Over the course of the last two years, the NFT market has made a massive turnaround, and without a doubt, 2021 was clearly a watershed moment in the emerging sector. Since then we’ve seen a lot of new applications for the technology springing up all around.
2021 notably witnessed the official integration of NFTs into decentralized finance, GameFi, Layer-2 smart contracts, fundraising, and so much more. However, the journey doesn’t end there as we are continuing to witness further trends in the current year.
In this article, we have compiled a list of disruptive NFT trends to keep an eye on in 2022. Without further ado, below are our picks for the top ten disruptive NFT trends of the year, listed in no particular order.
10. NFTs and Fashion
The fashion industry, which spans across clothing, footwear, lifestyle, accessories, makeup, and hairstyling, is growing fond of the limitless possibilities of NFTs, and this can be attributed to a lot of factors.
NFT 3D modelling capabilities in particular represent a relatively easy and cost-efficient alternative for brands to exhibit their products. For instance, rather than hiring real modelling professionals for 2D photography or video production, which can be quite expensive, brands can now achieve more with less, using human avatars and 3D visualization.
We have seen this being put to use by some big brands like Nike, Adidas, and even during the recently-held metaverse fashion week (MVFW). The first-of-its-kind MVFW was held between March 23rd and 27th, and marked the beginning of a new era in the fashion industry.
The sensational five day event saw participation from premium labels, digital-native designers, and household names including Paco Rabanne, Dolce & Gabbana, Etro, Tommy Hilfiger, Dundas, Cavalli, Nicholas Kirkwood, Elie Saab, and Imitation of Christ.
Among other things, the event provided all attendees with an immersive shopping experience, which was made possible by NFTs, which played a pivotal role in transforming 2D product photographs into 3D experiences. Ultimately, NFT technology has enabled brands and individuals to showcase their latest fashion styles to a larger audience.
9. Crypto Exchanges Begin Selling NFTs
With the NFT market exceeding $41 billion in 2021, and forecasted to reach $130 billion by 2030, it is clear that they cannot be ignored. As a result, an increasing number of exchanges are integrating dedicated NFT marketplaces into their platforms to cater to the growing number of NFT enthusiasts in the crypto ecosystem.
Prominent crypto exchanges such as Binance, FTX, and, more recently, Coinbase, have all announced the launch of NFT marketplaces on their platforms as part of a strategy to expand their business. While numerous exchanges are following suit, they will face stiff competition from existing platforms such as OpenSea and others, which are wholly dedicated to NFT sales.
8. NFT Projects Receiving VC Attention
Just like crypto exchanges, venture capitalist firms are also showing interest in the NFT gold rush and are investing heavily in projects within the ecosystem. Of course, NFTs are becoming mainstream, and that can only mean one thing: more people will be looking for ways to build upon the growing interest in the space.
For VC firms, the need to invest early enough cannot be overemphasized as it not only offers great financial benefits in the long run, but also gives them the chance to shape the budding economy while it is still in its early stages.
So far, there have been a lot of funding rounds led by VC firms in the NFT space. One such round was OpenSea’s $23 million funding led by Andreessen Horowitz, as well as notable rounds for ‘NBA Top Shot’ and ‘Rarible’.
Andreessen Horowitz, otherwise known as a16z, is one of the leading VC firms known for financing NFT projects. Other VC firms to lead NFT venture rounds include the likes of Coatue Management LLC, Benchmark, Moonrock Capital, Animoca Brands, Divergence Ventures, Coinbase Ventures and many more.
7. More NFTs Hosted Outside of the Ethereum Chain
It is a known fact that the majority of NFT projects out there are hosted on the Ethereum blockchain network. Even going by a recent report by Times of India, Ethereum is considered to be the natural choice for many investors, and its blockchain plays host to 95% of all NFT marketplaces.
However, this is beginning to change; more and more NFT projects are being hosted outside of the Ethereum chain. A prominent example of this is the Solana network, which has rapidly risen to popularity as one of the world’s most popular chains for NFT and decentralized finance (DeFi) projects.
One of the major reasons that new NFT projects are looking for homes outside of the Ethereum chain could be related to the network’s various lingering drawbacks, including network congestion, high gas fees, and computational issues, all of which should be fully resolved with the implementation of ETH 2.0.
On the other hand, there are several chain networks like Solana that resolve some of these challenges by implementing new and more efficient consensus mechanisms, like the Tower Consensus. Other chain networks that seem to have attracted the attention of NFT developers include Polygon, Cardano, Tezos, Binance Smart Chain and Algorand, among others.
6. NFT Passes
If you are familiar with the crypto space you have likely noticed a steady rise in the number of virtual events that require NFT passes. If you are not aware, a peep in the Eventbrite NFT event itinerary, seen here, will give you a general idea.
Along with the rise in the number of NFT-related virtual events is the issuance of NFT passes. Based on recent developments, event organizers are now abandoning the traditional method of issuing barcoded tickets in favor of issuing NFT passes. While one may wonder if there is any difference between the two, the answer is simple: yes!
Some of the notable differences between barcoded tickets and NFT passes includes the enabling of ownership transfer, secondary sales, access to personalized experiences, and increased asset values, among others.
To explain further, a barcoded ticket only has the ability to track single ownership, meaning that it is impossible to track the authenticity of tickets on secondary markets. Moreover, it becomes nigh impossible to offer a personalized experience once a barcoded ticket has been sold through a secondary market.
That said, there has been a wave of events in recent times that have opted to issue NFT passes. Popular events include the forthcoming exhibition bout between Floyd ‘Money’ Mayweather and ‘Dangerous’ Don Moore (You can learn more about the event here).
According to the official statement, released on Wednesday by the ‘Global Titans Fight Series’, the exhibition match between Mayweather and Moore will be held on the 14th of May, and will include an exclusive pay-per-view livestream for NFT ticket holders.
In another case, ‘Coachella’ also recently announced that it would be selling lifetime passes as NFTs. The organizers of the annual music and arts festival created a dedicated website through which people can explore and trade first of their kind Coachella collectable NFTs. Additionally, visitors to the website will be able to unlock lifetime Coachella passes, art prints, photo books, digital collectibles and more.
According to Rolling Stone, only 10 Coachella lifetime-pass NFTs will be issued at the onset, alongside a further 1000 NFTs, priced at $180 each, which buyers can use to redeem a physical Coachella photo book, among other perks.
As previously mentioned, two of the major benefits of NFT passes is their secondary sales value, as well as the transfer of ownership.
5. NFT Collateralization on the Rise
If you are a crypto trader or DeFi enthusiast, then this shouldn’t come as a surprise to you. NFTs, like most cryptocurrencies, are now being used as collateral on DeFi lending protocols. What this means is that you can use your valuable NFT collections as a form of guarantee when taking out loans on select crypto marketplaces and exchanges.
Prominent platforms on which NFTs can be used as collateral include Drops, OpenSea, Arcade, NFTFi, Nexo, ETNA, and many more. Before NFT collateralization, most DeFi lending protocols required users to stake crypto assets in a safe pool that was equal to, or greater than the amount they wanted to borrow—usually as a guarantee for the repayment of loans once they were due.
Prior to the introduction of NFT collateralization, most DeFi lending protocols required users to stake crypto assets in a secure pool that were equal to (or higher than) the amount they intended to borrow, usually as a promise to repay their loans when they were due.
Sadly, for a variety of reasons, this method has been widely criticized, resulting in the development of new alternatives, such as NFT collateralization and uncollateralized lending protocols. NFT collateralization, however, is considered to be a better approach to crypto collateralization for many individuals, implying that we may continue to see a rise in this trend moving forward.
4. NFTs and Music
Another major trend that is hardly going unnoticed is the application of NFTs in the marketing and promotion of music. Aside from the use of NFT passes for music concerts, as in the case of the Coachella Valley Music and Art Festival, the technology is also being applied in other areas.
In a recent development, celebrity musical artist John Legend reportedly raised $7.5 million for a community-based music NFT platform. ‘OurSong’, the brand new music NFT platform, aims to educate artists about NFTs as well as bridge the gap between fans and artists.
Unlike traditional streaming networks like Spotify, Apple Music and their like, OurSong offers creators an equitable system through which to generate revenue.
For instance, by installing the OurSong app on an Android or iOS device, creators (i.e musical artists) can easily mint their music and artwork into NFTs, and sell them for a price of their choice using the app’s native token, the OurSong Dollar (OSD). You can read more about the project here.
Similarly, Snoop Dogg announced back in February that he would be releasing his debut album, under the newly-acquired ‘Death Row Record Label’, on the blockchain. According to Snoop, the album will be released on the blockchain through a partnership deal with Gala Games, a blockchain gaming platform that is also the creator of the ‘Gala Music Store’.
Gala Music, on the other hand, claims to be “the first decentralized record company”, which aims to “show fans and supporters the power of listen-to-earn, artists the power of support in the Gala Games Ecosystem, and music corporations the power of reasonable and fair allocation of rewards.”
At the time of the announcement in February, Snoop informed his audience that the NFT albums, which he dubbed “Stash Box NFTs” would be limited to 25,000. Each unit went on sale for $5,000 per piece and contains 1 of 17 songs from the album.
Snoop claimed to have sold over 8,000 Stash Box NFTs, worth over $44 million, by the end of February, and could generate approximately $125 million from his ‘Bacc on Death Row’ (BODR) album sales alone if all of the album’s units were to sell.
3. Tokenization and Gaming
Another fast-paced trend driven by NFT technology has been gaming, featuring the play-to-earn (P2E) model, in-game assets and rewards, and of course, the metaverse. This growing trend has been made possible through platforms like ‘Axie Infinity’ and ‘Aavegotchi’, both of which offer new virtual economies leveraging the P2E gaming model.
The P2E gaming model in question rewards users with assets like NFTs and other in-game collectibles which can be easily swapped, sold, borrowed, or used as collateral across a variety of crypto markets and exchanges.
2. NFTs and the Metaverse
So far, we have seen how the metaverse has evolved, and more importantly, how it cannot function effectively without blockchain, cryptocurrency and NFTs. While metaverses are hosted on blockchain networks, cryptocurrencies fuel their economy.
However, in the absence of NFTs, Metaverses are just as good as an uninhabited planet, which also implies that NFTs serve as the basis for development in any metaverse. Just as humans are to the earth, NFTs are the building blocks for the development of the metaverse.
According to different sources, NFTs play a range of instrumental roles in the metaverse, one of which includes enabling users to claim ownership of virtual goods and property in the form of real estate, cars, boats, avatars, and event passes, among other collectibles.
That said, we have started seeing diverse applications for NFTs in various metaverses. Perhaps most notably, NFTs are being used to earn or generate revenue in the metaverse in unique ways, and this appears to be a rising trend across different platforms.
Indeed, the metaverse space has played host to endless new use cases for NFTs, enabling the creation of art galleries, virtual marketplaces (including secondary markets), and virtual offices where corporate workers can connect and collaborate.
1. NFT Personalities
More NFT use cases are emerging every day as people begin to look beyond the hype and desire to earn a quick buck from the rapidly-growing industry. One of the few that has garnered widespread attention in recent times has been personality NFTs, allowing people to mint their very personalities onto the blockchain.
Although the initiative is still very new, protocols like ‘Personality NFT’ are providing infrastructure that enables users to get custom NFTs of their personality. The initiative will undoubtedly play a huge role in the future of the metaverse as it has the capacity to change how people communicate with one another in the new digital world.
With such developments, musical artists, content creators, and ordinary people will now be able to perform to their audiences in the metaverse as NFT personalities, rather than as themselves.