Mention the word NFT and the first thing that comes to mind are “PFPs” (Profile Pics) and “trading”. It certainly comes as no surprise, considering the fact that a majority of NFT markets function on these premises.
Yet, to simply relegate NFTs to these two areas would be scratching the surface — NFTs represent so much more, with vast potential waiting to be unlocked. This was the topic of the panel discussion at the FIL-Summit ’22 as part of Asia Crypto Week. Hosted on Sep 26, 2022 at Marina Bay Sands, our NFT Marketplace Business Development Lead, Jenny Zheng, took the stage with four other panelists as they engaged in a fireside chat about NFTs as the bridge between Web2 and Web3.
The utility of NFTs is one of the biggest debates between NFT proponents and skeptics — the latter arguing that NFTs are mere digital assets used for speculation, with limited real-world functionality. Many, if not most NFTs, started out that way. But just as beauty is in the eye of the beholder, “NFT utility depends on how it’s being used and positioned from the creator’s perspective”.
“Many of us would look at NFTs from an art perspective, but there are so many other possibilities for them to evolve into."
"In the near future, NFTs and the underlying blockchain technology can be used as identification in passports or even for event ticketing,” said Anndy Lian, Zero to Hero Creator and Chief Digital Advisor.
Guangmian Kung, Integrations and Partnerships Lead at Kleros echoed his sentiments.
“We often look at NFTs as items to sell, but what about non-transferable NFTs like Soulbound Tokens — a new identity verification system that represents who you are and what you’ve achieved. This opens up a whole new system of reputation authentication that can build trust in society.”
NFTs in the Bear Market
NFT Summer catapulted NFTs into mainstream consciousness, with the likes of celebrities and influencers driving mass adoption. In 2021, NFT trading volume reached an all-time high of $23 billion. Unfortunately, that all changed in 2022, when crypto winter hit. FUD was abound, causing a sharp dip in floor prices and NFT sales. Yet, through it all, the adoption rate still remained healthy.
Zheng explained how the bear market is the best time to build products.
“Even though Bybit NFT Marketplace started later compared to other players, we’re still growing very fast with a community of more than 600,000 users,” said Zheng.
“ Our key to success was reducing technical barriers, making it simple for users to buy and sell NFT s. For those who are adventurous and bold, there’s still a lot of room for growth.”
Adding on to Zheng’s statement, Lian talked about another important value of NFTs — community building.
“The value of NFTs is in its community,” explained Lian. “That social aspect is something that’s so much more valuable than the price. Prices may be sensitive in a bear market, but it’s a good time to build a community.”
NFTs and Security
Security was also a major topic, as NFT thefts and hacks continue to make headlines. Naturally, this begs the question of the safety standards in the industry and what regulations can be implemented to prevent fraud.
“Changes and improvements need to be applied to the underlying infrastructure to prevent secondary market sales of unethically acquired NFTs,” said Kung.
“I hope that the market will start to take these into consideration and come to a universal solution.”
Adding to that, Zheng pointed out a possible solution that centralized exchanges can provide:
“There are many debates between centralized versus decentralized exchanges, but for certain, centralized NFT exchanges provide a higher degree of security”.
“For Bybit NFT Marketplace, we carefully curate and evaluate all our projects to prevent any intellectual property issues," explained Zheng. "We also audit contracts to ensure that they are safe and reliable for our users.”
The Road Ahead for NFTs
More and more brands are adopting NFTs as part of their marketing strategy. From Nike’s Cryptokicks NFT Sneakers to Oracle Red Bull Racing’s Full Charge: Factory Pass , these serve to build rapport with their community by giving them exclusive perks and/or access to events.
As promising as it sounds, there’s a caveat — the technical challenges mainstream marketers face when trying to enter the NFT space.
“It’s difficult for these project owners if they lack the know-how and the expertise,” explained Zheng. “As a centralized exchange, we provide the tools — merging, airdrops, and whitelisting — to reduce the barriers to entry, making it easier for brands to kick-start their Web3 journey.”
Lian concurred, adding that “centralized exchanges do have a role to play.”
“Currently, everyone has a wait and see attitude. Brands need to dive deeper into the Web3 environment as it’s currently very scattered,” he said. “I hope that institutions and brands can find a common ground where they can learn, understand and educate, so that everyone can grow together.”