The creators of popular collections of non-fungible tokens (NFT) are forced to look for alternative ways to monetize against the backdrop of a falling market, mastering the real sector. Such statement was recently reported by the Financial Times
More than $19 billion was spent on NFTs between January and March 2022, accounting for the majority of this year’s $36 billion in sales. Monthly spending has since fallen by more than 87%, to $442 million in November. The number of active NFT buyers and sellers has dropped to a third from its peak in January 2022. NFTs are also minted much less, and the number of new tokens on the Ethereum blockchain has dropped by almost 60%.
Such dynamic has led the creators of popular NFT collections to look for ways to expand their brands through the sale of non-blockchain products. For example, the company behind one of the most popular collections of Doodles recently hired musician and producer Pharrell Williams as brand director, who used his music to create live animations of the Doodles characters. Pudgy Penguins is another project that has started producing soft toys and children’s books based on their NFTs, returning some of the profits to token holders. This is one of the few collections where the average NFT price has more than tripled to around $5,700 in December. Yuga Labs gives away intellectual property rights with its tokens. This means that NFT holders can use the images associated with the tokens as they please without the knowledge or permission of the company. This has led to a flood of related products, from hamburger restaurants to jewelry brand Tiffany pendants.
However, some analysts are skeptical that NFT creators will be able to create a successful business beyond selling digital art.
“The fundamental NFT model didn’t work. It was a bubble that burst and won’t happen again,” said Claire Enders of Enders Analysis.
Some NFT collections have raised a lot of hype and attracted impressive funding, thereby making the crypto community believe in a great success, which in fact turned into a big disappointment and the same losses.
There have been many success stories in the field of non-fungible tokens (NFTs), such as Bored Ape Yacht Club or CryptoPunks, which even people far from the crypto industry have heard of. But there were also many projects that did not justify the hopes placed on them. And here we want to talk about MekaVerse, Pixelmon, PXN: Ghost Devision and The Hape Prime collection.
The launch of MekaVerse, a collection of 8,888 images of anime-inspired robotic creatures, was one of the most successful in NFT history. First week sales were over $60 million and the project was covered by traditional media. The maximum price of the MekaVerse token was 12 ETH ($46,000 at the time). However, immediately after the launch, MekaVerse was accused of fraud. This caused the price of NFTs from the collection to drop to 0.272 ETH ($445).
The ambitious NFT project Pixelmon raised about $70 million, but still failed to meet the expectations of investors. At the time of its debut in February 2022, the Pixelmon NFT minting cost was 3 ETH ($9,500). Now it has fallen to 0.42 ETH ($687). Although, perhaps, interest in pixel Pokemon will return in the nearest feature.
Another project that suffered an impressive failure is PXN: Ghost Division. Not so long ago, the average price for NFTs from this collection was 4.15 ETH ($11,000). Now NFTs from the Ghost Division collection can be purchased for 0.199 ETH ($352), which is a really epic fall.
And The Hape Prime collection also fell short of expectations. Before the launch, pictures cost 9 ETH ($27,500), and today, 0.43 ($703) ETH will be enough to buy an NFT with a monkey in a fashionable outfit on the OpenSea marketplace. And it looks like the price will continue to decline further, as well as the volume of sales.
However, despite the disappointing statistics of the crypto market, in 2022 NFT artists earned about $1.1 billion from collection sales royalties. Moreover, 80% of the declared amount came from small collections like Bored Ape Yacht Club (BAYC). So as in any other business projects there are successful launches and not living up to expectations ones. But the future of NFT development is something we definitely should keep an eye on, so follow us on our Telegram channel and let us be your guide into the most exciting news of a crypto world!