Incoming Narratives & Trends for 2022 (Part 2)

NFT has more to offer than just pixelated art, and loyal community members will continue to reap rewards through airdrops

Understanding the NFT and DeFi Boom 

Non-Fungible Token (NFT) and Decentralized Finance (DeFi) projects hit a home run in 2021. It immediately tapped into a treasure trove of pent-up demand. NFTs in the form of digital art immediately reached out to the retail market. DeFi, on the other hand, created a better alternative to the legacy system. It also opens the door to the unbanked and underbanked. 

The key takeaway from these successes is creating utility through the blockchain and tapping into an existing market. NFT art is easy to understand, and so is basic DeFi. This promotes ease of adoption. Participants that have warmed up to the concept of crypto through NFT and DeFi will likely stay and explore the crypto ecosystem. 

The NFT sector is likely to change from its current form to play a more dynamic role, especially in the DeFi industry. DeFi will also continue to break barriers that the legacy financial system could never achieve. 

Gradient style nft concept Free Vector

1. More than Just Apes and Punks

Bored Ape Yacht Club (BAYC) and Crypto Punks cemented their places as crypto pop culture symbols through NFTs. It became a trendy thing in the crypto space as famous personalities purchased these NFTs. The symbolism also allows its owners to flex their wealth. 

NFTs are actually more than just digital art. It can store rights and grant access just like a certificate of ownership or a key to a vault. Intellectual rights protection can be designed into NFTs to grant its owner an automatic right to royalties. 

Venture Capitalists no longer need to hold shares in the projects they have invested in. Their equity participation will be represented by NFTs. The returns on investments will be autonomously distributed to the NFT holders. These NFTs can be sold to the subsequent investor or fragmented into smaller NFTs with corresponding rights. 

Projects can use NFTs to reward their loyal community members, gifting special versions capable of unlocking certain features. This strategy can be deployed on gaming platforms or DeFi platforms. Having a special NFT grants access to certain in-game assets or guarantees a higher yield for each staking exercise. 

Gamers can sell their in-game assets or their account by minting an NFT and placing it in a marketplace. The NFT will track the account and update a ‘market price’ to the NFT.  

Source: Smart NFTs will list a player’s in-game asset in the marketplace in real-time to any willing buyer 

2. Airdrops 

The trend of rewarding early adopters and loyal community members will continue in 2022. Projects can succeed or fail based on their community’s support—efforts such as MetaMask, Zapper.Fi, ZigZag Exchange, Zk Sync, and Hop Protocol are strong platforms with use cases that will likely issue their own tokens. 

However, these tokens may not be distributed like how UniSwap’s ($UNI) airdrop exercise has been carried out in the past. These projects will be careful not to reward those that are on an airdrop hunt. Some basic perimeters will be put into place as qualifying eligibility criteria for the airdrops. 

These airdrops will be massive and early adopters can look forward to a good incentives. Consistent usage of these platforms over time is probably the best way to ensure that users’ accounts meet the eligibility criteria. 

Airdrops may soon take the form of NFTs that grants access or incentives to their community members. One such platform that has done so is a Play-to-Earn platform, Phantom Galaxies. Recipients of its NFTs get to participate in its Beta version for an early peek. 

Source: Airdrops in the form of NFTs grants limited and exclusive access to its owners

3. Crypto Graveyard 

The crypto market is still at the early adopter’s phase. Some trends will emerge because it plays to the crowd sentiment. This may not be sustainable in the long run. One such trend is the massive Annualized Percentage Yield (APY) by Olympus DAO ($OHM) and the forks of Olympus DAO. Another trend is the meme coin mania.  

In order to sustain high APYs, the inflation rate has to be high. A high inflation rate affects the price of the asset. It is for the same reason why projects like Ethereum ($ETH) and Binance Smart Chain (BSC) incorporate a deflationary mechanism.

The market and its participants will mature. Some fads will soon pass. Hence, projects that deliver a good value proposition provide a solution as a prerequisite. 

Source: BSC News

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