Source: Blockchain Knight
It has to be said that since the Azuki incident, NFT has not made headlines in the industry anymore. What we see are various mockery about the market downturn and occasional gossip about “boring monkeys”. So, when the space of the NFT market is repeatedly compressed, will people still expect the next “boring monkey”?
Thinking back, it seems like the NFT craze was just yesterday, but it has actually been several months. The mention of digital collectibles in China has also dropped to freezing point, as if the turbulent wave suddenly disappeared. However, seeing the promotion of some digital collectibles platforms, it seems to be telling us that the industry is still here, and the story continues.
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When we turn our attention overseas, an interesting news has attracted attention. On August 28th, the U.S. Securities and Exchange Commission (SEC) charged the Los Angeles-based media and entertainment company ImLianGuaict Theory with conducting unregistered Crypto asset securities issuance in the form of so-called NFTs.
Through this issuance, ImLianGuaict Theory raised about $30 million from hundreds of investors. This is the SEC’s first enforcement action against an NFT project. The SEC stated that the NFTs offered and sold by the company are investment contracts and therefore securities.
The SEC, as if suddenly awakened from a dream, has begun to sweep through NFTs. In the past two years when the craze surged, it seemed like an outsider. Now, it seizes the opportunity to “enforce the law” while the industry is declining, showing a style of kicking someone when they are down.
But on the other hand, is the NFT market really at a time when everyone is shouting “down with the street mouse”?
The above chart shows the global popularity trend of NFTs in the past 12 months according to Google. It is clearly on a downward trajectory but with some ups and downs, rather than a straight downward plunge.
At the same time, we see another wave of companies entering the NFT field. In the past year, Coca-Cola, McDonald’s, and Starbucks have successively launched their own NFT products. Even Crocs, the popular holey shoes this year, has partnered with the well-known NFT brand Doodles to enter the Web3 world.
Therefore, on one hand, there is a decline in attention, and on the other hand, traditional enterprises are entering the NFT field one after another. After all, this may be the most convenient way for them to enter Web3.
From this perspective, NFTs have truly entered traditional brands in a commercial form, rather than the frenzy of speculation in the previous one or two years. As for the claim that “NFTs are cooling down”, it may be derived from the following chart:
The latest data from The Block shows that the trading volume of NFTs in the past week has come to the edge of $70 million, a decrease of 99% compared to the peak of $17 billion in January 2022. Therefore, even though mainstream brands are increasing their investment in NFTs, the overall trading volume of the NFT market has indeed dropped to freezing point.
However, I still hold an optimistic view because compared to CryptoKitties six years ago, NFTs now have many remarkable aspects that are worth noting. At least more people are able to see the utility of NFTs, rather than just speculation. As for avatar NFTs, they have indeed been hit hard, but the development of NFTs will not stop. Perhaps after the hype around avatars subsides, the true value will be realized.
We no longer need to use Gartner’s technology hype cycle to describe the development of NFTs. Looking towards the future, NFTs will at least be integrated into fully decentralized games, be more effectively combined with RWAs (or DeFi), and bring more fun to Web3 social interactions. From these three major directions, the current development of NFTs is more like a “retraction” rather than a complete failure. Of course, when it comes to certain NFT brands, they may truly be “unable to rise again”.