Even before the FTX collapse, non-fungible token (NFT) collections have already felt the impact of the bear market, with trading volumes down 98%. With the FTX debacle, the once-burgeoning space seems to have been hit with the final nail in its coffin. However, executives in the sector are optimistic about the recovery of the space.
With the huge amount of user funds stuck on FTX in the midst of its liquidity crisis, many have tried indirect ways to withdraw their money. One of the supposed methods of withdrawing balances is the purchase of Bahamas-based NFT. Many community members criticized the method, as it bypasses bankruptcy laws, and they even make fun of the usefulness of NFTs in the process, painting a negative image of NFTs.
Nevertheless, Oscar Franklin Tan, an executive from the Enjin platform, believes that this is not a fair summary. Speaking to Cointelegraph, Tan said that while NFTs were used, other elements could have been used as well. “It had nothing to do with the NFT technology and more with that legal loophole for Bahamian users,” he pointed.
The executive is also positive about the survival of the NFT space despite the effects of FTX and the bear market. Tan stressed that the space needs to refocus on how NFTs demonstrate acceptance of digital ownership, new models for content creators, and the funding of content creation. He explained that:
Admittedly, there was a lot of hype and exuberance for some models, but this is true with all new technology. The NFT space will surely stabilize and consolidate around the strongest communities, and then we will see a second generation. of smarter and more sustainable NFT models”.
Tan stressed that to recover, NFT projects need to focus more on utility and building their communities. Short-term speculation and unrealistic roadmaps must be avoided. Rather, they must have long-term sustainable value.
Several players in the NFT space also echoed the sentiment. Jamie Thompson, CEO of NFT game studio Vulcan Forged commented that NFTs with utility in proven markets are destined to survive. Thomson told Cointelegraph that the same cannot be said for NFTs based on speculation and boasting. However, the executive said that these types of NFTs “will suffer more due to more frugal hands” while users wait for a better market. Thomson further said:
“Less speculation, more mandatory utility. As with tokens, if the NFT is essential to a project’s functionality or user presence, then there is less concern about price fluctuations. In essence, a game item, access to certain features, access to added value”.
For his part, the NFT artist, Johnathan Schultz, believes that the era of useless NFTs is waning. “That’s why we’re seeing more projects with a lot more use cases and utility,” he said. Schultz also told Cointelegraph that for space to survive, it must overcome what he describes as the “memeification” of things. This means creating projects that matter and help the entire space.
With the FTX NFT marketplace caught in the middle of the company’s implosion, Nick Rose Ntertsas, the founder of the NFT platform; Ethernity, offered suggestions on how it can be done better. Speaking to Cointelegraph, Ntertsas said that FTX’s centralized exchange-based model for his NFT platform was closed. He explained:
“That model should have been democratized and transparent. NFTs should end up being cross-chain and interoperable, not guarded by a single gatekeeper, something we are working on and passionate about.”
Contrary to what others think, Ntertsas believes that there is no one thing that NFT projects should focus on, as different projects will have different goals. However, the executive wants to see more projects that challenge the space to “rethink what’s possible with NFTs.”
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