While Web3 and NFT (non-fungible token) markets have significantly cooled down this year compared to the previous one, new innovations continue to emerge, capable of further strengthening the sector when/if a more robust market recovery begins. Meanwhile, the market for blockchain-powered games remains robust and also sends positive growth signals.
In this interview, J.D. Salbego, a veteran of the blockchain industry with over eight years of experience, known for various NFT projects, and currently focusing primarily on the new generation aspiring to become Web3, decentralizing the internet, and leading his founded Web3 service platform Moonstax, discusses all of these trends.
This is what J.D. Salbego shared about the trends in the market he works in, just before his participation at the Web3 conference in Vilnius on November 9th.
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What recent developments in the NFT market could provide insights into the future of NFTs as a technology, industry, and market? What new use cases are emerging beyond just JPEGs?
Some recent developments in the NFT market that provide insights into the future include:
- The growth of utility NFTs, which provide holders with access to exclusive content, experiences, or benefits.
- The development of new NFT marketplaces and platforms.
- The increasing use of NFTs in gaming and the metaverse.
New use cases for NFTs are emerging all the time, beyond just JPEGs. Examples include:
- Fractional ownership of real-world assets.
- Digital identity and access control.
- Ticketing and event management.
- Loyalty and rewards programs.
These are just a few examples of the many recent developments in the NFT market. As the NFT market continues to grow and evolve, we can expect to see even more innovative and exciting new projects and use cases emerge.
[The speaker also provides various examples illustrating the expansion of the NFT sector. For example, the major NFT marketplace OpenSea acquired the DeFi (decentralized finance) lending platform Dharma Labs, and the sportswear giant Nike released its first collection of virtual NFT sports shoes that can be used in the metaverse.]
How has the NFT market been affected by the Ordinals protocol, which allows arbitrary data to be uploaded to the Bitcoin blockchain, including images, videos, text files, and even games?
Bitcoin Ordinals have had a mixed impact on the NFT market. On the one hand, they have brought new attention and users to the space. On the other hand, they have also led to concerns about spam and congestion on the Bitcoin blockchain.
It is too early to say what role Bitcoin Ordinals will play in the near to medium-term future. However, they have the potential to expand the NFT market to a new audience and to create new use cases for NFTs.
What are the key regulatory trends that NFT users, investors, and developers need to be aware of?
- Securities regulation. Securities regulators in a number of jurisdictions are concerned about the potential for NFT scams and fraud. For example, in the United States, the Securities and Exchange Commission (SEC) has brought a number of enforcement actions against companies that have sold unregistered securities in the form of NFTs.
- Taxation. Tax authorities in a number of jurisdictions are also issuing guidance on how to tax NFT transactions. For example, the US Internal Revenue Service (IRS) has stated that NFTs are generally taxed as property.
- Anti-money laundering (AML) and know your customer (KYC) regulation. Some NFT marketplaces and platforms are now requiring users to comply with AML/KYC regulations before they can trade NFTs.
- Intellectual property (IP) law. NFT creators and owners need to be aware of their IP rights and how to protect them.
In addition to these general trends, there are a number of specific regulations. For example, the European Union is currently developing a comprehensive regulatory framework for crypto assets, which is expected to include specific provisions for NFTs.
In the context of Web3, what roles might NFTs play in the near to medium-term future?
NFTs have the potential to play a significant role in Web3. For example, NFTs can be used to:
- Create and manage digital identities.
- Represent ownership of digital assets.
- Provide access to exclusive content and experiences.
- Govern decentralized organizations (DAOs).
Despite the broader crypto market’s decline, blockchain gaming remained strong, particularly in terms of unique active wallets, although USD volumes are down. In your opinion, what factors have contributed to this segment’s resilience, and how do you foresee its development in the coming year?
Blockchain gaming has remained resilient despite the broader crypto market decline due to a number of factors, including:
- The growing popularity of blockchain reward driven games, which allow players to earn cryptocurrency or other digital assets by playing games.
- The development of new blockchain gaming platforms and technologies.
- The increasing integration of NFTs and other Web3 elements into games.
I foresee the blockchain gaming market continuing to grow in the coming year, driven by the factors mentioned above. Additionally, I expect to see more innovative and engaging blockchain games being released, as well as more widespread adoption of blockchain gaming by traditional gamers.
What significant developments are occurring in the GameFi market that the general public should be aware of? How might these new gaming solutions transform the gaming industry?
The general public should be aware that all the major studios are making their mark in the Web3 gaming space.
Here’s a list of 5 major studios and publishers who are building Web3 games:
1. Take-Two Interactive:
Web2 Games: Grand Theft Auto, Red Dead Redemption, NBA 2K
Web3 Game: Zynga’s Sugartown
2. Nexon:
Web2 Games: MapleStory, Mabinogi, Dungeon Fighter Online
Web3 Game: Maplestory Universe
3. Bandai Namco
Web2 Games: Pac-Man, Tekken, Soulcalibur
Web3 Game: Ryuzo
4. Square Enix
Web2 Games: Final Fantasy, Dragon Quest, Kingdom Hearts
Web3 Game: Symbiogenesis
5. Atari
Web2 Games: Pong, Asteroids, Space Invaders
Web3 Game: Atari Metaverse
Such games can empower players by, for example, giving them control over in-game assets, characters, items, and virtual lands, as well as providing additional income. Furthermore, these solutions can reach a broader audience in emerging markets, as they are often more accessible and affordable than traditional gaming platforms. Additionally, this can facilitate the emergence of new gaming solutions and genres.
Thank you for the answers, and we’ll see you at the conference in Vilnius!
(Answers edited for clarity and brevity.)
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