NFTs Are Looking To Make A Comeback. What Does The Market Need?

Non-Fungible Tokens (NFTs) took the digital world by storm in recent years, providing a novel foundation for extreme innovation in digital art, collectibles, and other assets using blockchain technology.

However, after an initial frenzy of excitement and exorbitant sales, the NFT market experienced a significant slowdown. Now, signs are pointing to a potential resurgence. But what factors are necessary for NFTs to make a successful comeback? In this article, we'll delve into the key elements the NFT market needs to reignite its momentum.

For NFTs to regain traction, they need to offer more than just digital bragging rights.

Enhancing the utility of NFTs by enabling interoperability across different platforms and applications could unlock new use cases and value propositions. For example, NFTs could be integrated into gaming ecosystems, virtual worlds, or even financial services, allowing users to leverage their digital assets in diverse ways.

Nevertheless, several industry participants have looked clearly into the market and are now working to ensure that developers in the NFT sub-genre have the resources that they need to really optimize their profitability and efficiency.

Olly Wilson, CEO and co-founder of the leading NFT data aggregator, SimpleHash, contributed to our research to highlight some of the key issues that need to be tackled to start seeing scale.

1. What role do you envision SimpleHash playing in the NFT space?

We abstract away all of the complexity of dealing with NFT data for developers. Instead of worrying about standards, support for different chains, integrating with multiple marketplaces, and spending time and money on NFT storage and compute, we handle it for them. Instead of worrying about infrastructure, crypto teams working with NFTs can focus on building the best end-user experience possible.

2. How do you see the data gap evolving for NFTs?

Our original thesis was that NFT activity was rapidly going multi-chain (i.e., not just on Ethereum), and that’s absolutely borne out over the past two years. As an example, Solana and Bitcoin Ordinals NFTs now see more volume than Ethereum. The number of EVM L2s continues to proliferate, as do other L1s - and each of these ecosystems have a constantly changing set of standards to support. NFT marketplaces continue to pop up.  Plus, as NFT media becomes more complex, the storage, compute, and real-time processing becomes even more of a challenge. Taking all of this together, this creates a significant “data gap” where most teams are better off offloading this set of problems to a trusted provider.

3. Do you believe that there are more use cases that can be seen with NFTs?

Yes - some of the use cases I’m most excited by include loyalty and reward programs that are actually better than their off-chain equivalents. There’s still massive untapped potential for NFTs within games too. Because of where we fit in the stack and are generalized across all chains, we can serve any of these use cases - whether their biggest needs are metadata, history, or market prices.

In terms of how SimpleHash fits in – we’ll continue to abstract away the complexity of working with this data, regardless of use case. Developers and creators building the next big on-chain game shouldn’t have to care about indexing arbitrary tokens on the chains they want to support, nor should they have to cache media, metadata, or other essential data on the NFTs themselves. By working with us, they can focus on what matters - building an awesome end-user experience. The same is true for any other conceivable use case - we’ll be there in the future as a reliable partner who can say “no matter what kind of app you’re building, if you’re using NFTs or tokens, let us do the heavy lifting on setting up your infra, while you do what you do best” – ideally they don’t even have to think about us!

4. What bespoke resources does your platform plan to provide to improve the standing of NFTs among NFT collectors?

SimpleHash has a mission to help all stakeholders within the NFT and broader digital asset ecosystem. We make it super easy for developers to build sophisticated applications that help inform anything a collector might care about. For example, we have a bespoke set of endpoints to provide wallet valuation, along with those that show the top and trending collections. Getting even more granular, we offer a full set of market data streams - including all NFT sales, listings, bids and floor prices across the main marketplaces and chains. Using all these, app developers can help provide detailed insights to collectors on which of their collections are doing well, which might be up and coming, along with the details on specific holders and trading patterns. We firmly believe that more information, and easier access to tooling is crucial for future development of the space. This extends to chain ecosystems too – much of the excitement within the NFT community has come from lower cost chains, like Base (where we have a special subsidized plan program), Zora, and Solana – so supporting these chains from the get-go has been crucial for us.

5. What do you believe is the future of the NFT space in general?

Digital assets (of which NFTs are just one form) will underpin a huge part of the future internet, and we intend on helping power it all. As mentioned, the most exciting future we see for NFTs include loyalty and reward programs, core primitives in games, proving provenance of content in an AI content generated world, and yes, collectibles / PFPs too. We also expect the space to democratize somewhat too, given the activity trends on lower-cost chains (Base and Solana most notably). The days of paying hundreds of dollars just to get access to a mint are over - and we’re excited to see what creators and developers do when it becomes much easier (and cheaper) to build on these networks.

Conclusion

As the NFT market looks to make a comeback, it’s important to focus on reliable and solid projects with proper use cases. And even though the skepticism remains, there are several projects that are looking rather interesting across the board.