NFT Trends to Look Out for in 2023
After a rough year in 2022, filled with many ups and downs, the NFT market still has a long way to go, but is moving towards a brighter future. Many of the bad actors that focused on profits over viability, community, utility, and gaming capabilities were washed out by a difficult market, leaving room for projects with real substance to rise to the top. As we move forward, here are some key trends to watch out for in the world of NFTs in 2023:
Fun Over Profits: NFT Gaming Takes the Stage
The gaming industry has always been at the forefront of technological innovation, and NFT-enabled games are no exception. In 2023, we should see a continued rise in NFT gaming projects that prioritize player enjoyment and fun over profits. This could take the form of collectible card games with unique, one-of-a-kind cards; virtual worlds where players can own and trade virtual real estate; or even entirely new types of games that utilize the unique capabilities of NFTs. We will probably not see as many gaming collections with high upfront costs, as with the NFT market collapsing, so did a lot of the speculation. Keep an eye out for free-to-earn collections where the value is accrued by the end users.
There will be many examples of this in 2023, with projects like Limit Break following this model to attract interest. However, if you are a game creator, don’t fret about the upfront loss, as if your game is successful, your team can make substantially more money long-term off of secondary royalties on sales from your NFT collections.
Phygital NFTs: The Best of Both Worlds
“Phygital” NFTs, which combine physical goods with digital twins, offer a novel best of both worlds solution. On the one hand, they allow users to own and trade unique digital assets, just like any other NFT. On the other hand, they also come with the added bonus of a physical counterpart – be it a commodity, a piece of art, or something else entirely.
One project to keep an eye on in this space is Diamond Dawn, which gamifies the process of owning an NFT by giving users the option to choose between the digital asset or a physical diamond after six months of ownership. This adds an element of gamification, surprise, and excitement to the process of owning a phygital NFT, and could potentially open up the market to a whole new group of collectors.
Diamond Dawn is reminiscent of ‘The Currency’ NFT collection by Damien Hirst. At a predetermined point, NFT owners had to decide if they wanted to burn their NFT to redeem a physical work of art, or burn the physical work of art (literally) and keep the NFT. With a 0.4-0.8 carat diamond on the line, the subjectiveness of value seen in projects like ‘The Currency’ will not play as large of a role, allowing end users to focus on the objective value of both the physical and digital assets before making their final decision.
Another interesting phygital project to follow is Vinsent.wine, an NFT project where the NFTs are tied to physical bottles of rare or high-demand wines. The NFT designates a digital representation of ownership, with the owner being able to easily redeem the NFT for the bottle of wine that it symbolizes. This also allows hobbyists and investors to seamlessly speculate on the future prices of wine, as if they think the price of the bottle will go up, they can purchase the NFT, wait for the price to increase, and then redeem it. This bypasses the physical process of storing and managing the bottle of wine for the end user, drastically reducing risk, as everything is handled by expert caretakers.
NFT Education Will Take Center Stage
As the NFT market continues to evolve, bringing in new and interested users, there will be an increased need for education around the asset class. This could take the form of beginner’s guides for those new to the world of NFTs, as well as more advanced courses for those looking to dive deeper into the technicalities of blockchain and smart contracts.
This is something we’ve personally seen highly requested for our community, and we are happy to oblige them (more info on that will be released soon – stay tuned!). Expect to see a wide range of educational resources becoming available in 2023, both from established organizations and new startups looking to make a name for themselves in the space. Whether you’re a complete newcomer or a seasoned pro, there will be something for everyone looking to learn more about NFTs.
Will Collectibles Make a Comeback?
Collectibles have been around for a long time, and in the world of NFTs, ones with established and loyal communities are poised for a resurgence. From digital trading cards to limited edition artworks, collectors will have more options than ever before to add to their digital collections.
One example of an NFT collectibles project to keep an eye on is NBA Top Shot, which allows fans to collect and trade officially licensed NBA highlights represented as NFTs. As one of the first collections to make a slash leading up to the recent NFT bull run, established and ‘legacy’ projects like NBA Top Shot are in a strong position compared to many projects on the market. From classic moments to modern-day highlights, there’s something for every basketball fan to collect on NBA Top Shot.
Utility NFTs: More Than Just Collectibility
While many NFTs are often thought of as collectibles, they can also serve as utility tokens with practical applications beyond just being hoarded and traded. In 2023, we’ll see a rise in NFTs being used as a representation of membership, offering exclusive access, and even as ticketing systems.
Utility NFTs take many different forms, with one prominent example using NFTs as a representation of a node or validator within a network. Nitro Network, a wireless internet infrastructure utilizing the Avalanche blockchain, uses NFTs to represent crypto-generating nodes within their ecosystem. Instead of having to set up and manage a wireless router yourself to earn fees from usage, like Helium, Nitro Network takes care of all the work for you, allowing you to earn fees from a represented router simply by owning a Nitro Network NFT. Another example are Galxe OATs (on-chain achievement token) NFTs, rewarding users with NFTs based on on-chain and off-chain requirements. Galxe OATs can have a wide variety of utilities depending on the project, such as giving access to token-gated content and communities, giving special access to live events or upcoming releases, or giving special access to upgrades within a dApp or game.
Web3 Domain Names
Web3 domain names are similar to email addresses or website domains, allowing crypto users to send and receive assets to an easy-to-read domain versus a string of randomly generated letters and numbers. NFT domain names drastically simplify the sending and receiving process, as the wallet user only needs to hold the domain name NFT in their wallet to access its benefits.
One example of an NFT serving as a utility token is the Unstoppable Domains domain name NFT service, which allows users to register and trade human-readable names on a variety of blockchains. Rather than having to remember long and complicated addresses, users can simply send transactions to an Unstoppable Domains name like “NFTrade.nft” instead.
We Have a Lot to Look Forward to in 2023
Overall, the future looks bright for NFTs in 2023, although it still may take some time for the market to fully recover to previous all-time highs. With a focus on fun, phygital experiences, education, collectibility, and usability, there’s no shortage of exciting NFT trends to keep an eye on this coming year.
NFTrade is a decentralized multi-chain and blockchain-agnostic NFT platform. NFTrade is an indexer of all NFTs across all of their integrated chains, hosting the complete NFT lifecycle and allowing anyone to seamlessly create, buy, sell, swap, farm, and leverage NFTs across different blockchains. Using NFTrade, anyone can gain access to the entirety of their NFT, unlocking the total value of the NFT market.