The following opinion piece was written by Lila Xu, CEO at VIMworld.
VIMworld is a revolutionary non-fungible token (NFT) ecosystem that creates a space where entrepreneurship and play combine and thrive. At the core of VIMworld are VIMs themselves, each one unique and permanent. VIMs are Smart NFTs that will deliver an immutable system of authentication, allowing their owners to both store and build value through play whilst building meaningful connections with others.
Non-fungible tokens (NFTs) are unique, non-interchangeable and non-hackable digital tokens powered by public blockchains. There have been many attempts to bring NFTs to the real world, especially in the domain of arts, entertainment and collectibles. What has become clear is that achieving mass adoption is not a simple task. Only when effectively applied and integrated with real-world applications will this technology trigger the landslide of disruption forecast across many industries.
Since the first NFT project surfaced in 2017, the market for digital assets has witnessed parabolic growth. The release of the ERC721 token standard in early 2018 further fuelled the precipitous rise of NFT tech, providing developers with the tools to more easily build new products. In 2021, the NFT market continued to exceed expectations with analyses showing between 1785% and 2100% growth in the first three months of 2021 alone, totaling more than US$2 billion spent on NFT collectibles.
Forecasts for 2021 continue to look extremely positive for the emerging market, already valued at $20 billion higher than 2020. The hyper-growth rate of this asset class is reminiscent of several notable market events. For example, the NASDAQ’s dot-com stocks in the 1990s witnessed a 456% explosion in growth over a five-year period. More recently, an ETF for cannabis stocks grew 212% in just five months, between October 2020 and February 2021. We firmly expect the NFT market growth to exceed these periods and become comparable with Bitcoin which grew 14000% over a five-year period.
NFT: Another Bubble?
Such impressive numbers logically elicit the question: Is this growth sustainable? Are NFTs in a bubble? Well, the answer is both yes and no.
The current tranche of NFTs are mostly related to digital art, being promoted by influencers and celebrities. These high-value NFTs are often sold to collectors and speculators, often cryptocurrency enthusiasts, whose wealth has ballooned in recent years. Notably, the recent $70 million sale of a digital painting by artist Beeple and Christie’s auction house sale of a CryptoPunk NFT for $9 million created a stir in the art world and news media.
One could fairly easily argue these types of NFTs are a bubble. However, when one looks at viable future applications, it is clear that NFT technology as a whole is not in a bubble and will come to play a critical role in many industries of the future.
NFTs: Future or fad?
NFTs are capable of much more than simple certificates of ownership. We see NFTs becoming the digital souls of physical objects and toys, unleashing entirely new ways to create value for stakeholders and creating brand new entertainment markets.
Through NFTs, we are witnessing the convergence of an internet of information with an internet of value. Many aspiring teams and projects are racing into this space to immerse themselves in what promises to be the equivalent of the California Gold Rush of the digital economy. Our project, VIMworld, is one of those pioneers embracing and building this future.