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Meta, which recently announced integration of non-fungible tokens (NFTs) into both Facebook and Instagram, may be a little bit late to the whole NFT game. The market for NFTs started to collapse earlier this year, and this past summer, the slowdown has been especially dramatic. It’s gotten to the point where some of the most popular marketplaces for buying and selling NFTs have turned into ghost towns. On OpenSea, for example, daily transaction volume is down 99% over the past 90 days. There is literally nobody buying and selling NFTs.
The current NFT market outlook
Of course, there are two sides to every story. One side of the story says that NFTs are over. The idea that America had somehow turned into a nation of digital art collectors was hopelessly optimistic at best. At the end of the day, Americans weren’t really collecting art — they were simply participating in the latest Internet get-rich-quick scheme. They were lured into a scheme in which they were rapidly flipping pieces of digital art and becoming rich in the process.
The other side of the story, though, is that Summer 2022 simply marks the ending of the first phase of the NFT craze. Now that companies like Meta are getting into the game, we could see the next great phase of the NFT collecting boom. According to this storyline, NFTs are central to the development of the metaverse and are not going away. We are not so much investing in digital art, as we are collecting digital avatars for use in other online experiences.
MTV and the metaverse
Take the example of the MTV Video Music Awards, for instance. For the first time ever, MTV handed out an award for “best performance in the metaverse,” and the awards show featured a collaboration between Eminem and Snoop Dogg, in which they appeared as avatars from the Bored Ape Yacht Club NFT collection. Instead of seeing two real-world performers on stage, viewers were treated to a singing and dancing performance of two digital Bored Apes. Depending on how you feel about NFTs, this was either the greatest thing ever or, as one fan called it, “a dollar tree version of a Gorillaz music video.”
The new NFT, better than the old NFT
If you listen to crypto enthusiasts, the new wave of NFTs will focus on “utility.” This is a polite way of saying that the new NFTs being cooked up will actually let you do something or gain access to something online. If you think about it, that’s really the purpose of the Bored Ape Yacht Club. By spending tens of thousands of dollars to acquire a Bored Ape, you were doing more than just “flexing” online. You were also becoming a member of a private, VIP community. You suddenly had access to a special private club online, as well as access to special VIP experiences. The next wave of NFTs will go even further, because they will fully leverage blockchain technology to build in additional perks and privileges.
What’s the social media play?
As a digital marketer, there’s no going back. The genie is already out of the bottle. Now that Facebook and Instagram are part of the game, there’s no more standing on the sidelines. You don’t have to launch your own NFT collections, as some high-profile brands have done, but you do have to recognize that the worlds of augmented reality, virtual reality and blockchain technology are starting to mix together in strange new ways. NFTs challenge the whole notion of digital identity online. People are looking for new ways to hang out online, and one way is by assuming the appearance of a digital avatar.