NFT Trends to Watch out for in 2023
By Michael Pierce, Co-founder, and CEO of NotCommon
There's no denying that Web3 users, particularly NFT collectors and investors, have had their confidence shaken in the face of several high-profile scandals that transpired in 2022.
After experiencing a massive upswing in 2021, with around 1.5 million in NFT art sales, Q3 and Q4 of 2022 saw the NFT market face myriad challenges, ultimately plateauing. NFTs are still a viable asset, particularly when it comes to collectibles, making up 60% of the market share and the digital art space. These changes also sparked a broader conversation regarding security and what role NFTs will play in building Web3 identity.
For investors well-versed in the digital economy, or those hoping to incorporate NFTs as part of their portfolio, there are several NFT trends to be aware of as we move into 2023. The new year will bring with it the transition from hype to utility, and investors and collectors should prepare to view NFTs as a tool to build a more transparent, equitable Web3 space.
The NFT space is maturing
While stories like the fall of FTX and the arrest of the infamous Sam Bankman-Fried, have dominated the news for the last several months, resulting in the degradation of people's trust in Web3, NFT projects don’t seem to be going anywhere. With many adjusting to the inevitable growing pains of novel technology, the NFT platforms that have staying power are the ones that are experimenting with utilities around their collections. 2023 is poised to see an increasing amount of NFT platforms providing concrete offerings that users can benefit from in tangible ways, such as earning points or community building, rather than just being predicated on potentially making quick cash from an NFT sale.
Web3 brand Psychedelics Anonymous, which centers around NFTS, recently launched a token-gated merchandise line where buyers need an NFT from one of their collections to purchase apparel. In partnership with EZU, buyers participate in a "Wear2Earn lifestyle application," which offers customers NFTs and exclusive rewards. Using non-invasive NFC chips placed in clothing, EZU will better understand consumer needs and desires based on real-world data and post-sale analytics.
The partnership between PA and EZU is a testament to maturation within the NFT space, highlighting how intentional utility can benefit users and businesses within Web3 in a new and dynamic way.
Significant brands aren't shying away from digital collectibles
NFTs function as one-of-a-kind blockchain tokens, granting those that own them a clear marker of ownership, which range from a variety of artistic media, most notably, digital art. Because of their traceability, companies are now experimenting with NFTs as part of reward-based systems. One of the biggest companies to adopt NFTs to date is Starbucks. Recently launching a beta version of Starbucks Odyssey, select participants will be able to participate in 'Journeys,' the coffee giant's latest rewards program integrating NFTs as part of a meaningful exchange with customers. Members will gain rewards by participating in interactive activities such as games, virtual tours and more. Customers will be rewarded an NFT collectible to a 'Journey Stamp'; the more they earn, the more benefits unlocked. Already considered one of the top rewards systems, Starbucks chose to use NFTs to enhance its marketing reach while simultaneously building a community for Web3 users.
Starbucks is just one of many major brands; others include Porsche and Mcdonalds, which utilize NFTs to build brand awareness and engage consumers in a more meaningful way.
A neighborhood watch for the NFT community
At the beginning of 2022, OpenSea hackers stole $1.7 million worth of NFTs, leading more Web3 platforms to reimagine their security features. While it is still possible to report bad actors in the NFT space on Twitter or Opensea, these platforms are still vulnerable to phishing attempts and malicious bots.
With security concerns at the forefront of the discussion about changes in the NFT space, building a cooperative community within the space is vital to staying safe. Crowdsourced reporting will be a significant way NFT investors can remain vigilant. Living databases and tools that can report an account and make it publicly available will be essential to protecting digital assets and identities in Web3. Experienced Web3 users may be accustomed to this activity and have a better idea of what to look for when it comes to fake accounts. Still, for newcomers, having to search various sources to find whether or not they are interacting with a bot can be overwhelming.
Educating users will keep them safer in the long run
Thinking from the bottom up, implementing good hygiene in Web3 should start with the user. Whether web-savvy or utterly new to the space, properly onboarding individuals is critical to creating a positive and beneficial Web3 experience. Education can start with simply teaching users about best security practices, like using a minting wallet, hardware wallet and proper crypto wallet hygiene, regardless of their activities.
Users buying and selling NFTs will also benefit from clearly identifying their goals, whether simply trading digital collectibles or looking to gain exposure to crypto as an asset class to hedge inflation to the retirement investment thesis. From there, they can learn what it means to build an identity in Web3 around those goals and what steps they need to take to protect themselves.
2023 will be focused on using NFTs to build a safer more connected Web3
The NFT space is currently going through a significant transition that's scared some people off. But many, from digital artists to major brands, are leveraging the inherent transparency and accessibility. 2023 will see NFTs as a building block to create a stronger foundation for Web3 to be built upon.
About the author:
Michael R. Pierce is the Co-Founder and CEO of NotCommon. A passionately curious entrepreneur, Michael has founded multiple companies in the technology, media, and finance sectors and specializes in go-to-market strategy, growth marketing, and user experience design. He believes the transparency and freedom that NFTs offer are exciting and wants to educate people on the risks and benefits of adopting digital collectibles while keeping their identities safe.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.