NFT artist Johnathan Schultz believes that the era of NFTs without utility is dwindling, and to survive, it must outgrow the “memeification” of things.
Nonfungible token (NFT) collections were already feeling the effects of the crypto winter before the FTX crash, with trading volumes falling by 98%. The once-exploding market appears to have received the death blow with the FTX fiasco.
Executives in the sector are hopeful about the space’s resurgence, nevertheless. Users have tried oblique methods to withdraw their monies due to the significant number of user funds that are still trapped in the FTX exchange during its liquidity issue.
The purchase of NFTs with a Bahamas base is one of the purported ways to withdraw balances. The strategy was attacked by many members of the community since it circumvents bankruptcy regulations, mocking the usefulness of NFTs in the process.
Oscar Franklin Tan, a manager at NFT platform Enjin, disagrees, saying that this characterization is not accurate. Tan said that although NFTs were employed, other materials may have used as well. “It had nothing to do with NFT technology and more to do with that loophole for Bahamas users,” he noted.
Despite the negative consequences of FTX and the weak market, the CEO remains optimistic that the NFT area will survive. Tan emphasized that the industry should focused on how NFTs show that digital ownership is accepted, on new business models for content providers, and on subsidizing content production. He detailed this:
“Admittedly, there was a lot of hype and excessive exuberance for some models, but this is true with all new technology. The NFT space is sure to stabilize and consolidate around the strongest communities, then we will see a second generation of smarter, more sustainable NFT models.”
Tan emphasized that in order for NFT projects to recover, they need to put more of an emphasis on community development and utility. It is essential to stay away from short-term speculation and improbable timetables. Instead, they ought to be valuable in the long run.
The sentiment was echoed by a number of NFT market participants. CEO of NFT game studio Vulcan Forged Jamie Thomson stated that NFTs with utility in established markets are destined to endure.
According to Thomson, based on conjecture and vanity, the same cannot be said for NFTs. The executive asserted that as users wait for a more favorable market, these NFTs will “suffer more due to more frugal hands.” Thomson continued:
“Less speculation, more mandatory utility. As with tokens, if the NFT is essential for a project’s functionality or user’s presence, then there is less concern for price furcations. In essence, a gaming item, access to certain features, access to added value.”
Meanwhile, NFT artist Johnathan Schultz believes that the era of NFTs without utility is dwindling. “That is why we are seeing more projects with a lot more use cases and utility,” he said. Schultz also said that for the space to survive, it must outgrow what he describes as the “memeification” of things.
This means building projects that matter and help the entire space. Nick Rose Ntertsas, the creator of the NFT platform Ethernity, provided advice on how it might be improved as FTX’s NFT marketplace was caught up in the collapse of the company.
Ntertsas said that FTX’s centralized exchange-based approach for its NFT platform was closed in an interview. He clarified:
“That model should have been democratized and transparent. NFTs should eventually go cross-chain and be interoperable, not siloed by one gatekeeper, something we’re working on and passionate about.”
Contrary to the other sentiments, Ntertsas believes that there’s no one thing that NFT projects should focus on, as different projects will have different objectives. However, the executive wants to see more projects that challenge the space to “rethink what is possible with NFTs.”
