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One of the key causes fueling the increased demand for digital art around the world is blockchain technology, particularly Non-Fungible Tokens (NFTs). The online art market has provided investors with new opportunities and even more lucrative investment alternatives, allowing digital art to gain traction in recent years. Non-fungible tokens (NFTs) are cryptographic assets on the blockchain that are differentiated by unique authentication codes and metadata. NFT is a cryptographic token that represents real-world items such as art, music, in-game items, and films. It is a one-of-a-kind cryptographic token that exists on the blockchain and cannot be replicated.
There are many publications that have been released in response to various questions, such as what are the primary elements driving the NFT market? What are the global dynamics of the NFT market? Who are the main players? There are many more. They mainly examine the size of the NFT market in various segments. The objective is to estimate the market’s size and growth potential across several segments: Application (Collectibles, Sports, Arts, others), End-User (Personal, Commercial) and Region (North America, Europe, Asia Pacific, Latin America, Middle East & Africa).
In 2021, the digital asset segment led the market, accounting for almost 71.0 percent of global revenue. The increased usage of NFTs by artists around the world to secure ownership of digital creations is likely to boost segment growth. Simultaneously, the increased usage of NFTs to sell digital real estate in both the actual and virtual worlds is likely to drive the growth the industry further. NFTs can also be used to buy any kind of physical asset like a house, a painting, or a car. NFTs are shown on physical items as a barcode or tag, which can be encoded and traded in place of physical items. NFTs are in high demand because they allow consumers to claim ownership of their assets and confirm their identity in the event of fraudulent activities.
The analysis below is based on the findings of multiple publications, which have been combined to give information about the NFT market and help users understand the overall market and subsegments.
It provides a thorough understanding of the market’s pulse, as well as information on important market drivers and opportunities.
The following are growth predictions based on various publications:
- According to ‘Non-Fungible Tokens Market by Offering (Business Strategy Formulation, NFT Creation, and Management, NFT Platform — Marketplace), End-user (Media and Entertainment, Gaming), Region (Americas, Europe, MEA, APAC) — Global forecast to 2027’ published by MarketsandMarkets, the global NFT market size is expected to grow from USD 3.0 billion in 2022 to USD 13.6 billion by 2027, at a Compound Annual Growth Rate (CAGR) of 35.0% from 2022 to 2027.
- Based on another publication, ‘Non-fungible Token Market Size, Share & Trends Analysis Report By Type (Physical Asset, Digital Asset), By Application (Collectibles, Art, Gaming), By End Use, By Region, And Segment Forecasts, 2022–2030’, contacted by Grand view Research, the global non-fungible token market size was valued at USD 15.54 billion in 2021 and is expected to grow at a compound annual growth rate (CAGR) of 33.9% from 2022 to 2030.
- The ‘Token Global Market Report 2022’ published by The Business Research Company, predicts that the NFT market size is expected to reach from $14.02 billion in 2021 to $82.43 billion in 2026 at a CAGR of 40.2%.
The NFT market is expected to grow at a compound annual growth rate of 33–40%.
Credits: Grand View Research
The key factors driving the NFT market growth are:
- The increasing demand for digital artworks is one of the primary factors driving the worldwide non-fungible token (NFT) market growth. Non-fungible tokens are valued among artists because they ensure the validity and uniqueness of their work’s into blockchain representation. Grimes, for example, is the most recent artist to profit from the NFT gold rush, with digital artworks worth around $6 million sold in 2021. In addition, digital artist Pak’s collection was purchased for $17 million in 2021, and digital artist Beeple’s artwork was sold for $3.5 million in 2020 through Nifty Gateway.
- The gaming industryis another important factor behind the exponential increase in demand. Enjin was one of the first big gaming firms to integrate blockchain technology into its infrastructure, releasing ENJ, a gaming cryptocurrency that is officially whitelisted for use in Japan, in 2017. Games like Axie Infinity and Splinterlands, for example, allow users to convert rare in-game assets into NFT and gain revenue. The earn blockchain gaming paradigm has proven to be a huge growth prospect for NFT. As a result, the gaming sector, notably the play-to-earn blockchain gaming model, which allows players to purchase, sell, and exchange earned in-game assets, has established itself as a big growth opportunity for NFT.
- The NFT marketplaces are another important factor for the rapid growth as they permit greater accessibility to the art world. Instead of visiting a gallery, consumers can purchase NFT artworks through internet platforms. The non-fungible token (NFT) market is being shaped by the creation of those new platforms for non-fungible tokens. Major non-fungible token companies are focusing their efforts on developing new platforms for non-fungible tokens that will provide customisable exposure through a unique premium casting scheme. For example, Tapinator, Inc., a mobile game and app developer based in the United States, stated in March 2021 that it is launching NFT500, a premium casting service and collection platform based on blue-chip NFTs.
- The use of crypto tokens directly to artworks through virtual platforms has reduce the turnaround time of purchase. A token connects a digital artwork to an NFT. The owner or artist can then establish a fair price for the NFT artworks. The key will then be handed on to the end-user as proof of ownership. Digital artists, for example, can use tokens to sell one or more limited edition NFT offers. Artists can also develop new NFT forms. Thus, the use of token has been another major factor.
The key factors leading the NFT market trend are:
- The Metaverse will a major player of NFT trend. The Metaverse is a vision of an internet-enabled virtual world in which individuals interact with digital assets using Augmented Reality (AR), Virtual Reality (VR), and Extended Reality (ER) (XR). NFTs will provide direct access to real-life identities and digital avatars into the Metaverse since the Metaverse will feature digital avatars. NFTs are planned to be employed in a wide range of metaverse applications, including user interaction, sociability, and transactions. Decentraland, for example, allows users to buy Metaverse real estate virtually and displays the locations where they own Metaverse real estate using land tokens. Industry experts also believe that NFTs can be utilized as currency in Metaverse, where they can be used for transactions, as well as the acquisition and trading of virtual digital assets like virtual property. As a result, the Metaverse is likely to be the biggest opportunity for NFTs.
- NFTs have the potential to totally alter the way films are generated, produced, and distributed in the media and entertainment sector, democratizing this monopolistic industry in the process. The NFT community Arabian Camels is producing Antara, a USD 50 million Hollywood film, to demonstrate the future of NFTs around the world. NFT is particularly beneficial to aspiring filmmakers and artists who aren’t well-known in the business. NFTs offer a unique opportunity for huge productions and exceptional film franchises with millions of fans to strengthen their support in the Metaverse. Several production companies, including Disney and Lionsgate, are already working on their own NFT marketplace. The incorporation of NFTs into the entertainment business has the potential to allow users to actively engage in all stages of film production and dissemination. NFTs will enable viewers and artists to engage beyond the screen, propelling the industry to new heights.
- One of the significant NFT market trends projected to favorably impact the industry in the forecast term is the increasing number of big brands entering the market. For example, Adidas’ “Into the Metaverse” collection, created in collaboration with NFT community Bored Ape Yacht Club and numerous crypto artists, was published in December 2021. The drop was a limited-edition digital collectible that was quickly sold out.
- Another factor promoting market growth is the money raised by NFT firms. For example, Magic Eden, an NFT marketplace, raised USD 27 million in a Series A investment in March 2022. Paradigm led the investment, which also included grants from Solana Ventures and Sequoia Capital. The funds will be used to expand the company’s services and products.
- Big corporations like Visa Inc. and Budweiser are more interested in purchasing NFTs than creating their own. Visa Inc., for example, paid roughly USD 165,000 for a CryptoPunk NFT in August 2021. This NFT has been added to Visa Inc.’s collection of historic commerce artifacts.
The key region players are:
- U.S. and Canada is expected to drive market growth in the region based on the rise in the number of artists creating digital artwork in those countries.
- North America is expected to be the largest contributor in terms of the market size in the global NFT market.
- The Asia Pacific market is predicted to grow at the fastest rate. The region’s market growth is likely to be fueled by the increasing usage of cryptocurrency in Asia Pacific countries. A rise in the number of startups in the region developing metaverse platforms is also projected to boost industry growth. Additionally, the region’s expanding gaming industry is opening up new business potential.
The end-user key segment is:
The commercial category is expected to increase at the fastest CAGR. The increasing usage of NFTs for business purposes, such as supply chain management and logistics innovation, is likely to fuel the industry forward. Companies in the logistics industry are progressively incorporating blockchain technology into their operations, opening new chances for the industry to expand.
The key application segment is:
The non-fungible token (NFT) market share growth by the collectibles segment will be significant. The growth of the segment can be attributed to the increasing demand for collectibles across arts, sports, and games. Sports collectibles, for example, allow fans to interact directly with their heroes, gaming collectibles allow players to exchange and play, and artist collectibles allow them to connect with potential clients and sell their work.
Over the forecast period, the sport segment is expected to increase steadily. NFTs are gaining popularity in the sports industry around the world since they allow sportsmen to market their identities while also increasing fan involvement.
The key NFT companies in the market are:
- Binance Services Holdings Ltd.: The company offers a wide range of non-fungible tokens such as Alien Worlds Binance Mission, Bored Pixel EN, Freaky Mandrill Ape, Legendary X Squid GAME, and The Virgin Mary. Edition 17.
- Decentraland Foundation: The company offers a wide range of non-fungible tokens such as AustinDCL Security Helmet, Blockchain Camouflage Guardian, Stick Woman, and Energy.
- Funko Inc.: The company offers non-fungible tokens such as Scooby doo X Funko, Transformers X Funko, Nickelodeon Cartoons X Funko, And Retro Comics X Funko.
- Gemini Trust Co. LLC: The company offers non-fungible tokens such as Fifty Cubes by Pak, Eardly by Trevor Jones Art, and The CryptoCartographer by Dave Pollot.
- OpenSea: The company offers non-fungible tokens such as Azuki, BEANZ Official, KIWAMI Genesis, Bored Ape Yacht Club, Doodles, and CyberBrokers.
The key vendors in the NFT market are:
Cloudflare (US), Gemini Trust (US), OpenSea (US), Semidot Infotech (US), Dapper Labs (Canada), The Sandbox (China), Axie Infinity (Vietnam), Rarible (US), Art Blocks (US), Foundation (US), Superrare (US), Mintbase (Portugal), Larva Labs (US), Appdupe (India), CryptoKitties (Canada), Sorare (France), Yellow Heart (US), Onchain Labs (China), Solanart (France), Gala Games (US)
- Non-fungible Token Market Size, Share & Trends Analysis Report By Type (Physical Asset, Digital Asset), By Application (Collectibles, Art, Gaming), By End Use, By Region, And Segment Forecasts, 2022–2030, 2022, Grand View Research, Inc.
- Non-fungible Token (NFT) Market by Application and Geography — Forecast and Analysis 2022–2026, 2022, Technavio
- Global Non-Fungible Tokens Market by Offering (Business Strategy Formulation, NFT Creation, and Management, NFT Platform — Marketplace), End-user (Media and Entertainment, Gaming), Region (Americas, Europe, MEA, APAC) — forecast to 2027, May 2022, Markets and Markets
- Non-Fungible Token Global Market Report 2022 — By Type (Art, Collectibles, Gaming, Metaverses, Sports, Utilities), By Market Type (Primary, Secondary), By Cryptocurrency Usage (ETH, DAI, MANA, SAND, REVV, MATIC, CUBE, FOAM) — Market Size, Trends, And Global Forecast 2022–2026, December 2021, The business Research company