Top NFT trends in 2022

Maciej Zieliński

05 Apr 2022
Top NFT trends in 2022

NFTs - 2021 was their year. The world went crazy searching for new NFT projects to generate record secondary sales revenue. What will 2022 bring? This article summarizes everything you need to know about the upcoming NFT trends.

NFT boom 

Surprisingly, NFT tokens are older than many would expect. It was in 2014 when the first NFT token - rainbow Bitcoin was created. The project didn't get even a fraction of the attention gained by its fungible cousin. ERC-721, a non-fungible token's standard on Ethereum, initially suffered the same fate. While fungible ERC-20 quickly became a fundament of the DeFi industry, ERC-721 remained relatively unknown, without any significant use-cases on a horizon. 

Things began to change with an inconspicuous collectible game - CryptoKitties. Created by DapperLabs, the game was the first commercial use of ERC-721 tokens and NFT in general. Essentially,  it allows players to buy, collect, and sell virtual kitties. The game is based on a simple collectible game pattern, yet with a blockchain technology twist. All the collectibles are stored as non-fungible tokens; moreover, exchanges and transactions in-game are facilitated on a blockchain. The game quickly gained tremendous popularity in the crypto community, bringing DapperLabs revenue of 200 million in just a few months. 

How NFT ownership became a thing in 2021

The game was a breakthrough for NFTs that accelerated processes that later resulted in worldwide usage and mainstream popularity of this technology. Yet, the true boom in the non-fungible assets market began only in 2021. NBA’s opening their NFT marketplace, digital artist Beeple on Sotheby's auctions, or astronomic values of virtual land plots in Axie's Infinity - those events got an immersive coverage in conventional media and attracted the public attention to NFT for good. 

Suddenly, underrated non-fungible tokens became the most discussed element of the blockchain world. Masses of people who had never been interested in Blockchain started searching for new collections, buying tokens, and discussing the most efficient strategies. 

With such a boom in popularity, NFT ventures flourished. Dozens of new collections were created every day. Crypto punks, Bored apes yacht club, Axie Infinity- to name a few - with the highest sales volume. NFT digital art started being displayed in museums all over the world. At some point, NFT collectibles crossed with gaming resulting in exciting NFT gaming projects and redefining the play-to-earn concept. Moreover, Ethereum blockchain more and more often began to be replaced by more efficient solutions, such as Polygon or Solana. 

With such dynamic development in 2021, one question became inevitable: what will 2022 bring? What will be the hottest NFT trends in 2022? 

1. The growing share of Solana 

Solana is a third-generation blockchain that, unlike other blockchains, uses a hybrid consensus algorithm. To be more precise, it combines proof-of-history (PoH) with proof-of-stake (PoS). Due to that, it can process over 50,000 transactions per second. To compare, Ethereum can't handle more than 30 at the same time. 

Launched in 2020 by the Solana foundation, Solana Blockchain aims to solve scaling problems that struggle with most current blockchain protocols. Its main objective is to support DeFi ecosystem growth by fitting in the so-called blockchain trilemma: decentralization, security, and scalability.

Combining those three factors seems to be the holy grail of the blockchain world. Many projects succeed in supporting one or even two of the factors but fail when it comes to others. Solana engineers believe that they have implemented all three. 

Solana NFTs 

OK, so we have a fast, very promising blockchain with quickly increasing popularity. Why shouldn't we use it for NFT minting? Many recently emerged NFT ventures prove that it might be a fantastic idea. 

What new possibilities can the Solana ecosystem bring to the world of NFTs? Think about 3D NFT or whole NFT-based games with mechanics primarily performed on-chain. Because of high gas prices, it would never be possible on Ethereum. The low fees and high speed that Solana offers may open entirely new doors for NFT development. 

Ethereum pushed aside

Ethereum is still the leading Blockchain among NFT ventures. Yet, according to many analyses, including the one done by JPMorgan, it's substantially losing its share. 

According to the bank's report, in 2021, Ethereum's market share of NFTs has dropped from about 95% to around 80%. The same publication stated that the Solana blockchain captured most of the lost volume share. 

2. Fractionalized NFT art

Offering fractionalized NTFs of real-world artworks is one of the most prominent trends on the NFT market that might fill the gap between traditional art and its new redefined form that NFTs initially proposed. For centuries the art market was associated with lucrative investment opportunities. Yet, what has been stopping ordinary investors were high entry barriers. Investing in Picasso or Rothko can generate vast profits, but thinking realistically, how many people would be able to afford them? What fractionalized NFTs offer is the democratization of high art investment. 

Filling the gap between real-life's and digital art

Notwithstanding how futuristic it may sound, the trend already has its beginning with STO's boom and tokenization project backed by art. For example, in 2021, Switzerland-based digital asset bank - Sygnum and art investment business - Artemundi teamed up to mint 4,000 security tokens backed in Picasso's Fillette au béret. Each could be bought for a fraction of the full artwork value. However, if we wanted to distinguish the beginning of art's tokenization, we'd have to go back to 2017 when Maecenas tokenized Andy Warhol's 14 Little Electric Chairs.

Essentially, those projects didn't differ substantially from other tokenization of unconventional assets, such as cars or precious metals. Furthermore, it is notable that in both cases, fungible tokens were used, which means that every single one of them has an equal value and can be traded directly for another. At the same time, none of them represent a particular part of an artwork. But this matter can be changed by applying NFTs.

What NFTs bring to the art world

What differentiates NFT's art tokenization and the one facilitated by fungible tokens is the fact that the first one involves "dividing" an artwork into pieces and minting tokens that represent them. Here every token is unique and represents different parts of an artwork. NFTs give that extra layer of uniqueness that previous forms of fractionalized art ownership were missing. 

The relationship between pop art and NFTs is rather obvious; therefore, it shouldn't be surprising that one of the first artworks tokenized was the one created by a true contemporary pop art icon - Banksy. In 2020, Exposed Wall extracted his mural, Gorilla in a Pink Mask, from one of the buildings in Bristol and tokenized it into 10,000 fractionalized NFTs. Each was sold for $750, which made an ordinary consumer buy their unique part of a piece created by one of the most influential artists of our time.

3. Big brands start to use NFTs

It's quite a common pattern for new technology solutions that the success of smaller projects eventually attracts the greatest of this world. NFTs, for sure, aren't an exception.

Currently, more and more brands are starting to explore opportunities that NFTs can bring them. So far, leading industries are fashion and, surprisingly, food. Companies such as Gucci, Louis Vuitton, and even McDonald's or Taco Bell have already released their limited digital collectibles. For big brands, minting NFTs allows them to build stronger brand awareness and increase customer engagement. 

What's important, such projects stimulated the significant interest of NFT holders. A great example of that is Pringles, which created a limited collection of NFT crisps with "virtual flavor." Limited to just 50 versions, tokens were sold by the company for the price of the normal pack of crisps - $2. But today, their price hovers around 4 ETH on OpenSeaand Rarible.

The music industry is another branch where we're likely to see more and more applications of NFTs coming this year. Artists all over the world started to notice and use the potential of this technology, which allows them not only to embrace their relationship with fans but also creates new revenue streams. 

American band Kings of Leon was one of the first to leverage this technology in the industry. Their eighth studio album, When You See Yourself, was released in March 2021 as an NFT token. The sale of NFTs, in which the company Yellow Heart was represented, ended on March 19, generating over $2 million in revenue. 

The NFT tokens released by the band in many ways resemble the typical merch of artists: they guarantee access to future concerts, covers, or a limited vinyl edition. The applied technology makes NFT tokens unique. Because NFT tokens use smart contracts, a set of rules may be taken into account by their creator to determine what should happen when an NFT is used or changes hands. It is precisely this aspect of NFT tokens that is the most valuable for the music industry.

Thanks to NFT tokens, musicians can retain direct ownership of the rights to the song and collect royalties for playback and sales without the intervention of intermediaries.

NFT music market flourishes

Kings of Leon were quickly followed by other prominent artists who decided to release their own NFT collections or even whole albums saved as non-fungible-tokens. In 2022 this trend will be even more visible as today artists don't have to launch their own page to sell NFTs; instead, they can use one of the already created NFT marketplaces. 

Band Royalty NFTs is an excellent example of such a venture. This music NFT marketplace not only enables musicians to release their music in the form of NFT, but also allows them to earn a share of income every time their song is played.

5. Personality NFT 

Apps that enable artists to perform as an NFT personality could be the next big thing in 2022. "I think this year [2022] we'll definitely start seeing more of these personalities that are NFTs," says Jace Kay, Bored Ape Yacht Club and Stereoheadz founder. 

Substituting your real-life personality with digital isn't something new for musicians and other stage performers. Yet, what was started by Gorillaz in 1998, is now being taken to a new level in NFT space. 

6. Playable NFTs

NFT games might be the hottest trend in the gaming industry right now. As we mentioned before, the current NFT boom started with a game. Therefore the link between non-fungible tokens and the gaming industry seems almost natural. 

The gaming industry is a powerful branch fueled by its consumers' passion. When gamers launch their favorite title, they immerse themselves in a new, alternative world. A quick look at the most popular games of the last decade, like League of Legends, Fortnite, or Counter-Strike, should be enough to see how modern gamers care about their characters, skins, and other in-game items. They treat them as an extension of their creative self. And what's important, they can pay a lot for it.

The games have shown us how far beyond the real world urge to build a collection of unique items can go. But do the purchased gaming collectibles become their property? Do these items differ somehow from the ones possessed by others? What is the actual value of an asset? Often, the answer is not so simple. In 2021, NFTs showed us that they might change that. 

Everywhere where users collect and trade in-game assets, NFTs can highly improve their experience. Essentially, they assure players about the authenticity and scarcity of gaming assets allowing them to keep full ownership of the purchased assets. 

Collectible games seem to be a perfect environment for NFTs. That's why we have seen a rapid growth of projects of such type during the last year. Yet, the potential of NFT gaming solutions goes far beyond them. Just think about online board games or PVP battle games. 

Currently, the NFT market is the fastest developing branch of the DeFi world. Since 2021, we've been observing an actual boom in the NFT space. Thanks to blockchain technology, new possibilities are constantly emerging, and we can expect even more groundbreaking implementations in 2022.

Last years’ experience shows that even the most prominent companies are not afraid to stray from the path, and introduce innovations. NFT can become one of them. Obviously, in some industries, a more expansive use is only a song of the future, but all signs point to it happening quicker than we may anticipate.

Are you thinking about your own NFT project? In the industry, there is still a lot of space for development, so this may be the perfect moment. Consult our experts at Nextrope for free. Contact us at contact@nextrope.com.

Tagi

Most viewed


Never miss a story

Stay updated about Nextrope news as it happens.

You are subscribed

Authorization and Identity: Chainlink Use Cases

Karolina

14 Feb 2024
Authorization and Identity: Chainlink Use Cases

Chainlink stands at the forefront of enhancing security and compliance within smart contract-enabled blockchain networks. By enabling direct access to real-world data, Chainlink ensures that blockchain applications can operate with the same level of trust and verification as traditional systems. This integration is crucial for a wide range of applications, from financial services requiring Know Your Customer (KYC) and Anti-Money Laundering (AML) compliance to any form of digital agreement that needs to securely verify the identity of parties involved.

Overview

Chainlink is a decentralized oracle network that plays a critical role in bridging the gap between smart contracts on blockchain networks and real-world data. It enables smart contracts to securely interact with external data.

  • Decentralized Data Oracles. Chainlink's network of decentralized oracles ensures that data fed into smart contracts is accurate and tamper-proof, mitigating risks associated with relying on a single data source.
  • Smart Contract Connectivity to Real-World Data. It facilitates the seamless integration of external data sources, such as financial market data, weather information, and much more, enabling smart contracts to execute based on inputs from the real world.
  • Chainlink VRF (Verifiable Random Function). This feature provides a secure and provably fair source of randomness for blockchain applications, crucial for gaming, NFTs, and any application requiring random number generation.

READ: "What is Chainlink"

When it comes to authorization and identity verification, Chainlink's role becomes even more crucial. By connecting smart contracts with external data sources, such as governmental identity databases or digital identity verification services, Chainlink enables the creation of blockchain applications that require verified human identities. This capability is essential for applications that must adhere to regulatory standards or for those seeking to mitigate the risk of fraud.

Moreover, Chainlink's decentralized nature ensures that the process of identity verification is not only secure but also resistant to manipulation. By leveraging multiple independent oracles to fetch and validate data before it's provided to a smart contract, Chainlink ensures a level of reliability and trustworthiness that centralized data sources cannot match. This decentralized approach to authorization and identity verification opens up new possibilities for blockchain applications, making them more accessible, compliant, and secure for users around the globe.

The integration of Chainlink's decentralized oracle network into the domain of authorization and identity verification heralds a new era of security, efficiency, and compliance for blockchain applications. By leveraging real-world data and external verification services, Chainlink enables smart contracts to perform functions that were previously unthinkable in the blockchain space. Here, we explore several key use cases where Chainlink's technology significantly impacts authorization and identity verification processes.

E-Signatures

In the digital age, e-signatures have become the norm for legally binding agreements, eliminating the need for physical presence or paper-based documents. Chainlink oracles facilitate the integration of blockchain applications with leading e-signature providers like DocuSign. This integration ensures that e-signatures can be verified and recorded on the blockchain, providing immutable evidence of agreement and authorization. Furthermore, by enabling smart contracts to interact with e-signature solutions, Chainlink opens the door to automated contract execution based on the completion of digitally signed agreements, thereby streamlining business processes and reducing the time and cost associated with manual verification.

Biometrics for Smart Contract Authorization

Unstoppable Domains uses Chainlink oracles to enable users to tie their off-chain Twitter identity to their on-chain Ethereum domain name (Source: chain.link)

Biometric verification offers a high level of security and convenience for identity verification, leveraging unique physical characteristics such as fingerprints or retinal patterns. Chainlink enables smart contracts to securely access and verify biometric data, ensuring that only authorized individuals can trigger certain actions on the blockchain. This use case is particularly relevant for access control systems, secure transactions, and identity verification processes that require a high degree of trust and security. By connecting smart contracts with biometric databases and verification services through Chainlink oracles, blockchain applications can achieve a new level of security and fraud prevention.

Credential Verification

Credential verification is crucial in numerous applications, from financial transactions requiring proof of funds to access systems demanding specific security clearances. Chainlink oracles play a pivotal role by securely relaying credential verifications from external systems to the blockchain. This capability allows smart contracts to automatically verify users' credentials in real-time, facilitating seamless transactions and interactions that require verified identity or authorization credentials. For example, a decentralized finance (DeFi) platform can use Chainlink to verify a user's creditworthiness or asset ownership before allowing them to participate in lending or borrowing services.

Social Media Identity and Domain Names

The integration of social media identities with blockchain applications enhances user experience by providing more intuitive and human-readable identifiers, such as domain names or social media handles. Chainlink oracles facilitate this by securely linking off-chain social media identities to on-chain addresses or domain names. This use case not only improves the usability of blockchain applications but also adds an extra layer of verification, as users can easily confirm the authenticity of the parties they are interacting with.

Intellectual Property Management

Chainlink's decentralized oracle network enables smart contracts to interact with external IP databases for verifying ownership and facilitating transactions related to intellectual property (IP). This application is particularly useful for copyright and trademark management, patent licensing, and royalty distribution. By automating IP verification and transactions through Chainlink, creators and owners can more efficiently manage their rights and receive payments, while users gain access to verified IP assets.

Contribution Bounties in Open Source Projects

Open-source projects can leverage Chainlink oracles to automate the verification of contributions and the distribution of bounties. By connecting smart contracts with public code repositories like GitHub, Chainlink allows projects to automatically track contributions, verify the fulfillment of predefined conditions, and release payments to contributors. This application streamlines the contribution process, incentivizes open-source development, and ensures that contributors are fairly compensated for their work.

Conclusion

Chainlink significantly impacts blockchain, enhancing security and compliance, especially in authorization and identity. It bridges real-world data with blockchain, ensuring trust and wider adoption. As blockchain evolves, Chainlink's innovations promise a more inclusive digital future. Its key role in securing and streamlining blockchain applications marks a crucial step forward for digital interactions. Chainlink is pivotal for a secure, compliant, and efficient blockchain ecosystem, shaping the future of digital transactions.

If you are interested in utilizing Chainlink or other blockchain-based solutions for your project, please reach out to contact@nextrope.com

Chainlink vs. Avalanche: Exploring the Blockchain Frontier

Karolina

13 Feb 2024
Chainlink vs. Avalanche: Exploring the Blockchain Frontier

Chainlink emerges as the bridge between the real world and the blockchain. On the other side, Avalanche flashes through the blockchain space with a lightning speed platform that promises scalability without compromise. Both are revolutionaries in their own right, yet their paths are markedly different. Chainlink's quest to secure the integrity of off-chain data in a decentralized manner contrasts with Avalanche's mission to redefine blockchain's scalability and usability. But what happens when these paths intersect?

Overview

Chainlink is a decentralized oracle network that plays a critical role in bridging the gap between smart contracts on blockchain networks and real-world data. It enables smart contracts to securely interact with external data.

  • Decentralized Data Oracles. Chainlink's network of decentralized oracles ensures that data fed into smart contracts is accurate and tamper-proof, mitigating risks associated with relying on a single data source.
  • Smart Contract Connectivity to Real-World Data. It facilitates the seamless integration of external data sources, such as financial market data, weather information, and much more, enabling smart contracts to execute based on inputs from the real world.
  • Chainlink VRF (Verifiable Random Function). This feature provides a secure and provably fair source of randomness for blockchain applications, crucial for gaming, NFTs, and any application requiring random number generation.

READ: "What is Chainlink"

What is Avalanche?

Overview

Avalanche is a highly scalable blockchain platform designed for decentralized applications (dApps) and custom blockchain networks. It distinguishes itself with its emphasis on scalability, speed, and eco-friendliness.

Key Features of Avalanche

  • High Throughput and Low Latency. Avalanche boasts a high transaction output rate with low latency, making it an ideal platform for scaling dApps and financial solutions.
  • Eco-friendly Consensus Mechanism. Unlike proof-of-work (PoW) systems that require significant energy expenditure, Avalanche uses a novel consensus mechanism that is energy-efficient, contributing to a more sustainable blockchain ecosystem.
  • Scalability and Interoperability. The platform supports the creation of multiple custom blockchains that can interoperate seamlessly, facilitating a diverse and scalable ecosystem of applications.

READ: "Avalanche’s Investment in Real-World Assets Tokenization"

As blockchain technology continues to evolve, understanding the nuances between different platforms and solutions like Chainlink and Avalanche becomes increasingly important. Here's how these two blockchain giants stack up against each other:

Underlying Technologies and Architectures:

  • Avalanche utilizes a unique consensus protocol known as Avalanche consensus, combining the benefits of classical consensus algorithms with the decentralized nature of blockchains. This protocol allows for high throughput, quick finality, and energy efficiency.
  • Chainlink, on the other hand, is not a blockchain but a decentralized network of nodes that provide data to blockchain networks. It uses a network of independent node operators who are incentivized to provide accurate data to smart contracts.

Consensus Mechanisms:

  • Avalanche employs a Proof of Stake (PoS) model designed to be lightweight and energy-efficient. Validators participate in reaching consensus by staking AVAX tokens, contributing to the network's security and governance.
  • Chainlink does not use a consensus mechanism in the same way a blockchain network like Avalanche does. Instead, it relies on a decentralized network of oracles to validate and relay data, ensuring the integrity of information provided to smart contracts.

Chainlink is best suited for applications that require secure, reliable, and tamper-proof data inputs from the real world. This includes:

Avalanche is optimized for a wide range of blockchain applications needing high throughput, quick finality, and scalable infrastructure, such as:

  • Scalable DeFi platforms and DEXes.
  • Enterprise blockchain solutions.
  • Custom blockchain networks (subnets).

Examples of Real-World Applications and Partnerships:

  • Chainlink has partnered with Google Cloud for cloud data integration and with numerous DeFi platforms like Synthetix and Aave for price feeds and randomness.
  • Avalanche has formed partnerships with Deloitte for enhancing security and speed in disaster relief platforms and with top DeFi protocols to build on its highly scalable network.

Ecosystem and Community

Development Community and Ecosystem Support:

  • Both Chainlink and Avalanche boast robust and active communities. Chainlink's community is highly engaged in developing external adapters and securing data for smart contracts. Avalanche's community focuses on developing dApps and custom blockchain networks.

Tools, Resources, and Support:

  • Chainlink offers extensive documentation, a vibrant developer community, and grants for projects integrating Chainlink's technology.
  • Avalanche provides developers with comprehensive resources, including tutorials, technical documentation, and funding for ecosystem growth through the Avalanche Foundation.

Tokenomics and Market Performance

  • LINK (Chainlink's token) is used to pay for services within the Chainlink network, including data requests to oracles. It incentivizes node operators to provide accurate data.
  • AVAX (Avalanche's token) serves as the native currency within the Avalanche network, used for transaction fees, staking, and governance.
  • In terms of market performance, both LINK and AVAX have shown significant growth and adoption, reflecting their utility and the demand for their respective network's services. However, their performance can vary based on overall market trends, technological advancements, and adoption rates in their specific use cases.

LINK vs AVAX

Potential for Integration

The potential for integration between Chainlink oracles and Avalanche’s blockchain platform is substantial. Chainlink’s decentralized oracles can provide Avalanche-based applications with secure and reliable real-world data, enhancing the functionality and scope of Avalanche’s already fast and scalable blockchain. This integration can benefit a wide range of applications, from DeFi and insurance to gaming and prediction markets, by providing them with the essential data needed to operate effectively and transparently.

Conclusion

Chainlink and Avalanche, while serving distinct purposes within the blockchain ecosystem, demonstrate a powerful synergy when combined. Chainlink’s ability to provide secure, reliable, and decentralized data complements Avalanche’s high-throughput, scalable blockchain platform, enabling developers to build more complex, useful, and transparent applications.

READ ALSO: "Chainlink vs Polkadot"

If you are interested in utilizing Chainlink or other blockchain-based solutions for your project, please reach out to contact@nextrope.com