WHAT’S NFT MARKET PLACE AND WHY HAS IT COLLAPSED?

WHAT'S NFT MARKET PLACE AND WHY HAS IT COLLAPSED?

With the growing span of technology, more and more new technology-based applications are emerging every single day. Blockchain is a new-age technology that is vastly used in digital currency making. Apart from this, digital currency or cryptocurrency blockchain is being used in various fields. Trading and assets are also a part of the blockchain. More people are involved in digital trading every day; people create, sell, and buy digital assets. Digital art is getting popular day by day. The non-fungible token or NFT has become a new trend of this era. NFT marketplace is the place for buyers and sellers of these digital assets.

NFT marketplace
NFT marketplace

What is the NFT marketplace?

Like other physical markets, the marketplace for NFTis also a market, and the only difference is that it is a digital marketplace. Using NFT crypto, anyone can buy or sell any Digital Assets or NFT tokens here. This marketplace is also used to store, display, or show trading and create NFT tokens or any digital assets

 NFT are the virtual or digital tokens of artwork, games, soundtrack, or any artistic creation, with their ownership and authenticity information. These tokens or digital assets can be sold or bought in the NFT marketplace. NFT crypto is the cryptocurrencies that are used in the transaction of buying and selling digital assets.

Why is the NFT Marketplace so important?

Below are some of the essential aspects of the NFT marketplace:

Limitless Expansion:

The NFT market is a massive digital pool that comprises huge transactions happening in this market daily. To access this marketplace and to buy or sell anything they want to. It is probably the future of the digital market.

Non-traceable:

As NFT markets are virtual places, it has no physical presence. This makes them practically non-traceable. To make any transaction in this market, a person must need digital money. And crypto wallet is the place where a person gets and stores their digital money. In the future, when the use case of NFTs increases, it will automatically drive the crypto market to new heights.

Easily Compatible 

At present, there are many digital platforms. People need to choose a crypto wallet compatible with the blockchain network system. Different platforms support different crypto wallets. To buy or sell any digital asset on an Ethereum-based platform, one needs to use a crypto wallet that is compatible with it, like MetaMask, and then they can easily use the NFT marketplace.

Amazing Usability:

A Crypto wallet is just a place where a person can store cryptocurrencies. So, several coins need to be in the wallet to make transactions here. One needs to pre-fund the crypto wallet before buying, listing, or minting any NFT. One needs to buy some cryptocurrency supported by the NFT markets where they wish to make any transaction. For example, a person needs to purchase some Ethereum stored in an Ethereum-based crypto wallet to complete a transaction on the Ethereum-based marketplace.

User Authorization:

Without a user account, a person cannot make their buy or sell transaction on the NFT marketplace. Setting up an account is necessary, which will also ensure authenticity and authorization in the market.

Easily usable: 

The working function of the NFT marketplace is straightforward. By following the given steps, one can easily understand the operational process of the NFT marketplace, and they also can make their transition in the market.

1. Sign in:

Well, every NFT marketplace has its signing-up procedure, but the main steps always remain. One needs to make an account, and then they need to connect their account with their crypto wallet by giving the correct password of the wallet. Creating a new account button typically stays on the right-hand corner of most of the NFT marketplace home page.

2. Buy:

Here, an NFT can be bought in an auction. A prospective buyer can also submit their offer to the owner of the NFT for negotiating for a better price.

3. Sell:

One can sell their NFTs in the auction of the marketplace, or they can also sell their creation to the buyer of their choice. Selling an NFT is a little bit more complicated than buying an NFT in the NFT marketplace. For selling, one needs to upload their digital asset to the market and select a fixed price. After that, the NFT marketplace will thoroughly inspect the piece of digital work for its authenticity check. If the NFT is authentic, only then can it be lifted in the market for sale. The marketplace itself conducts the transfer of money after the seller accepts a bid.

Variety of Collections of Nft Marketplace

Many different NFT markets are present in the digital world. Some most popular NFT markets place is:

  • Opens: This is a universal marketplace. It accepts a variety of NFTs like artwork, collectables, trading cards, or domain names.
  • Nifty Gateway: It is by far one of the largest marketplaces for NFTs. Some most famous NFT artists are present on this platform, like Beeple, Steve Aoki, and many more.
  • Foundation: This is the fastest-growing marketplace for NFTs. This is also the most popular place for NFT, and its trading volume already touched $48 million.

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NFT Market Place cools down

The market for non-fungible tokens (NFTs) collapsed last month, figures have revealed, falling steeply alongside cryptocurrencies’ recent descent.

Monthly sales volume on the largest NFT marketplace, OpenSea, plunged to $700 million in June, down from $2.6 billion in May and a far cry from January’s peak of nearly $5 billion. 

By late June the average NFT sale sunk to $412, from $1,754 at the end of April, according to NonFungible.com, which tracks sales on the Ethereum and Ronin blockchains.

“The crypto bear market has definitely had an impact on the NFT space,” said Gauthier Zuppinger, co-founder of NonFungible.com.

“We have seen so much speculation, so much hype around this kind of asset,” he added. “Now we see some sort of decrease just because people realise they will not become a millionaire in two days.”

The NFT market has collapsed along with cryptocurrencies, which are typically used to pay for the assets, at a time when central banks have jacked up rates to combat inflation, and risk appetite has withered.

Bitcoin lost around 57% in the six months of the year, while ether has dropped 71%. 

For critics, the crash confirms the folly of buying such assets, tradable blockchain-based records linked to digital files such as images or videos, often artwork.

The Malaysian businessman who bought an NFT of Jack Dorsey’s first tweet for $2.5 million last year struggled to get bids of more than a few thousand dollars when he tried to re-sell it in April.

But Benoit Bosc, global head of product at crypto trading firm GSR, sees the downturn as the perfect time to build a corporate NFT collection – the crypto equivalent of the fine art traditional banks display to impress clients.

Last month, GSR spent $500,000 on NFTs from what Bosc calls “blue-chip” collections – those with large online fan bases.

His purchases include an NFT from the Bored Ape Yacht Club, a set of 10,000 cartoon monkeys made by US-based company Yuga Labs and promoted by the likes of Paris Hilton and Jimmy Fallon. 

Such is the hype surrounding Bored Apes that Yuga Labs raised $285 million in April by selling tokens it says can be exchanged for land in a Bored Apes-themed virtual world it has not yet launched.

Yet the average sale price for a Bored Ape tumbled to around $110,000 in June, having halved since its January peak of $238,000, according to market tracker CryptoSlam.

In his New York office, Bosc put up three screens on which to display his NFTs, which include various pixelated characters and a Bored Ape bought for $125,000.

“For us, it’s also a brand exercise,” Bosc said. Owning a valuable NFT and using it as a profile picture on social media is a way to establish “respectability, authority and influence” in the crypto sphere, he said.

Nonetheless, the future of NFTs is distinctly uncertain, as the era of low-interest rates which encouraged investors to take risky bets comes to an end.

Some market watchers say the influence of NFTs on the art market will shrink. Meanwhile, even though the much-hyped vision for a blockchain-based metaverse hasn’t materialized yet, enthusiasts expect NFTs to shake up the gaming industry, for example by allowing players to own in-game assets such as avatar skins.

“Everyone believes games are going to be the next big thing in blockchain,” said Modesta Masoit, chief financial officer at blockchain tracker DappRadar.

This risky combination of gaming and financial speculation may face difficulties, though. Most gamers prefer games that do not include NFTs or “play-to-earn” components, according to John Egan, CEO of technology research firm L’Atelier.

Although the groundbreaking new crypto regulations agreed by the European Union last week mostly excluded NFTs, Spain is separately seeking to clamp down on the way video games sell virtual assets for real money.

Meanwhile, the biggest NFT-based game, Axie Infinity, has seen its in-game token collapse to less than half a cent, down from a peak of 36 cents last year.

For L’Atelier’s Egan, the NFT market is unlikely to recover in its current form.

“Ultimately it’s a situation where extraordinary amounts of money are being paid for extraordinarily limited assets that don’t really produce any cash flow,” he said.

But the underlying concept of creating unique digital assets is still “fundamentally important” and will have “massive applications” for the financial sector in the future, he said.

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