The Utility of Rarity: NFT Projects
Long gone are the days when digital creations were simply pixels to be admired on a social platform – today’s world is placing major bets on the ownership of these unique virtual figments. The one-of-its-kind nature of non-fungible tokens (NFTs) have earned them the modern-day excitement and monetization ability—one that has paved the way for trading and investment in any digital asset (art, music, texts, etc.) a possibility.
This same hype has given rise to numerous NFT projects that are changing the game for owning something original and traceable. Whether it be an exclusive collectible meant for a certain group of people, a rare gem that exists in a limited amount, or a token with real-world utility – NFTs seem to be an explosive trend for the year ahead.
On our way to discover the genesis of NFTs, we stumbled upon several cool art projects. Colored Coins, also known as Metacoins, was one of the first NFT-like projects which involved issuance of tokens that represent real-world assets on the Bitcoin blockchain in 2012-13. In 2014, Counterparty—a peer-to-peer financial platform and distributed open-source Internet protocol built on the Bitcoin blockchain—enabled digital asset creation and exchange through a decentralized exchange. Several gaming platforms such as Spells of Genesis and Force of Will also launched in-game assets on the blockchain through the counterparty platform; thus opening the doors to 1st generation NFT creation, ownership, and exchange. The year 2016, however, was a true breakthrough year for NFTs as memes met the power of blockchain. The world of digital arts had its tipping-point moment when Rare Pepes, a meme featuring a frog character, made its way onto the Counterparty platform and became an internet sensation. Soon after, Rare Pepes started to be traded on Ethereum as well. The NFTs were ready to scale the new heights of adoption.
2017 was the year when one of the oldest NFT projects of pixelated alien portraits were hosted on the Ethereum blockchain. These 10,000 characters with different accessories and hairstyles by the name of CryptoPunks—that were claimed for free when the rarity project launched in 2017—were soon a witness of $200 million worth of transaction volume.
Over the years, the sudden increase in the prices of the rare Punks, followed by the emergence of another NFT platform called CryptoKitties, established a certain level of security amongst investors from all spheres to indulge in the world of digital goods. As one of the most popular dApp projects, CryptoKitties launched as an internet-based centralized game where players could breed, buy and sell charming digital kittens via Ethereum.
The utility NFT project soon announced several key initiatives that it was undertaking to enable users to not only take their digital assets off the platform, but also have independent developers apply for loans or grants so as to finance their work for the KittyVerse community.
Since then, a lot of players have entered the NFT project race – with the likes of NBA Top Shot, Decentraland, Bored Ape Yacht Club, The Exotic Gentlemen’s Society, and Women Rise as a few that come out on the top.
The Top Shot rarity experience is known for its interactive “moments” offering – a video clip card showcasing a player’s highlight in an NBA game. The months of February and March last year observed quite the influx of investors, collectors, and profit-focused flippers for the TopShot marketplace.
Decentraland, a 3D virtual world platform, is another Ethereum-based project that allows users to buy virtual plots of land within the gaming ecosystem as NFTs via the MANA cryptocurrency. Although the browser-based concept was launched in 2017, it was only until the surge in popularity of NFTs in 2021 that gave it the much needed rush of new users and an increase in the value of parcels of lands being sold.
The last year, however, was abuzz with more innovative projects making their debut in the decentralized finance (DeFi) space. Not all NFTs are meant for just keepsake though. The 10,000-large Bored Ape Yacht Club NFT collection, along with providing a sense of artistic freedom in stylizing different personalities through its ape avatars, also comes with perks for the NFT holders that includes a lifetime membership to a secret apes-only club. The Yuga Labs creation has quickly become a favorite, having turned quite the heads since its launch in April, 2021.
Certain projects also go beyond just the flipping scenario, with goals to promote and raise awareness regarding important issues. Women Rise, a project meant to throw light on women empowerment and women’s rights, is a collection of 10,000 unique NFTs that are randomly generated by code. The utility project aims to bring 10,000 women onboard the crypto and blockchain space by the end of 2022.
Another notable NFT project that has an ambitious roadmap incorporating a variety of benefits and exclusive events for holders only is The Exotic Gentlemen’s Society – a collection that showcases a diverse range of exotic animals in classy apparel. A proportion of the NFT sales is donated to wildlife charity WWF to help the animals represented in the collection as they undergo difficult situations around the globe.
The NFT craze has only just begun. With a mindset that prioritizes convenience with benefit, the year of 2022 seems to be an explosive one for decentralized digital assets to make their mark and transform the way currency is accessed and owned. As gamers, collectors, artists, investors, and even the population at large are treading on this novel path towards redefining the digital economy, many developers are seeking the opportunity to build and support infrastructures that will unlock the next generation of having power over our own data.