9 Nov · 5 min read
The NFT market grows and evolves swiftly, and it’s hard to keep up at times. However, if you zoom out, the market follows trends that can be analyzed through which predictions about the future can be made. What started off with JPEGs and profile pictures evolved to become an $11 billion dollar industry in 2021, and this is just the beginning. It is expected that the market will reach a capitalization of $211 billion by the end of 2030. Institutions and brands have identified the potential of the space and have started actively participating, further adding to the adoption. The future brings a lot of practical use cases for this market which will solidify the foundations for these so-called JPEGs.
Most of the trend forecasts are based on the work currently being done in the web3 space. Most projects are in building phases, and some have secured rounds of investments and are eyeing 2023 and years to come for their launches. From this information, we can predict the following trends of the NFT market in 2023 and beyond.
For most brands and institutions, metaverses were the first area of contact in the NFT space, and this is where most of the work is being done. The metaverse industry, coupled with the gaming space, is projected to be a billion-dollar industry on its own. Sandbox alone holds a market cap of over $1 billion, and this is just the beginning. Many small-scale startups have pre-sold NFT in-game objects to fund their metaverse projects.
Big brands like Facebook, Apple, Microsoft, Lacoste, etc, are also running the race to make their way into metaverses which will soon have a tangible shape. Companies have also started designing metaverse-compatible hardware that would bring a more life-like experience to these metaverses. It is predicted that there might be social metaverses as well, which would help people socialize with one another in the comfort of their homes with holographic hardware or through AR/VR equipment.
Play-to-earns are booming at the moment, but we have yet to see a sustainable economic model being implemented in these games and metaverses. Any studio that succeeds in making a self-sustainable economic model integrated with a game will not only set precedence but will become one of the pioneers of the next generation of gaming. Currently, games like Axie Infinity, and Decentraland are helping people in third-world countries make amounts better than their country’s minimum wages. This brings us to the idea of metaverse-based remote jobs where people would be able to use their NFT avatars to perform tasks in the metaverse to be paid. Artists and architects are already being paid hefty amounts for building in metaverses like Sandbox; however, other roles are yet to be tested.
AI on its own is an ever-evolving field, and we already see its integration into the NFT space. AI has tested the NFT waters through computer-generated art. However, there are a lot of other use cases yet to be explored. Smart NFT avatars are supposedly the next big thing in the NFT and metaverse space. As “black mirror” as it sounds, these avatars would be in the shape of NPCs, pets, and other beings in the metaverses and in the art space in general.
AI-based art is controversial and has raised a lot of questions in the web3 space. However, there are projects that are already creating breathtaking pieces of art using AI, and since NFTs have grown to be a gold mine for investors, AI-generated art will keep on creating wealth, if not value, for a while.
Each project that gains a certain amount of success is followed by a lot of replicas. This makes not only loads of derivatives but also scammy projects that pose as other projects while robbing people of their money.
It is expected that there will be some sort of copyright or a verification method where people will be able to verify projects beforehand to avoid scams and useless replicas being sold to them.
Vitalik previously hinted at the creation of Soulbound tokens, a sort of NFT that will remain attached to a user’s wallet and would be non-transferable. This has a lot of use cases and increases the practicality of the overall NFT space.
ZK snarks can be integrated into this model to create a private copy of information of a person on the blockchain using these SoulBound tokens. These can create digital identities, medical records, etc., which can be attached to a user’s identity card via scannable codes as well.
Organizations often have sensitive data documented that isn’t meant to be shared by third parties. NFTs provide a certain amount of security, privacy, and a trail of transfers on the blockchain that can easily be traced. So, pharmaceutical, governments, and other industries can use NFTs to share their private data with trusted parties using NFTs.
We’re already seeing real-world assets being sold as NFTs. Recently, a house was sold in South Carolina as an NFT for $175,000, which sets the precedent for other assets to be pegged with NFTs, where these digital tokens would act as the certificate of ownership and authenticity of these assets. However, this might require regulation and legislation for the idea to scale. For now, we might see real art, merchandise, and things of little scale being sold based on this idea.
As iterated before, the NFT space is a swiftly evolving market. Each month brings a new wave of trends which renders the old ones obsolete. The pace of adoption signals that there might be a lot of futuristic technologies being integrated into the NFT sphere. All-in-all, the NFT space is currently in the hands of brilliant minds, which makes the journey a lot more exciting than the future. The industry is still in its state of infancy and there is a lot of room for adoption and innovation which we’ll see in the years to come.