Companies Jumping Into the NFT Boom for Brownie Points
NFT, also known as non-fungible coins, has gained popularity this year as cryptocurrencies such as bitcoin and ether have surged in value. Investors have noted pouring $90 million into NFT and digital collectibles startups so far in 2021. Investors have taken note of the trend, investing $90 million in NFT and digital collectibles startups so far in 2021. So, in this article, let’s know about the ins and outs of the corporations jumping into the NFT Boom.
What is NFT?
Intangible assets like collectible sports cards, virtual real estate, and even digital shoes are represented by non-financial tokens (NFTs). One of the key advantages of a digital collectible over a physical collection, such as a Pokémon card or a rare struck coin, is that each NFT includes specific information that identifies it from the others and can be readily verified. Because each item can be traced back to its original issuer, fabricating and disseminating fake artifacts is fruitless.
NFTs, unlike other cryptocurrencies, cannot be immediately swapped. There are no two NFTs, even if they’re from the same platform, game, or collection because no two NFTs are precisely alike. Consider their festival tickets. Each ticket contains information such as the purchaser’s name, the day of the event, and the location. This information makes it challenging to exchange festival tickets.
What makes NFTs valuable?
The significant market variables for the price, like with other assets, are supply and demand. Since NFTs are rare and sought after by collectors, gamers and investors alike, people are willing to pay a premium for them.
Some NFTs have the potential to be very profitable for their owners. According to one example, a player acquired 64 parcels on the Decentraland virtual land platform and then united them into one large estate. They were known as “The Secrets of Satoshis Tea Garden,” the property sold for $80,000 because of its outstanding location and accessibility. One of the F1 Delta Time game investors paid $222,000 for a digitized part of the Monaco racing course. The NFT that represents a section of the digital track entitles the owner to 5% dividends from any races held on it, including entrance ticket payments.
Corporations Getting Involved In The NFT Boom
Venture investors are pouring money into startups in the burgeoning NFT sector. Non-fungible tokens, or NFTs, have grown in popularity this year as the value of cryptocurrencies such as bitcoin and ether has soared. They are digital assets that use blockchain technology to track ownership of a unique virtual object, such as a work of art or sports trading cards.
According to statistics from Nonfungible.com, the total value of NFT transactions doubled to $250 million last year, while global NFT sales volumes hit $220 million in the previous month alone.
The trend of NFT Booming
Investors noticed spending $90 million into NFT and digital collectibles firms so far in 2021, according to data provided by Pitchbook to CNBC. That’s almost quadruple the $35 million raised by NFT startups last year.
Sorare, a blockchain-based fantasy football game, garnered $50 million in February from venture capital giants Benchmark and Accel and soccer legend Rio Ferdinand.
“It’s one of the most exciting things we’ve seen in crypto in years,” Andrei Brasoveanu, a general partner at Accel, told CNBC. “That’s one of those game-changing innovations that might have far-reaching consequences outside of the cryptosphere.”
OpenSea, an NFTcs marketplace, received $23 million in a round-headed by Andreessen Horowitz last week, making it the second-largest investment this year.
With claims that blockchain startup Dapper Labs is seeking a $250 million financial infusion at a value of $2 billion, the industry may be primed to attract millions more in venture capital financing. Demand for the NBA Top Shot digital collectibles platform, developed in collaboration with the NBA, has boosted the firm significantly.
When asked for a response by CNBC, Roham Gharegozlou, CEO and creator of Dapper Labs, branded the allegation “baseless hearsay.” Coatue, the hedge fund company said to be heading the deal, refused to comment.
To conclude everything, it’s easy to understand why the NFT industry has attracted early-stage investors and companies globally. The market is quickly expanding, with some digital artifacts fetching multi-million-dollar prices.