The NFT market topped $40 billion dollars in 2021, with the most expensive NFT selling for nearly $532 million. OpenSea receives over one million individuals in traffic every single day, and we are only at the beginning of an emerging market.
The market cap of metaverse tokens in January 6, 2022 was $34.7 billion dollars. Epic games raised $1 billion dollars for metaverse, Meta (formerly Facebook) invested $10 billion dollars in their metaverse, and Microsoft’s contract for mixed reality was valued at $22 billion dollars. The global metaverse market is expected to expand at a 41.7% compound annual growth rate from 2021 to 2030.
The number of users is growing worldwide, and China is the largest AR/VR spender in the world (see below).
With the increasing market capitalization of Metaverse projects and the increasing adoption of augmented and virtual reality technologies worldwide, the outlook for the Metaverse is bright. NFT utilities will continue to evolve and become integral to life in the real-world. Along with the Metaverse, NFT integration in the real-world will open new opportunities for innovation. Our project will be at the forefront of this emerging industry alongside giants such as Star Atlas and Illuvium.
The total value locked (TVL) of cryptocurrency in DeFi topped at $100 billion dollars in 2021 and is currently sitting just above $80 billion dollars today. Many NFT projects are moving beyond the concept of profile pictures and beginning to innovate in NFT-driven aspects of decentralized finance, which we are coining NFTfi. These projects tend to distribute tokens to their users which can be traded on the secondary market via a centralized or decentralized exchange. Typical vehicles of token distribution include airdrops, staking, and earning in-game rewards, whereby owning and utilizing an NFT in some way enables a holder to earn the token. These projects often create economic incentives to encourage token holding or burning by enabling token holders to exchange their tokens for other products or services. Other economic incentives include staking of the token itself, the creation of liquidity pools and collection of swapping fees, and dual-asset yield farming. These sorts of incentives are commonly referred to as utility.
Whether NFTs can be a passive income vehicle is an interesting question, because many tokenomics models rely on money flowing in from investors for the initial investors to make a profit. For example, some models that have been employed to drive an inflow of capital successfully include the use of royalties from secondary NFTs sales to buy-back and burn the project’s NFT or token, as well as the use of mint funds to develop technologies that can then be used to generate revenue for the holders. This latter model is especially applicable to game-centered projects, where the fees involved with playing the game can be redistributed to the holders and developers. Recently, we are also seeing cross-industry revenue generating opportunities also being established from mint funds (i.e. solar-powered mining rig set-ups, youtube channels, energy drinks) and used to generate passive income for its users.