Momentum in NFTs shifts to brands

Jamal Molla
Written By Jamal Molla
I write about cryptocurrency, with a special interest in NFT and metaverse in particular.

Most non-fungible token (NFT) platforms are now looking up to brands to help them scale their businesses and also offer extra value to their customers, amid the lukewarm attitude being portrayed by artists and content creators. While artists and content creators see the NFT space as a medium to earn passive income, brands, on the other hand, see the space as a veritable tool to improve their customer engagement and further retain loyal customers.

According to Prasad Bhat, a Bengaluru-based artist, “content creators and some artists that I know in person are really struggling to earn a living off the NFT space. I listed my artworks on OpenSea and WazirX, but recorded very low sales.” I believe this dull sales may not be unconnected to the crypto wind that resulted in price depreciation of popular tokens,” Bhat emphasized.

Non-fungible tokens are built on top of a blockchain platform. They act as the equivalent of a digital ownership deed. During the crypto boom last year, artists and content creators leveraged platforms like OpenSea to display their artworks and earned money running into millions of dollars. However, as the crypto market nosedived in recent times, they began to count their losses.

The crypto market downturn also affected the value and trading volumes of NFTs, which is why small-time investors are buying cryptocurrencies equities. According to Chainalysis, a crypto research firm, in June alone, NFT accounted for roughly $1 billion, a figure that’s way below the market performance in previous months.

“The NFT hype which drove the initial phase was funded mostly by surplus capital. People who traded stocks and cryptos showed initial interest in NFTs. After stocks started sliding and crypto portfolios started going down, liquidity went down. Suddenly, individual NFT artists are finding that people are not buying anymore,” said Dhruv Saxena, who is the Chief Strategy Officer at Fantico, an NFT and gaming firm.

Meanwhile, brands within the crypto space are using NFTs as a tool to retain loyal customers and also keep their customers engaged. Recently, some brands have even gone ahead to launch NFT collections that they can use to woo their customers. For instance, earlier in July, Flipkart launched its first NFT marketplace where “Nothing,” a UK-based consumer electronics company airdropped NFTs to drive early bookings for its Nothing Phone 1 smartphone. Nothing used the Flipkart platform to grant early access to customers to enable them to participate in future events and also enjoy cheaper products and gifts from the company. Similarly, Mafatlal Industries, a textile maker, recently announced plans to develop a metaverse gallery and NFT store on Comearth.

Experts believe that as the NFT space continues to enjoy massive support from users, more brands are likely to join the NFT bandwagon, which will spur growth and bring credibility to the market.

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