Assessing NFT Financialization and its Impact on the NFT Trading Market

2023/07/21 07:58:23

Date: July 14, 2023

In this NFT recap, we'll delve into all the essential developments in the NFT space over the past week, ensuring you stay informed and up-to-date on the latest happenings. NFT is all about attention, and attention shifts quickly! There are tons of updates and excitement to share with you all on this week’s NFT Market Recap. We hope you enjoy :) 👇

📈 Market Overview

🔑 Key Takeaways

  • The trading volume recorded a new local low at approximately 6k ETH, while the majority of leading NFTs experienced a minor rebound, showing signs of a slight relief rally.
  • The NFT market saw mixed results in the past week, with some sectors performing well while others struggled. The Art sector was the top performer, with a 7-day change of 2.5%. The Game sector was the worst performer, with a 7-day change of -1.70%.
  • The top gainers in the NFT market in the past week were:
    • Genuine Undead (hiUNDEAD): 26% increase in floor price
    • Gazers (hiGAZERS): 23% increase in floor price
    • Pudgy Penguins (hiPENGUINS): 12% increase in floor price
  • The bottom losers in the NFT market in the past week were:
    • Renga (hiRENGA): -10% decrease in floor price
    • Otherdeed (hiOD): -11% decrease in floor price
    • Invisible Friends (hiFRIENDS): -46% decrease in floor price

🗞️ Major NFT Headlines

  • Futureverse Secures $54M in Series A Funding from 10T Fund and Ripple for AI-Driven Metaverse and Gaming Expansion.
  • Memecoin Announces 25% of Total Supply Airdrop (17.25B Tokens) to MVPs, Captainz, and Potatoz with an Undisclosed Locked/Unlocked Token Split.
  • Doodles Announces Exclusive Grand Opening Event in Chicago through Partnership with CAMP on August 17.
  • Blur's Founder Pacman Confirms Plan to Allocate More Than Initial 300M Tokens for Season 2 Farmers.
  • Moonbirds Initiates Mythics Egg Activations and Oddities Burns; Up to 100 Mythics to be 'Born' Daily Until 20K Supply is Achieved.
  • Solana Labs Unveils GameShift: A Comprehensive Web3 Game Development API for Simplified Game Creation, NFT Minting, and More.

🚨Assessing NFT Financialization on NFT Floor Prices

In the ever-evolving world of Non-Fungible Tokens (NFTs), one can observe a substantial shift happening. NFTs, previously treasured as unique digital collectibles, are increasingly being seen as financial assets. In this article, we'd like to share some insights derived from a recent article on Overpriced JPEGs. These insights help us understand how this shift is dramatically influencing NFT trading strategies.

Transition Towards Financialization: It's interesting to see how the financialization of NFTs is happening gradually, marked by new elements like advanced trading features, token incentives, lending, and futures. These features are morphing the NFT market, aligning it closer to traditional financial markets. While it opens up new opportunities, it also redefines how we perceive and market NFTs.

Influence of Advanced Trading: Advanced trading mechanisms, including analytical charts, mass NFT trading, and live bidding, have certainly made the trading process more efficient. Yet, they've altered the perception of NFTs. Instead of being unique digital collectibles, NFTs are more and more seen as mere numbers on a screen, which undermines their non-fungible nature. This shift changes how NFTs are marketed and the stories created around them.

Token Incentives: Blessing or Curse? Token incentives are a noteworthy addition to the NFT landscape. While they've succeeded in attracting new traders and fostering more market activity, they've also placed an emphasis on base prices and financial gains over the unique attributes of NFTs. This shift might require NFT marketing strategies to focus more on financial potential rather than the artistic or cultural value of NFTs.

Positive Aspect of Lending: Lending in the NFT world allows holders to get loans against their NFTs, which is certainly a beneficial development. It provides more opportunities for holders to keep their NFTs for a longer duration, which may support marketing strategies focused on establishing long-term value and community around NFT projects.

Futures, Perpetuals, and Options: A New Horizon: With the advent of futures, perpetual swaps, and options, NFT traders have more possibilities to explore. However, these financial tools also lead to an emphasis on price movements and speculation, further eroding the non-fungible nature of NFTs. This development could challenge NFT marketing, as it might necessitate a shift in focus from the unique characteristics of NFTs to their financial potential.

In Conclusion: A Delicate Balancing Act The ongoing financialization of NFTs presents both opportunities and challenges for NFT marketing. While it provides new ways for promoting NFTs and attracting traders, it also changes how NFTs are marketed and the narratives built around them. It's a balancing act for those involved in NFT marketing, as they must emphasize the financial potential of NFTs while preserving their unique, non-fungible nature. It's a challenging yet exciting phase, and we are keen to continue learning and sharing insights along the way.