Why is the NFT market important? A brief introduction to the value of NFT in the field of encryption art and games.

free bitcoin game

At present, the NFT market is still small, and the attention is not enough. However, as the value of NFT is gradually discovered, it is likely to show explosive growth in the next few years.

NFT market began to attract people’s attention in the field of encryption, mainly from encryption cats.

Dragon,Source:Cryptokitties, the most expensive encryption cat in history.

The cat pictured above is the most expensive cat in NFT’s history. It is called DRAGON (Dragon), was born on August 19, 2018, the transaction price is 600ETH, based on the market price at that time, about $170000, more than 1 million yuan, and broke the previous Founder CAT 300ETH price (then the market price was $110000).

FounderCAT,Source:Cryptokitties, the most expensive encrypted cat before the record was broken.

So, how to understand the value of NFT,? Why is it important?

First of all, what is NFT??
NFT is the abbreviation of Non-Fungible Tokens, which means non-interchangeable tokens, as opposed to interchangeable tokens. Non-interchangeable tokens are also called non-homogeneous tokens. What is an interchangeable token? For example, BTC, ETH, these tokens are homogeneous tokens, so they are interchangeable with each other, that is to say, one of your ETH and one of my ETH are essentially the same, with the same attribute and price. And non-interchangeable tokens, or non-homogeneous tokens, they are unique, just like works of art, each is different. They are not interchangeable with each other, so they are called non-interchangeable tokens or non-homogeneous tokens.

Generally speaking, NFT has unique, scarce and indivisible attributes. Unlike BTC, it can be divided into 0.01BTC, it exists as a whole. However, NFT itself can also be tokenized, of course, this is a different topic, we will not expand it here.

Secondly, which encryption areas does NFT exist in?
There are NFT applications in games, works of art, domain names, collectibles, virtual assets, real assets, identity and so on. Among them, games, works of art and domain names are the most rapid development. The following is a brief introduction to NFT in the field of games and works of art.

Encrypt NFT in the game.
The field of encryption games has a natural relationship with NFT. At present, one of the biggest problems in the game field is that props and other equipment can not be transferred, can not really be privately owned by users. On the other hand, NFT is private property based on blockchain, which is completely controlled by users and can be transferred and traded freely.

At present, in terms of encryption games, Axie Infinity, Decentraland, Gods Unchained, Cryptovoxel and many other games are continuing to expand the market.

NFT trading market is beginning to take shape.

  • currently, the NFT market has more than 20,000 Opensea users.

More than 20,000 Opensea users, Source:DUNEANALYTICS.

Opensea is the NFT market exchange, it has more than 20, 000 users, compared with the hot DeFi field projects, second only to Uniswap, kyber and Compound, higher than maker, 0x and so on. The number of users is not small.

  • the volume of transactions on Opensea is also significant.

On Opensea, there are 706 NFT projects, 285 projects with more than 1ETH trading volume, 59 projects with more than 100ETH trading volume, and 24 projects with more than 1000ETH trading volume. At the top of the list, encrypted cats and Decentraland have a trading volume of tens of thousands of ETH.

NFT total transaction volume ranking on Opensea, Source:OPENSEA.

In addition to the data on Opensea, we can also see from nonfungible that the total transaction volume of NFT is more than US $100 million, the number of transactions is more than 4.7 million, and the cumulative transaction volume of more than US $1 million is more than 16 projects.

The total transaction volume of NFT exceeds 100 million US dollars, Source:NONFUNGIBLE.

The value of NFT in encryption Game.

Why is the NFT in the game growing the fastest? NFT in the game has natural uniqueness and usability. For example, each Axie in Axie Infinity has different properties. Axie is a fantasy creature that players can use to fight, collect and develop. Different attributes determine the different roles of Axie in combat. The Axie has six body parts: eyes, ears, horns, mouth, back and tail. The corner, mouth, back and tail determine what kind of cards Axie can use in combat. It has a state of health, morale, skill and speed. Each Axie also has a different type. Each type is either strong or weak relative to the other types.

Axie has different attributes and body parts, Source:Axie Infinity.

In addition to fighting, Axie, as a fantasy creature, can also be nurtured and can have offspring. Raising offspring can also be used to fight or continue to have offspring (up to 7). In order to have offspring, Axie needs to consume some ETH or SLP tokens, and SLP tokens are interchangeable homogeneous tokens. In addition to buying it on the open market, it can also be obtained by participating in the game in the game environment. This has led to a new model of blockchain games: making money by playing games, because the earned SLP can be sold on the open market. This model also increases the demand for NFT (Axie). SLP caused it to rise rapidly through 4chan’s meme, a few days ago, and attracted people’s attention.

If Axie Infintiy can be favored by larger users, then the scarce Axie will be more valuable, and you shouldn’t be surprised if some Axie sell for more than $100000 each in the future. Of course, this will also drive demand for SLP.

Recently sold Axie,source:Axie Inifinity.

In addition to Axie Infinity, there are more encryption games on the road, waiting to be discovered.

NFT in the field of digital art.
In the Superrare digital art market alone, artists have earned more than $1 million and released more than 7000 NFT works in 178 countries around the world.

Artists on Superrare earn more than $1 million, source:Superrare.

Why is NFT in the field of digital art valuable?

Because of the use value and scarcity of NFT, in the game field, it is relatively easy to feel the value of its NFT. However, NFT in the digital art market is relatively difficult to understand. Even so, more than $1 million of digital art has been sold on the Superrare platform alone.

So, how to understand NFT? in the field of digital art. Why could it be so valuable in the future that it might even stand side by side with NFT in the gaming field?

From a macro point of view, the NFT market of digital art may catch up with or even surpass the traditional art market in the future. The most important decisive factor in this is, what is the key to determining the value of art? The real thing. In the art market, the real thing is the core of value. If it is not an authentic Van Gogh, even if the degree of imitation is as high as 99.999999%, the fake is of little value. Of course, there is a more central question here, about the valuation of the value of works of art itself, which is a broader theme, which will not be carried out for the time being.

We see a lot of pictures on Superrare, and some digital art pictures are priced as high as hundreds, thousands, or even tens of thousands of dollars. What is the value of these digital works of art? People buy physical works of art, such as paintings, which can be appreciated and displayed. And digital works of art are just image files, where is the value? The question is not whether it can be appreciated or displayed, because fakes have the same effect, and ordinary people may not be able to tell the difference between the fake and the real. But the real thing has value, and the fake has no value. People can imitate Van Gogh’s “Sunflower” and create works that are almost indistinguishable to the naked eye. Fake “Sunflower” can still be used for appreciation and display, but this “Sunflower” is of little value.

Artists in the traditional physical world show the authenticity by signing their names. In order to identify whether it is true or false, it requires the participation of experts and costs a lot of money. However, on digital art carriers such as NFT, there is no such problem.

Because NFT can’t be forged. In the physical world of art, it has the possibility of forgery, while in the field of NFT, it cannot be tampered with. In this way, any artist’s digital work, as long as it exists in the form of NFT, it is unique, even the creator himself can not tamper with, copy, it has the only scarcity.

Of course, in the end, NFT is only the carrier, and the core is the discovery of the artistic value behind it, which is the ultimate factor that determines the NFT of digital art. But don’t worry about this, because each era has its own carrier of art creation. In the long run, as the original digital generation becomes closer to digital art, and as artists create more digital works of art, a new generation of (NFT), will create “sunflowers” that belong to this generation, the future art collection is likely to shift its focus to NFT.

Selling digital art on Superrare, Source:SUPERRARE.

NFT’s investment.
The investment of NFT itself is more similar to the investment of collectibles. Therefore, in terms of NFT investment, we need to have an in-depth understanding of specific NFT market segments in order to make a good investment, especially for enthusiasts. First, to enter early, and second, to participate in games, digital art collections, domain names and other markets, deep into the market demand. The valuation of NFT involves a variety of factors, and Blue Fox Notes have also written a related article “how to value virtual assets”.

In addition to NFT itself, the project carrying NFT is also an important part of NFT investment, and the project carrying NFT has a better chance to capture the value of the whole ecological development than NFT itself. of course, this also depends on the design of the economic mechanism of the project token. Blue Fox Notes will continue to pay attention to this kind of project.