- Some NFTs have fetched sky-high prices over the last year, though the market has cooled recently.
- Crypto.com exec Joe Conyers III says NFTs are “still risky,” but the space brims with innovation.
- He says moving forward storylines will be more important and utility NFTs will get more complex.
Joe Conyers III, the global head of Crypto.com’s NFT division, bubbles with enthusiasm when he talks about Profile Picture (or PFP) NFTs: pieces of digital artwork with unique, randomly generated traits and attributes that are frequently used as profile pictures on social-media sites.
Over the last year, PFP projects like Bored Ape Yacht Club and Crypto Punks have fetched astronomical prices, with one rare CryptoPunk selling for the equivalent of $23.7 million in February.
But Conyers believes PFP NFTs have more untapped potential.
“I think we’re moving from this first era of entities into the next era,” Conyers III said.
Conyers III, a music industry veteran with a decade of experience, joined the cryptocurrency exchange Crypto.com as global head of NFT about a year ago to lead development of its invite-only NFT platform, which currently allows approved users to to create, sell, and purchase NFTs. In that time, he’s observed an explosion in mass adoption of NFTs, which racked up $14.1 billion in sales in 2021, according to NonFungible.com.
Artists like Mike Winkelmann, the digital artist known as Beeple, saw their work handsomely rewarded. (Winkelmann sold one of his works in March 2021 for $69 million at the auction house Christie’s.) Many in the tech community became avid collectors and sellers as well, with Twitter founder Jack Dorsey selling his first tweet, which launched the social-media platform, as an NFT for $2.9 million. And Hollywood, which historically has been slow to adopt cutting-edge technology, saw studios and stars, from Warner Bros. and “The Matrix: Resurrections” to “Law and Order” producer Dick Wolf, promote or launch NFTs of their own.
But the NFT market has cooled recently. The average selling price of an NFT fell from an all-time high of $6,900 in early January to $2,000 by the end of March, according to NonFungible.com. And for every successful NFT creator, there are cautionary tales. NFTs from the likes of Logan Paul, Grimes, and A$AP Rocky, have seen their valuations decline since launch.
Other projects have been outright failures. NBA player and Sacramento Kings point guard De’Aaron King, for instance, scrapped his NFT collection “Swipa The Fox” just one month after the collection launched this January, partly due to dissatisfaction with the collection’s execution, which King delegated to several NFT partners.
And a blockchain last week powering the NFT game Axie Infinity was hacked, leading to more than $600 million in cryptocurrency being stolen.
“NFTs are still risky,” said Conyers III, referring to the Axie Infinity hack. “When you’re doing stuff at the edge, it can be risky. This is a new space, and it is a stressful space to some. And because it’s new, there aren’t any established rules — the norms are being decided now.”
But Conyers III thinks the market for NFTs is only in its initial phase, and that there is much more growth to come.
Here are three ways Conyers III thinks NFTs will evolve in the near future:
1. Storylines will become more important
“NFTs can’t just be pieces that don’t have a story behind them that are just, you know, ‘I made cool art,'” Conyers III said. “That used to work in Q2 of last year, but the NFT has to have a serious provenance, a serious story, and a serious artist behind these things.”
He pointed to several NFT collections being sold on Crypto.com, for instance, that are placing a heavy emphasis also on having narratives. The AlphaBot Society, a recently launched NFT collection, pushes a futuristic, sci-fi-driven plot. Meanwhile, an upcoming collection of animated NFTs called The Trip, which will be sold starting April 22, promises NFT buyers will be able to “join the trip of a lifetime.”
2. Utility NFTs will get more sophisticated
Conyers III believes utility NFTs — those that offer additional digital and physical perks — will also become much more common and more sophisticated than the utility NFTs dropping onto the market today.
He gave the example of the NFT collector and musician Steve Aoki, who has been particularly active over the last 18 months, selling his “hairy” NFT in 2021 for $888,888 , auctioning off an NFT collaboration through Sotheby’s, and launching the A0K1VERSE, a new NFT membership and metaverse platform that gives NFT holders access to private events, concert tickets, early NFT releases, and free apparel.
But Conyers III said utility NFTs have the potential become more useful in the future, as well.
“The whole market is shifting towards more sophisticated tokenomics, where you are providing a utility token alongside your NFTs … meaning there’s a huge utility where you can use it in a game or play to earn so they can get more things in a game,” Conyers III said.
3. A new class of NFT collector will emerge
Conyers III also predicted a new class of NFT collector would emerge: collectors known for carefully studying, purchasing, and holding onto their NFTs much in the same way a traditional art collector would.
“In the same way that you maybe got recognized as being a good art collector who didn’t flip it at Christie’s the second you could, you would hold on to it and you donate it through a museum maybe,” Conyers III said. “There are groups of collectors who are earning reputations for who’s in them, their actions, and what they do. Are they willing to spend the time to make these projects better? And so I think you’re seeing a new class of collectors that are being valued not just for their money, but for their ability to influence and help unlock real opportunities for some of these projects, as well.”
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