NFT supporters are calm about Crypto Crash

Anyone who thinks that the decline in NFT valuations in the wake of cryptocurrencies will dampen the enthusiasm of supporters of these “non-fungible tokens” will have to think again. Because for the defenders, in the media and technology sectors, of these unique digital tokens, registered in the blockchain and automatically executing contracts (“smart contracts”), they have lost none of their revolutionary potential.

At worst, for them, the analogy to the 2000 Internet bubble is essential: its bursting caused the loss of a lot of money, but freed the market. Analyst Benedict Evans sums up this reasoning well. : “All technology knows its winter and all financial innovation its bubble (and its scams), then its collapse. NFTs are both and suffer from both. That doesn’t mean they won’t exist, but 99% of the first wave won’t survive. “

Non-salable NFTs

Small consolation for those who have lost a lot, of course. Bloomberg notes that even high-profile collections like Bored Ape Yacht Club characters have declined in value (about 30%) more than bitcoin itself. NFT trading volumes plummeted. The NFT platform launched by Coinbase went bankrupt when it was opened.

However, as Joël Hazan, a specialist in these issues at BCG explains, “NFT prices hold up well in cryptocurrencies”. Then, in April, the big takings had gone up a lot and some are already starting to rebound.

But above all, as explained by Frédéric Montagnon, co-founder of Arianee, who helps brands to exploit NFTs, “first of all, the data of the NFT market are questionable, because there is still no authentic aggregation, and moreover, many NFTs not only do not trade like in the casino, but they are not even for sale, for example the certificates of authenticity for watches ”.

Renew crowdfunding

For pro-NFTs, declining ratings don’t particularly question their interest in community management – they allow musicians or brands to control access to online experiences. NFTs are also the foundation of “playing to make money” in the world of virtual games as an exploitable property right, notes Joël Hazan. They are also indicators of identity in the online world where we spend more and more time, hence the virtual Nikes attached to NFTs.

Gilles Gaillard, co-founder of N9NE Studio and Mikros (“Asterix”) has no doubts about their interest in his field: animation. “Fictional NFT funding projects like ‘Plush’ or ‘Stoner Cats’ have convinced me despite the current turmoil in the markets,” he explains. In these cases, NFTs have both a use value, that of creating an emotional bond through opportunities for participation in projects, access to backstage or previews, etc., but also an overturning value of the financial logic of the sector. Through the participation in the profits of the project allowed by the NFT, the fan provides capital, which replaces the third party loan to be repaid. Their secure, fast and elaborate contracts renew crowdfunding potential, explains Joël Hazan.

The future of personal data

For Frédéric Montagnon, NFTs have an even more fundamental transformative power. “They allow you to control your social network and are the future of personal data that will no longer belong to intermediaries like Twitter or Facebook,” he explains. Brands know that it is through these “tokens” that they will communicate with their consumers. “

However, two NFT trades in sight in the past few days show the way to go by then. The virtual lands of Yuga Labs’ “Otherside” metaverse have experienced an unexpected spike in the cost of validating blockchain records due to the influx of requests. Even more problematic, one of the pseudo-designers of Azuki’s character collection had to admit that he had, in the past, abandoned the projects right after their speculative flight phase.

In addition to the specific energy consumption of the blockchain, the NFT universe is in fact riddled with scams, in particular the “wash trading” through which small groups organize themselves to raise prices by creating buzz, even at the cost of buying NFTs first. of everything, before letting the mass of speculators suffer the losses. Even the real property rights of NFTs, their inviolability against hacking, etc. they need to be better established, experts say. Without these reforms, it is difficult to see how NFTs could achieve their bright future.

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