% in January, according to DappRadar analyst Sara Gherghelas. The downward trend continued into February, with volumes decreasing by 50% month-on-month. Gherghelas attributed the decline in NFT values to their correlation with cryptocurrency prices, noting that while NFTs had shown signs of recovery in recent months, their momentum has waned since the beginning of the year.