NFT multidimensional analysis: NFT value and use scenarios
How is NFT priced and how is NFT selected for purchase? This is one of the more concerned directions in the current market. By starting from different attributes of NFT, this paper provides a unique idea of how to increase the value of NFT while illustrating the source of NFT's value.
How to accurately interpret the value source of NFT? This article deconstructs and combines NFT by analyzing four dimensions: social, art, application and asset, which I believe will be especially important for NFT creators and investment players nowadays.
It's better to know what you know than to have a target, and to know what you know.. This is the biggest contribution of this paper to NFT.
The uniqueness of the picture given by NFT is equally identified with the holder's interest in the community.
Back two years ago, no one could have imagined that today's NFT market would be so booming, with countless new NFT projects coming out every day. A provable unique token, even if simplified to a simple JPEG format (which is the format in which NFT appears on the user's screen), represents a traceable value for its holder.
Beneath the "deceptive" JPEG appearance of NFT lies a variety of technological advances. New technologies are always being created and then adopted to meet our basic needs, wants and desires.
NFT has become a mainstream media and a topic of much discussion, but there are still some people who are disgusted by the amazing performance of NFT. However, as a famous quote says, "To deny our impulses is to deny the very thing that makes us human."
Web 2.0 has reduced the cost of social interaction between Internet users and is quickly having an impact on users' online/offline interactions.
And Web 3.0 solves the trust problem by including the verification process in a smart contract. Thanks to blockchain technology, NFT is spreading like wildfire and gaining widespread popularity in its value discovery market as well as the corresponding gaming industry through landed applications such as social media and entertainment.
NFT cross-chain applications may be the next NFT usage scenario. However, we will discuss this in the next article and take an in-depth look at the future of NFT and its various applications in cross-chain environments.
Where is the underlying focus of NFT?
Holders believe thatAxie Infinity NFT provides the utility of game engagement, participation in community governance, and the ability to generate revenue through P2E rewards.
Another example is BAYC NFT, which has much of its utility due to the vast, prestigious and wealthy network it offers to its owners. Within each of these possible utilities, the theme is how NFT provides utility to a broader audience.
NFT utility is the benefit of the purchaser and holder of NFT seeing themselves as the HODLER/owner of a particular project.
The spring of 2021 saw a rapid shift in digital identity, and Twitter users noticed it first: more and more Twitter accounts turned their avatars into cartoonish apes.
While NBA players and numerous A-list celebrities entered the NFT marketplace, BAYC gathered millions on the NFT secondary marketplace platform OpenseaETHTrading volume.
The success of BAYC and other projects generating NFTs can be attributed to the smooth landing of their products and meeting the community's need for social utility. The indestructible uniqueness of NFT, backed by blockchain technology, lays the foundation for meeting individuals' needs for a social digital identity.
The purpose of the NFT community is to build, build and aggregate consensus internally and externally on.
- Internally, it is how the socialized utility of community members is met.
- External is the performance of market prices in the past, present and future (expected).
Due to the difficulty of finding new usage scenarios for NFT, the value of NFT is largely (not exclusively) based on a shared community consensus. nft users tend to associate the value of NFT with its market price, i.e. the floor price of projects on Opensea.
I think the artistic attributes of NFT's success lie in the uniqueness of the artists' inspiration, their work with blockchain technology, and their intrinsic level of artistic value.
The value of NFT artworks is based on their cultural impact and significance.
A "good" piece of artwork will demonstrate mainstream values, ethical standards, and inspire members of the community. It is fundamentally positive in terms of mainstream values, community vision and the desire to enhance the community's impact.
This particular type of NFT audience will be more interested in NFT artwork than in community or availability. Therefore, value is also placed on trustworthy artists or trustworthy companies.
The market behaves similarly to traditional art collectors who have a hobby of collecting. These collectors appreciate art and do not trade their pieces often, so they are not interested in applied value.
Gamification of NFT
The actual game experience, where players can choose to pay for game features with low expectations of future returns and the impression that in-game NFT is used for game activities rather than financial products, provides emotional projection for players, especially when they spend resources to upgrade NFT and spend time fighting with NFT characters.
Such predictions further reduce users' expectations of future returns.
Music NFT allows fans to purchase songs, albums and event tickets. They also provide artists with the ability to monetize more about their names, likenesses, images and artwork.
DAO Governance for NFT
DAOs are speculated to be the next generation of companies (of expression). They provide a new form of organization for coordinating global investments and communities. Today, many DAO organizations are emerging. In terms of governance, many forms of NFTs will be used, with functional NFTs as a possible example.
DAO members can contribute to the development of DAO governance through their NFT holdings. Members who make outstanding contributions can also receive airdrops of DAO Token. At the same time, DAO NFT will also serve as a pass to the DAO system (to play its governance role)
NFT's redefinition of real assets
With the financial nature of cryptocurrencies, NFTs have specific asset properties.
The market price fluctuations they amplify are a factor in their real value. nft derives from many variants of financial applications such as trading, lending, splitting and ETFs, and can integrate complex financial contractual relationships.
As a result, NFT has become a trusted financial investment that represents ownership in the cryptocurrency world and stores guaranteed rights in a smart contract.
NFT as a vehicle for financial behavior will become more and more, and even become the main source of value for NFT in the future.
Blockchain technology and smart contracts provide utility for artists and fans. Artists will keep more of the profits from their work, and fans who want to show their support for their favorite artists can do so by purchasing their NFTs.
Tickets and exclusive passes are the future element of NFT in the music industry.
The concept of metaverse has attracted a great deal of attention to the crypto world. However, the idea of metaverse cannot be realized without the integration of different utilities of NFT. Therefore, the coupling of socialization utility and art utility is necessary.
Social Properties + Art
Through the formation of a community, users connect with each other based on a common consensus of love for the artwork and, as a result, show a strong desire to socialize. In addition, promoting the artwork through the community further expands and contributes to the community consensus on the project.
Take the whitelisting mechanism as an example. Prior to the pre-sale phase of the project, the most loyal and influential community members are whitelisted. This allows them to cast a certain number of NFTs before the public offering.
As a result, inspired artwork adherents are motivated and encouraged to spread the project beyond the community. Passionate community members reinforce the shared expectations of the project, inviting more people to join the community and thus creating an upward spiral.
NFT was created through a combination of blockchain technology and avant-garde art. Both have been challenged by the mainstream media, and the core of these NFTs is highly abstract and requires deeper engagement and understanding by market participants.
Artists package their self-identity through painting and present their work to the public through different blockchains. In the process of participation and understanding, the audience develops a common consensus of "understanding and identity", which eventually leads to the emergence of a community.
Through community development, NFTs will be deconstructed and given more new meaning. This will attract more players to enter and promote a positive and valuable community cycle.
A style that blends with the community
Indeed, community and art become concrete expressions of culture. Cultural influences can impact NFT audiences around the world and provide an imaginative space for artists.
NFT is the perfect combination of art and social utility.EtherThe low liquidity from the network's inherently high gas costs has created a net positive market expectation for the NFT community.
On the other hand, communities can be driven by artistic demand. Combining the community effect with market speculation, the generated NFT is geared towards a group of audiences, including art lovers, KOLs, speculators and community builders. As the value generated by the community increases, new members will flow in, reinforcing the community values and thus creating an upward spiral effect.
We can see NFT in areas such as gaming, music, domain names, insurance, collectibles, physical assets and identity. in addition, NFT acts as a container for displaying assets and mapping virtual assets.
Users' holdings are not based on love of NFT content or social expression of NFT, but on real needs such as getting rewards.
To summarize the value performance of NFT
The performance of each individual NFT varies. However, by combining various applications, the value of NFT grows.
NFT has grown rapidly over the past year. mainstream programs such as Cryptopunks and BAYC have achieved hundreds of millions of dollars in trading volume. According to Messari, the NFT secondary market cap has risen from $100 million to $5 billion in the past year. The entire NFT secondary market has reached $22 billion in sales. The data underscores that the NFT market is booming.
With the rise of Web 3.0 and the introduction of the metaverse, the future of NFT will have a more profound impact on the way we live, socialize and invest. The ability to integrate the utility of different NFTs will bring unimaginable value to NFT and blockchain adoption.
We have witnessed the success of various projects that integrate the different utilities of NFT and then present them in the form of a single product. Ultimately, the product effectively solves a set of problems, namely the unfulfillment of basic human needs. The extraordinary performance of the described products is attributed to the effectiveness of the problem solving.
The development of foreign NFT market has a long history, NFT application scenarios show diversified development trends, avatars, games, ticketing, music all kinds of new projects are emerging.
Currently most NFT presentation can only meet the audio-visual experience (such as music, video, pictures), but there are platforms that use it as a proof of rights or a tool to attract traffic, such as the use of physical binding, ticket vouchers such as the rights and interests (such as commercial use, voting rights, membership rights, etc.) enjoyed by users holding NFT.
There are also IP parties that cooperate with NFT game platform to issue NFT game equipment, trying to subvert the inherent paradigm of traditional games in which players only enjoy the right to use equipment rather than ownership, giving players ownership, players can create and customize virtual showrooms in the NFT platform and access the meta-universe community to co-create imaginary space.
Or like the recently hot avatar projects (such as BAYC of Bored Ape), their mobility is strongly related to their own design and star effect, and users' consensus on the value of head projects is getting stronger and stronger. Although such avatar projects are hot in crypto communities and can be seen as meeting the demand of community identity of some groups, the durability of displaying avatars in static jpeg format only is doubtful.
By extension, let's go back and talk about the current situation in the country
At present, there are still more issues to be explored in the NFT industry.
First of all, it is a matter of hype.(a) At source the price of NFT has been divorced from the logic of physical issue pricing, and in the NFT free flow market, buyers are prone to get caught up in the frenzy of the huge price bubble of NFT and see NFT as a financial investment product for investment speculation.
The second is the question of authority and responsibility.One is that although blockchain technology can trace the information of the digital content that has been chained and ensure the authenticity and ownership attribution of the digital content after it has been chained, the content itself in digital form can be easily copied at low cost and the platform cannot trace the copyright attribution under the chain.
IIIs part of the platform hairThe NFT user agreement of the line considers that users only have the right to use rather than ownership, and there are few typical cases and correct answers for post-distribution ownership disputes, rights and responsibilities (rights and obligations between publishers, distribution platforms, users, and creators' roles and the legal responsibilities they should bear) to refer to.
The third is the storage issue.Affected by the cost, NFT usually does not store data such as pictures and videos directly on the chain, but stores them in other centralized or decentralized storage systems and uploads them to the chain through hash or URL mapping, which means that some NFT project contents have the risk of content resources being lost or tampered with.
The fourth is the regulatory issue.Since 2021 NFT fever has risen sharply, the market developed NFT platform and issued NFT projects are numerous, the use of NFT gimmick financing money laundering, platform runaway incidents occur frequently, the relevant regulatory bodies are more difficult to control the occurrence of such events, while the industry also needs to both protect the rights and interests of participants, to promote the orderly development of NFT, but also does not harm the creative regulatory boundaries.
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