Introduction to NFTs
Current Drawbacks Within the NFT Market
The NFT sector is exploding, but the industry’s ethic of decentralization and end-user prioritization is being hindered by the current infrastructure. User interactions, buying, and selling have always been restricted in this marketplace, with largely stripped-down platforms and exchanges supporting it thus far. Here are some of the most pressing issues that need to be addressed inside the NFT market’s current infrastructure.
The High Technological Barrier to Entry
Although more people are becoming interested in NFTs, the entry barrier to participating remains relatively high. Most of the NFT platforms require a lot of technical know-how to use. The average artist will have to spend hours learning complex blockchain and crypto functionalities before they can mint a single NFT on the majority of the platforms available today. NFTrade mitigates this with drag-and-drop creation possibilities, but many artists still do not know where to begin.
Not your keys, not your coins, and certainly not your NFTs in this scenario. There are now just a few major decentralized NFT platforms, with the others remaining entirely centralized and controlled by their development teams and major shareholders.
When it comes to a decentralized platform, users will be able to vote on the platform’s future direction and features. This ensures that it remains a community-governed platform, which will undoubtedly make user-focused functionalities and accessibility one of the major objectives.
The community, not third-party intermediaries, is intended to be prioritized by blockchain technology – this is a significant issue that the market needs to address collectively.
The lack of interoperability among blockchain networks and infrastructures is a major issue that is preventing the market from realizing its full potential. This issue has gotten increasingly frequent in the last few months as more users migrate from Ethereum at alarming rates.
Polygon, BNB Chain, Avalanche, and a number of other notable networks, in addition to Ethereum, have NFT features.
Liquidity pools are not as deep as they could be, and NFT accessibility across several chains is essentially non-existent, thanks to the current market infrastructure, which is quite restrictive.
Lack of Swapability
Users need to be able to do more than just buy and sell with their NFTs, whether it’s game features, artwork, or general items. Many people would prefer to directly trade NFTs rather than sell and exit the market, which can only be done with the help of a trading platform. Millions of gamers will also require an easy-to-use platform that allows them to trade avatars, items, territories, and other collectibles without paying real money. Thankfully, this is a feature that is currently live on NFTrade, but we are yet to see it on other top-tier marketplaces.
“Hot Potato” Mentality
Buying and quickly reselling an asset to make a quick profit is referred to as “flipping” an asset. For generations, the traditional art industry has had to contend with flippers. In fact, in the traditional art world, a swift flip is the best way to get yourself ostracized. For the NFT scene to thrive, the majority of collectors must desire to hold onto their NFTs for an extended period of time, thus removing them from the market. If the NFT art world continues to be overrun with flippers, the market will eventually die as they annoy true collectors and create a false illusion of demand.
High Gas Fees (And Platform Transaction Fees)
Steep Ethereum transaction fees constituted a significant barrier for many DeFi and NFT users. With Ethereum transaction fees often exceeding $100 per transaction during the peak of the bull market, many people found that using the network was no longer a viable choice, prompting them to explore alternatives.
With the emergence of Polygon, many recognized the layer two solution as the most cost-effective way to operate without sacrificing decentralization, resulting in the network’s mainstream expansion. Polygon has become a realistic alternative for many recognized and up-and-coming developments searching for ways to improve their offerings. Like many other up-and-coming layer one networks, it has all of the perks and none of the drawbacks.
Lack of Community Meeting Points
What many NFT platforms concentrate on is the buying and selling of NFTs; however, the market should be much more than a simple exchange for monetizing NFTs. NFTs are often artistic and creative expressions, and they should have a space where like-minded people can connect, share, discuss, and display their assets. A social platform based on NFTs can foster a nurturing environment that spreads and expands spontaneously.
NFT marketplaces, without a doubt, allow and enable everyone to join in the NFT market and a wide range of NFTs, such as in-game assets or artworks such as photos, music, and collectibles. Hacking tactics, on the other hand, are becoming more delicate as technology progresses. NFTs, like everything else on the Internet, are vulnerable to hacking and theft if not stored properly. Digital assets can be hacked, much like email, other online accounts, or a bank. This doesn’t speak to the security of blockchains in general but of custodians promising to safeguard assets.