Non-Fungible Token (NFT)Hi traders – I hope you all are doing well despite bear 🐻
It’s been a while since my last post but as NFT topic is largely uncovered in TradingView I thought that I will put something together. I have been learning about this area in past months
and here are my findings. I divided my writing into three chapters:
1) Research
2) Gaming and NFTs
3) CryptoWalkers
This way it’s more structured and easier to read.
1. Research
For last 6 months I have been researching NFT space and some of my conclusions are following:
NFTs can have basically unlimited use cases from music to land ownership
NFTs are here to stay and will become an asset class with very high market capitalization
Many well-known companies have shown their interest for NFTs
Can expect a lot of innovation in this sector
There are opportunities for investors/traders
Coinbase CEO Brian Armstrong said to Bloomberg: „The market for non-fungible tokens could rival or even be larger than the company’s cryptocurrency business.“ (10.11.2021)
I don’t know if that’s the case but there are definitely big potential in NFTs. According to CoinMarketCap, total Crypto market capitalization is $1.27 Trillion and NFTs total
market capitalization is $11,4 Billion (30.05.2022). This makes NFT market capitalization 0.9% of total Crypto industry. These numbers show that we are still very early.
During my research I have:
Deep dived into discord servers (every NFT project has their own server). I have been active there – asking questions and made suggestions. Fun thing about that is you generally
don’t know if you are speaking with 15 year old youngster or 60 year old elder.
Minted NFTs
Bought and sold NFTs on secondary markets
Invested into failed projects
To me investing into NFT projects is very similar to investing into startups – you invest mainly into founders & team. Idea is also important – as well ability
to make changes when something is not working. Also keep in mind that many startups fail, I guess that this number will be even higher in NFTs. Before bear market
there was extreme hype around NFT sector and you could basically draw a cow in Microsoft paint and sell it for 3 ETH if you were a good marketer. This is not the case
anymore. Currently sometimes even good projects are struggling to sell out. Generally I believe that bear market is good for the NFT ecosystem. It will clear up some air
and weak projects will fail. As famous investor Warren Buffett said: „Only when the tide goes out do you find out who’s been swimming naked.“ Strong projects will make it
because they keep building and this gives better foundation to new market cycle. This will also educate investors because at some point when investor had a whitelist spot
for minting event, it meant basically guaranteed profit. Markets can’t run like this forever. I mean you can still make money trading NFTs but it’s much harder with these market
conditions and more work needs to be done.
Here is little overview about different NFT categories (although sometimes it is difficult to classify them):
For example sometimes NFT belongs into multiple categories, like PFP (Profile Picture) project with P2E (Play-to-Earn) mechanics. I believe in time these categories will be
more precise as whole NFT market evolves. One of the most interesting area is blockchain gaming. This topic is nicely explained in Gemini's article and I copied it here (full link below).
2. Gaming and NFTs
While the global gaming industry continues to grow across all markets, it remains structured in a way that primarily benefits game developers and perpetuates a one-directional flow
of value where players spend money to unlock access to in-game assets and gameplay configurations. In contrast, blockchain-built games and decentralized applications (dApps) enable
players to capture the utility and value of in-game purchases and asset acquisitions more effectively.
Blockchain technology in gaming is driven by non-fungible tokens (NFTs), digital assets that represent in-game content. These tokens are unique, rare, and indivisible, while the
blockchain networks that underpin NFTs facilitate player ownership, provable scarcity, interoperability, and immutability. Together, these advantages have the potential to drive
mainstream adoption and a far more equitable value model.
Although the adoption of NFTs in the gaming world comes with benefits, it also presents significant obstacles to overcome. Most notably, NFTs need to be made more appealing and intuitive
to mainstream consumers who might not be technically oriented. And because NFTs possess intrinsic value, there's a risk that some will be used predominantly as speculative assets.
This potentiality could motivate players to purchase in-game assets with the hope of selling them for future profit instead of using the assets within the gaming ecosystem as intended.
Despite these challenges, the potential for profit within the gaming industry will motivate more non-blockchain-focused brands to experiment with NFTs, likely by forming partnerships with
third-party blockchain projects that have the technical expertise needed to bring their vision to life. Simultaneously, the broader success of gaming dApps will likely play a role in further
catalyzing NFT infrastructure improvements and drive the development of innovative solutions that unlock mainstream adoption.
Read full article here: www.gemini.com
3. CryptoWalkers
Cryptowalkers is unique collection of fully rigged 3D walking characters aimed to live in the Metaverse. All characters come with full bodies (and custom 3D backgrounds) to be used by
it’s owners in various Metaverse environments.
One of the main goals of this project is to develop P2E shooter game and it should be launching at February 2023 (dates can change, especially in Crypto but this is rough estimate).
Development is well underway and team has released some video clips from the game - this is one of the most advanced blockchain based P2E game I have seen so far. I think that
NFTs, P2E and Metaverse will become big things in Crypto. Despite being still early there are signs that this one will become one of the top players in the near future. I have
been part of their community since their minting event (December 2021) and feel very bullish on this project. I'm mostly impressed how professionally this one is managed.
Capable team is key to success and here we have one of those teams. They started with zero (0!) marketing budget but this little thing did not disturbed them. They managed to
build a strong community within short time-frame. When team is able to do things with limited resources then you could imagine what will start to happen when there is some money
backing their vision. In February Outlier Ventures joined as an investor and strategic partner. After that there are basically no closed doors for them. As I mentioned before,
it is wise to invest into strong teams. This is especially true in bear market.
Secondly, I believe that these CryptoWalkers have some X-factor that I can't describe. It's the same factor that separates great songs from good ones. To be honest, when I first
saw them then they seemed little weird to me 😀 Now I really like those Walkers... X-factor is working.
Here is chart of CryptoWalkers price movement (nftgo.io)
Current floor price is 0.18 ETH. Highest floor price was 0.5 ETH (02.02.2022). Current entry is more than 50% below that. Due to market conditions there is possibility to enter cheaply.
I think that this could be very good holding if trader wants some exposure in NFT sector.
CryptoWalkers website is: cryptowalkers.io
As always, DYOR!
Thank you and have a nice day. Cheers.
