Interpretation of the development status and trends of the NFT market

Non-fungible tokens (NFTs) have come a long way and have dominated the zeitgeist over the past few years. Mainstream focus has been on personal NFT avatar (PFP) projects, thanks to the growing interest (and value) of CryptoPunks and Bored Ape Yacht Club (The Bored Ape Yacht Club).

The prices of CryptoPunks and BAYC are skyrocketing…

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Triggered the craze of NFT avatars...

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These projects illustrate some of the emerging properties and behaviors enabled by NFTs. First, NFTs provide true digital ownership of unique assets. Because people are confident that they actually own these assets, they can (and often do) use them as a representation of their digital identity. Even Web2 platforms like Twitter have NFTs as profile pictures. And, just like in the physical world, these avatars generate social properties such as status signals, gated communities, social hierarchies, and other related behaviors, and ownership goes beyond the original document itself. For example, members of the Boring Ape Yacht Club own Ape's intellectual property, allowing them to use Ape to launch beer brands, comics, and even virtual bands.

Second, the programmable nature of these assets supports a wide range of use cases that are often unavailable in real-world objects. NFTs can be programmed to respond to actions taken by the owner, to external triggers, or to change over time. They can embed royalties, enabling creators to participate in future earnings with their communities. And because all of this happens on the blockchain, creators can identify and reward owners with airdrops or early access to future projects.

All of these features combined can set off a virtuous cycle where community members create value from grassroots initiatives, driving demand for their assets, providing creators with higher income through sales royalties, which they can use to further expand the scope of their projects.

In fact, PFP (Picture Profile) has been at the forefront of NFT adoption and experimentation and is by far the largest NFT vertical. But beyond them, there has been a Cambrian explosion of NFT experiments, including generative art, irreplaceable virtual worlds, interactive NFTs, different forms of media (such as NFTs), the financialization of NFTs, and more.

NFT market cap by category
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At Amber, we believe that the metaverse — a loosely defined concept that refers to real-time, interoperable, and immersive digital experiences — is inevitable, and that NFTs are a key primitive for these virtual worlds. In this report, we talk about some interesting projects that have innovated in what NFTs can do, as well as the tools and frameworks readers can use to navigate the growing NFT space. Due to the large and rapidly growing NFT projects across multiple blockchains, we mainly focus on Ethereum-based projects.

land grab
A key question in the emerging metaverse is: Where will the users be? Virtual land sales on many platforms have risen over the past year as people flock to spaces that have people congregating. Perhaps the two biggest beneficiaries of this virtual land craze are Decentraland and Sandbox, both free-to-play platforms with limited amounts of tokenized land.