Week in Focus 

NFT’s – WC 2nd August

Whenever we hear the word NFTs, what comes to mind is blockchain technology and rightly so, NFTs which stands for Non-fungible tokens has their success and overall validity is built on the Ethereum blockchain technology acts as a ledger for a digital asset and acts to track the specific parts of that data.

NFTs became particularly prominent with the emergence of the COVID-19 pandemic, everybody is trying to provide a platform to survive and NFTs do just that with how it helps individuals place value on special physical assets like artworks, music, video clips, and so on as well as physical objects. NFTs since their emergence and especially its success have certainly divided attention as some people see it as a huge success that’ll surely be around for a while meanwhile, some see it as just brief success. Either way, it is surely a concept worth considering.

In this article, we try to explore the Nonfungible token space and bring our readers up to speed about what it entails. We cover the following as it relates to alternative assets;

• NFTs supporting the meme set up for longevity as an art form
• Social Tokens – Bridging gaps between creators and consumers while providing financial incentives.
• NFTs Slowing Down – A Mere Facade? and
• Exploring more ways to utilize the flexible NFT space through the invigorated NFT Avatars

What are NFTs

NFT is short for Non-fungible tokens and this token is a one-of-a-kind asset that has its value on being the only one of such nature and it cannot be exchanged for other tokens. NFTs involves tokenizing an original item to further authenticate them and make them one of a kind. A common example of tokenizing an original item or real-world object is seen in NBA top shot where tokenized highlights as short as a 10-second video are sold. It could even be a collage of images or physical artworks that could be tokenized and when this item garners a little more popularity, it could be sold for physical money or financial benefits could be attached to its usage.

These tokens have their special nature made possible through a portion of their data being stored on the Ethereum blockchain platform which certifies it as special and especially non-exchangeable. Since NFTs are supported by blockchain technology as well, it means that the transaction history is easily recorded and can be traced on its own private ledger.

Along with being quite authentic, NFTs deliver sorts of bragging rights to their holders as you understand that wherever any tokenized item is displayed, it belongs solely to you.

What are art NFTs

Arts can take several forms from pictures in JPEG formats to videos and even short clips as with NBA Top shot. These works of art may seem quite common owing to the fact that they can easily be replicated and used multiple times and it may seem not to have value but when they have an NFT attached to them, they become special and they could be sold in the art market. Digital items can be tokenized in digital tokens and some game items could be tokenized as well.

This token makes the original of this item stand out from many other items. Just think of it like signature artworks which are one of their kind like the Picasso. The owners of these arts could then resell them and decide on how these arts can be used or displayed. NFTs could either be created by artists of being attached to the existing art forms to bolster art sales.

Crypto art involves creating artworks and linking a Non-fungible token to it then selling this token and right of ownership to customers. Certain marketplaces like Opensea and Nifty Gateway provide a platform for the sale of these arts.

Why NFTs are bad for artists

The original idea behind NFTs was to create a working system through which creatives are able to certify ownership over their arts as well as be rewarded for their works through justifiable payments.

This system has been quite efficient as it has assisted several notable artists to sell tokens to their artworks that show its originality and these sales have resulted in millions of dollars. In fact, since 2017, the space has recorded transactions reaching over $200 million dollars in 2021 alone. This sort of money could predictably gain a lot of attention and it definitely has.

The boom in this space has resulted in the theft of digital artwork on several NFT sites as well as on social media accounts.. This has led to famous artists locking their accounts to prevent other people from tokenizing their tweets without permission even via automated services.
In addition to the issues of theft and forceful tokenization of artworks, there is also the issue of creating NFTs being highly environmentally disturbing as it requires a large amount of power to be generated.

Why NFTs are good for artists

To gain a perception of how a digital artist benefits hugely from the introduction of NFTs, just imagine how many breath-taking artworks are out there on social media like Instagram and Facebook. From wonderful pictures to sounds and more the creators of these artworks on these platforms barely get paid for the amounts of effort, they put into getting these arts out there.

Well to end this sort of unfair reward system, NFTs were created to rewards these art creators by authenticating the arts via tokens after which these tokenized arts could be sold out as an only existing product. This way, justifiable price tags could be placed on these products.

Another way in which NFTs help artists enjoy justifiable income is through secondary sales in which they only sell a part of the art but still retain the ability to gain financial incentives each time their product is used.

Who are the top NFT artists

As with any emerging space especially tech-wise, there are definitely early birds who notice the trend and them are able to get the very best out of it. There are also others who are able to get the very best out of the emerging space by carefully navigating this space to great effect. Some artists who have made great use of these techniques are listed below;

Beeple whose name is Mike Winkelmann and has the top best-selling NFT art named “Everydays”, a collection of sets that sold for $69,346,250.
Fewocious is another name to reckon with when it comes to making great gains from NFTs. Fwocious is an 18-year old digital artist who has sold a total of over three thousand NFT pieces, each of which averaged $5,000 per piece.

Not everyone is comfortable with having their name out there for several reasons but like it or not, it adds a little sauce to the arts provides. One individual who has particularly enjoyed this animosity is anonymous Pak whose identity is unknown but his affiliation with digital art isn’t. He has sold over 1,500 artworks for two decades with each one averaging over $9,000.
Hackatao, a crypto artist also appears in this list of high-achieving crypto artists who produce cryptographic tokens. Hackatao has been able to sell over 1,000 artworks for $7,310.61 per piece.

To properly enjoy space as influential as the one NFT provides, it is quite important to carve your own niche and this is exactly what MAD DOG JONES did. This Canadian-born artist combines art and music together to form dynamic and surreal artworks. This lovely blend has resulted in sales of 1,567 NFT artworks at about $9,063 per piece.

The market for NFTs may also be a good place to look in try to quantify how much growth NFTs are currently experiencing as in the second quarter of this year alone, NFTs have surged to new highs of $2.5 billion in sales.

Are NFTs the future

After NFTs initial Bloom, what’s next? – Seeing through the hype

After widespread success especially in connecting artists and artworks to technology to great effect, questions about the sustainability of this space is been asked and rightly so, there may still be a way to go for this platform to be properly established.

In considering the different properties NFTs possess which may be of great effect in the future, it is advisable to consider the two sides of the coin.
One of these sides is that of placing enough protection for the artists who actively sell merchandise in this space. A particular point of fraud registered in this space is that of plagiarism and copying winning ideas. A similar parallel could be drawn when the internet and web pages were introduced. Several websites were produced and more are still be produced but only a handful of them would succeed. The market has a way of balancing these things.

Another aspect to consider when it comes to the progress of NFTs is related to their early initial bloom. Some people are of the opinion that this bloom may have negative effects on the space as several tokens may begin to lose their relevance. That may not be the case as we know so well with technology, the ever-evolving nature would ensure that new uses of this technology and better usage of the platform is guaranteed.

How many NFT tokens are there

NFTs are applicable in every form of art seeing that they are not fungible, they give artworks authenticity and allows creators to gain from their sales.

NFTs are applicable in digital art, collectibles like physical card collections in completely digital format, games, music, films, memes, sports, fashion, pornography, and academic researches can all be tokenized.

What are non-fungible tokens used for

There are several ways in which Non-fungible tokens prove useful and the most glaring of which is its ability to connect art and technology together to ensure that producers of arts are justifiably paid.

Apart from just being useful for artists and creators, NFTs functions effectively by conducting simplified transactions.

NFTs due to their authenticity and single-existent nature could prove quite useful in ensuring that individual’s properties are properly protected and copyright is upheld for important assets.

How do I buy NFT tokens?

A particularly catchy portion of the whole NFT buzz is its purchase mechanism.

The very first step to take in making an NFT yours is to create an account for the marketplace you intend to purchase from. On each marketplace, several tokenized items are displayed. Some of these marketplaces include Opensea, NBA top shot, and more which are all for different purposes.

After creating the account, the next step would be to fund your account and begin your purchase journey.

In most of the marketplaces, NFT items are auctioned so to purchase any NFT of choice, individuals have to simply enter into the auctions and place bids.

Why NFTs are bad for the environment

Although NFTs have been proved as an answer to the stacking problems of not getting paid enough, there has been an argument regarding the environmental impact that comes with this technology.

To put into perspective how NFTs influence the environment, just imagine how much energy it would take to complete over 70,000 credit card transactions. That is how much energy a single Ethereum transaction requires.
NFTs are particularly implicated in this massive energy consumption as Ethereum is a typical blockchain platform through which NFTs function. Minting an NFT on the Ethereum blockchain consumes about 330kWh.

Constant energy generation in relation to NFTs is due to the fact that the nodes compute the same transactions over again. The constant energy drive NFTs particularly go through is due to what miners stand to gain from actively trying to generate these cryptocurrencies.

Effects of this constant energy power consumption could gradually become overbearing and this leads to an increase in global warming and an increase in the average temperature.

The impact of NFTs for artists is quite bright but for the environment, not so. It remains to be seen if certain measures could be taken to reduce the impact of this technology on the natural environment.

Do NFTs use Bitcoin?

Non-fungible tokens principally function on the Ethereum blockchain but they also gain support from other blockchains.

NFTs supporting the meme set up for longevity as an art form

Memes are like connectors to all art forms as they could be either artwork, texts, or even videos. Memes are able to generate a lot of pull as some may be quite humorous and fun to have while being shared around easily. As a meme continually grows and is appreciated on numerous platforms, its commercial value grows as well and it could become monetized.

Seeing how popular memes like Nyan Cat could be in a really short period, it may not come as a surprise the reasons why minting memes as NFTs could become a trend.

Minting memes as NFTs simply means making memes a part of the Ethereum blockchain hence giving them an authenticity and making them noninterchangeable.

Memes are not just a new development in the entertainment space, they have been around for quite a while so the introduction of NFTs simply made this already existing space one capable of generating money. Most of the minted NFTs that are available and circulating around are old and already popular ones but the introduction of NFTs certainly made sure that memes become marketable and authentic.

A reason why NFTs are primarily like support systems to how memes would operate especially in income generation and uniqueness is in NFT’s unique platform-agnostic feature. This feature means that even when a single meme is placed on different platforms, they still maintain their unique and authentic nature through a sort of certificate of authenticity. The meme through an NFT is linked to its original owner and every action performed on the meme is recorded on the  NFT’s sector on the blockchain platform that supports it.

Apart from memes benefiting from the platform-agnostic nature of NFTs, they also actively function to ensure copyright protection and prevent minting memes that belong to other people. The introduction of NFTs means that individuals who fail to cite the authority behind certain memes could be excluded from the NFT chain and they would lose out on the financial benefits the meme may accrue. Being platform-agnostic would also make this process fairly easy to handle across different platforms.

Another aspect through which NFTs could aid meme sustainability and monetization is through splits. Splits help distribution of financial proceeds from memes to the different contributors involved in its production. Splits ensure that each time a meme generates money from its usage, contributors get paid.

Social Tokens – Bridging gaps between creators and consumers while providing financial incentives. 

Social tokens are specialized tokens created by creators to ensure that they give their loyal followers incentives for their loyalty as well as ensure that they get rewarded for the content they put out there.

Creators like Connie digital created the HUE – the very first social token. It was handed out to customers via OpenSea marketplace and this token acts to further the popularity of the brand as well as reward active customers.

Although these tokens were created to sort of creating an inner circle for close followers of a brand, they can also be used as a means to get financial gratification for clients. An example is seen with Alex Masmej, a 23-year-old who through $ALEX was able to literally tokenize himself and through this raised high-profile sales of up to $20,000. Fans could purchase a bit of this social token and could hence have the power to vote on daily decisions he makes in his life. Also, as the coin continues to gain value and attractiveness, users are also able to still get financial incentives as a result of the social tokens.

The steps taken by Alex Masmej in tokenizing himself sort of creates a new path for creators to get up close and personal with their clients.

Some introduced social tokens are currently making waves in this space and some of them include;

• $WHALE Social token – This token was created by whale shark and has nothing but excelled since then as it has been able raise $2M worth of assets to back up the tokens. Purchase of this token allows users to have access to rare NFTs from a storage vault and these tokens are backed up by tangible assets like digital arts.
• $FWB – FWB literally stands for friends with benefits and is a group of crypto-enthusiasts with an aim to take a full advantage of the Web3 technology. Web3 represents decentralized apps that run on blockchain technology and changes made on tokens associated with such apps is able to reflect all around. FWB contains participants like musicians, developers, writers, and more who are able to offer several channels for dishing out rare and unique content.
• $JAMM – This space has over 250 token holders and roughly $304K market capital. It is a community of crypto-natives trying to filter out all the noise and get the very best choices. These members receive financial incentives for their contributions to the community. The incentives breed innovation and leads to further growth of the community.

As with every working system, there is always a list of parts and sectors actively working together and with social tokens, it is actually no different. From the issuers who provide the tokens to the professionals who regulate everything social token to provide a fine balance, everyone plays a major role to ensure that users get the best out of this space.

The first set of participants are well-known issuers who readily provide social tokens to participants and also function to share financial incentives for participants and owners of such tokens. Some of these issuers include Roll which has helped about 200 creators issue a social token in the past year.

Rally which focuses through a custom layer two solutions that provides an extra added layer from blockchains to make transaction speed and the barriers that may be provided by the weight of normal currencies.

MeTokens which allows users to creators to have their very own tokens called meToken and upon each token, there are several binding rules and Calaxy is also one to consider in self tokenization of celebrities or high profile individuals with an aim to grant them a more personal touch with their followers.

Next, we have tools that are practically responsible for governance, communication, and collaboration between token holders. Some of these tools include CollabLand, Snapshot, Gnosis safe, Unite, DFame, and more.

Finally, we have the professionals who are responsible for the production of these tokens as well as constantly trying out the best ways to effectively utilize these tokens. Some of these professionals include; Social Token Agency, Seed Club and KERNEL.

Takeaway – In recent times, there has been an undeniable surge in the demand for NFTs and this has been due to several reasons ranging from a search for equitable pay to that of just exploration.

Either way, NFTs have certainly been embraced and social tokens may also follow this trend.

There have also been big hitters in social tokens and with some already established NFT users crossing over to social tokens, we can also expect social tokens to follow the same curve.

NFTs Slowing Down – A Mere Facade? 

It is a common argument against NFTs that they have experienced an early rise, we could expect them to dip in coming years and that an investment in NFTs is bound to fail. This is really not the case because NFTs are composed of a large body of investments and saying they could potentially fail due to the dip a segment of it experiences is a little far-fetched.

Crypto arts and collectibles are usually implicated when it comes to talking about NFT dips but the NFT space is made of way more than this and the remaining aspects of it continue to bloom as in the month of June, OpenSea recorded its highest ever NFT record of sales and purchase.

Exploring more ways to utilize the flexible NFT space through the invigorated NFT Avatars

Another aspect of NFTs which is currently thriving is NFT avatars. This concept involves avatar collectibles that allow individuals to tokenize themselves on the internet. It has experienced quite a surge in 2021 as it recorded a $600 million raise in investments in the first part of 2021 and a further $350 million raised already in the second quarter of 2021.

Summary of News Making Events Regarding NFTs 

Memes being a quite popular art form ranging from texts to arts or even videos has definitely placed some perspective on just how flexibly NFTs could be used.
Through minting of memes on the ethereum blockchain, the platform-agnostic feature of NFTs shines through making tracking memes an active and efficient endeavor. Splits also ensure that financial incentives are properly shared between contributors of memes.
Minted memes is something we should expect to see more of in coming times.

Social tokens which connect important figures to their fans in much closer terms are becoming a real deal and could be a gold mine even. The $Whale social token has already shown that money is there to be made from social tokens and to further back up this claim of social tokens being one to watch out for, Big hitters in the NFT space are crossing over to the use of social tokens.

It is commonly said that NFTs are on a slippery slope and the only way is down for them but this idea may just not be right. When we consider the NFT space as a small and limited one, yes this idea may be right but if we consider how much variations can be attained with the use of NFTs, we can be sure that this space would constantly be supported by other booming aspects.

NFT avatars where individuals sort of tokenize themselves is also quite something to watch out for as in the second half of 2021, this space has already recorded a $350 million raise. The only way here is up.