What's Next for NFTs: Innovation, Utility, and Trends

Although the concept of NFT has been around since 2014, the official pandemic started in 2021 . With continuous innovation, NFT is no longer limited to digital art, and the field is rapidly transforming with the emergence of new trends, applications and markets .

According to a report released by the blockchain analysis company Chainalysis, approximately $44.2 billion in cryptocurrencies will be spent on NFTs in 2021, which is a significant increase compared to $106 million in 2020. Let’s review the innovations and new trends in the NFT space for widespread adoption in the near future.

NFT staking is a way to generate passive income. With NFT staking, digital art collectors don't have to buy and hold NFTs and wait for their value to increase . They can stake NFTs and earn staking rewards in the form of APR or APY. However, not all NFTs can be staked and generate income. Several factors such as the NFT's value, rarity, and the ability of the NFT to generate stable income will determine how much staking rewards an NFT can provide.

The lack of interoperability limits the potential of NFTs as well as cryptocurrencies and other blockchain applications . In order to solve these types of problems, multi-chain or cross-chain, NFT platforms have begun to emerge one after another to remove obstacles in NFT collection and transactions. NFTs are usually minted on a single blockchain network and face the same limitations as the network that minted them. Although cross-chain NFT platforms are still under development, they plan to address various shortcomings of the NFT space such as interoperability, sustainability, and energy consumption in the near future.

With the growing interest in developing the Metaverse, NFTs have multiple use cases in both the virtual and real worlds. NFT can be used as a passport to participate in activities, and this trend can be applied to participate in various things , such as participating in events in the metaverse, accessing exclusive channels on Discord, unshared podcasts, music platforms, etc. An NFT platform co-founded by Tom Brady, Autograph.io that aims to bring together famous brands, legendary athletes and their collectors. This marketplace allows people to buy their NFTs and gain access to exclusive events and private communities.

Convertibility is also one of the enabling trends of NFT. Instead of simply buying and holding NFTs, collectors can redeem them for different types of goods . NFT holders can exchange it for another digital or real-world asset. This trend is likely to increase in the coming years, allowing collectors to redeem virtual goods that can be used in the metaverse. RTFKT is one such platform that allows NFT holders to exchange for physical goods. It is the leading brand in creating virtual sneakers and collectibles for the Metaverse. The brand partnered with crypto artist Fewocious to allow select NFT holders to redeem a physical pair of sneakers.

NFTs are creating new funding opportunities for different types of businesses. The popularity of NFTs is a great opportunity for businesses to raise awareness and raise funds . Brands and businesses can reach their potential customer base by releasing their own version of NFT collectibles. Coca-Cola, for example, experimented with this mechanism by creating its first NFT collection. Its purpose is to raise funds for Special Olympics International, a sports organization that aims to eliminate discrimination against people with intellectual and physical disabilities.

At the same time, the number of NFT marketplaces is growing exponentially. OpenSea is the only leading NFT market in 2021 when the NFT trend emerges. However, the current launch of multiple NFT marketplaces is changing that. According to DaapRadar, Opensea continues to maintain its leading position in the NFT market, with a 30-day trading volume of approximately $2.64 billion. The LooksRare NFT market ranks second with a 30-day trading volume of over $2.3 billion. The platform was launched in January 2022 and has gained widespread adoption in a short period of time. With unique features like instant payouts, platform rewards, and airdrops, LooksRare is vying for the top spot on Opensea.

With the recent launch of the Solana NFT marketplace, the Solana network has also gained significant traction in the crypto community. As of April 2022, Solana's NFT sales crossed the $1.6 billion mark, making it the third active blockchain network by NFT sales after Ethereum and Ronin. With the integration of the Solana NFT market with the OpenSea platform, the total transaction volume is expected to rise, and Solana ranks second.

In the crypto community, the NFT trend is not going away anytime soon. Different types of NFT empowerment and the ability to generate passive income by staking NFT will only continue to increase the number of NFT holders. With the burgeoning innovation and development, the adoption of NFT will continue to increase significantly in the coming years.

Written by: Cryptohopper

Compilation: Tech Flow Intern