Looking back on the performance of global financial markets in 2021, in addition to the poor performance of the US Dow Jones, NASDAQ, and FTSE 100, the Hang Seng Index, Nikkei 225, and gold market are also equally on a downturn. In contrast, most cryptocurrencies such as Bitcoin and Ethereum have risen several times or even dozens of times. Among them, the dark horse worth mentioning is undoubtedly NFTs. From the change of transaction volume of the NFT market in 2021 alone, according to the statistics of the nonfungible website, the daily average trading volume of the NFT market recorded in the first week of last year is just over $2 million. At the peak trading period in August, the average daily trading volume quickly climbed to more than $50 million, of which the highest single-day trading volume of $1.79 billion was recorded on August 29, an increase of nearly 800 times compared to the average daily trading volume at the beginning of the year. Although the NFT market has experienced a downturn since then, it began to warm up again in the fourth quarter of 2021, both in terms of the activity of the trading market and the investment enthusiasm in the capital market. Still taking the average daily trading volume as an example, after falling to less than $20 million in the third quarter of last year, the data shows that it has successfully returned to above $50 million recently, which is obviously a positive sign.
Trend change of the trading volume of NFT market since 2017. (Source: nonfungible)
In the Collins Dictionary’s “Word of The Year” in the past year, NFT beat a series of shortlisted words, including metaverse, hybrid working, and so on, to the top of the list in 2021. When referring to the prosperity of NFT transactions in the secondary market, we must mention the performance of NFT-based leading tokens in 2021, such as ENS, AXS, MANA, ENJ, etc. NFT conceptual tokens debuted on the MEXC platform have increased tens or hundreds of times in the past year. While bringing great profits to investors of the MEXC platform, it also greatly improves the reputation of MEXC. Many high-quality potential tokens tend to be launched one month or more ahead of schedule on the MEXC platform before being listed on Binance and Coinbase, leaving enough time for value investors to lay out.
Next, let’s talk about the impact of the rise of NFT on the entire crypto world. If the advent of Bitcoin opens a window into the world of crypto and blockchains for people in the traditional world, then the rise of the NFT boom could be counted as opening a whole new door beyond it. Due to NFT’s unique technical highlights, they naturally have the advantages of being able to ingeniously combine with many fields such as art, IP creation, and value confirmation. This is also the important reason why we have seen multinational giants from different fields such as Nike, Marvel, NBA, Porsche, Lamborghini choose to enter the NFT world. By using NFT technology to create their own digital collection trading platform or issue the best digital collection, we can further close the distance between the brand and users, improve user loyalty, and ultimately achieve the goal of increasing brand influence to occupy the frontier market.
Of course, for the current NFT market, the main battlefield remains in the art collection field. In March 2021, a collage of digital pictures by digital artist Beeple,’ Everydays: The First 5000 Days’, was sold for $69 million at Christie’s, the world’s top auction house, setting the highest auction record for digital artwork. As the top exchange in the crypto industry, MEXC also follows the trend of NFT development. For example, conceptual items such as NFT, Chain Games, DAO, Web3 have been deeply laid out as early as 2020, and eventually, a concentrated outbreak occurred in 2021. Based on the subdivision of the track, in the second half of 2021, the new assets launched by MEXC cover 24 sub-areas. Among them, 38% are major projects involving NFT (NFT, GameFi, Metaverse), and the top 10 gainers among crypto assets in 2021, 6 of them debuted on MEXC, including GALA and MANA, which gained 47,854% and 6,483%, respectively after they were listed.
Next, let’s take a brief and concise look at MEXC’s first-mover advantage and enrichment effect in the field of NFT in the form of a table with 3 representative projects: GALA, MANA, and FLOW.
From the table above, it is easy to see that MEXC is at least 3 months ahead of Binance in listing potential projects such as GALA, MANA, and FLOW, providing more space for profit and opportunities for MEXC users. If the opportunity cost is considered, users of the MEXC Global platform get more profit in advance than users of other platforms such as Binance. This gives you a glimpse of the uniqueness and long-term vision of MEXC Global in discovering high-quality projects.
Returning to the structure of the NFT community, with the help of the open and equal environment of blockchains and the strength of the community, more ordinary people with dreams and abilities have gained more attention. For example, in September 2021, “Zombie Zoo Keeper,” an 8-year-old kid from Japan, released the Zombie Zoo series of works created by him on the OpenSea platform, with two sales of up to 18 ETH, which was worth about $60,000 at the time.
Finally, there is another important kind of participant in the NFT market that must be mentioned: celebrities with their own traffic halo. Although from the perspective of IP, these celebrities are no different from many multinational brands mentioned above, from the perspective of practical influence, these celebrities who join the game have a much greater effect on breaking into the NFT circle. For example, The Weeknd, a Canadian singer who has won three Grammy Awards, and Pelé, a famous Brazilian footballer, will undoubtedly trigger a rush to buy NFTs when their fans hear the latest developments and the release of NFTs by these world-famous stars. There is also the well-known basketball player Yao Ming, has launched a new wine brand “THE CHOP” and a limited edition NFT collection at his winery “YAO Family”, which is the first winery in the world to be auctioned with an NFT digital collection. Each NFT corresponds to a bottle of THE CHOP wine with a certificate of authenticity signed by Yao Ming. In addition to expanding their influence to a broader group, the contributions of celebrities to the NFT and crypto market are gradually proving the feasibility of a diversified business model at a deeper level.
This is the clue to further explore the deeper meaning behind NFT. For many people, in the future metaverse, NFTs will become the access card of the community or the symbol of digital citizenship in the virtual world. In the NFT community, only those with specific NFT will be accepted by the community and get a sense of existence in the community. A typical example of this is the Avatar boom represented by the rare NFT auction of CryptoPunks, Bored Apes, and Meebits. In one well-known example, NBA star Stephen Curry bought an NFT ape for 55 ETHs, then changed his Twitter avatar to the NFT piece. After Curry’s purchase, the ape’s floor price rose from 16 ETHs to 24.99 ETHs in 21 days, increasing up to 56%, again demonstrating the power of celebrities.
From another perspective, with the development of the NFT market growing deeper, it has also won more and more attention from the capital market. According to AirTable, there have been 313 funding events in the NFT market since 2018, totaling $4.955 billionAmong them, there were only 12 cases between 2018 and 2020, a total of 284 in 2021, and 17 funding cases were completed in less than a month in 2022.
Overview of NFT market funding events (Source: Airtable)
The above 313 funding projects cover infrastructure, music, art, trading platforms, games, sports, and many other segments. The largest funding took place on September 21 last year — a $680 million investment in Sorare, a chain game project from France, was led by SoftBank, followed by Rio Gavin Ferdinand, LionTree, Institutional Venture Partners, and other institutions. In addition, on July 19, OpenSea, NFT’s largest trading platform, completed a $100 million Series B led by Andreessen Horowitz (a16z), with a post-investment value of $1.5 billion.
From the above events happening in the NFT market, it is not difficult to find a trend that in the future, the full digitization of human society has become an irresistible trend, just like the metaverse that we are now discussing enthusiastically. Although it is yet to paint a precise picture of what it will be like, it is believed that it will arrive. In this process, NFT will become a very important part of asset digitalization because it is becoming an application with high popularity on the blockchain, which is a digital asset that everyone can understand, and an effective means to realize clear value ownership. It is easier to understand than those various coins and tokens. Thus, more people will participate. More importantly, NFT assets can greatly reduce the threshold for members of the traditional world to understand the crypto world and greatly expand the traffic of the crypto world or the metaverse. In comparison, the role that NFT can play is no less than that of Bitcoin.