Even in what feels like a turbulent time for crypto and non-fungible tokens, some markets are seeing an increase in returning and first-time buyers. Big name NFT collaborations have helped boost numbers, although trading volume remains low. What does this mean for the future of NFTs?
During the crypto winter, bears hibernate, markets ice over, and people stop buying NFTs, right? Wrong. Thanks to popular brand NFT collaborations, markets are welcoming cheering numbers of new buyers in from the snow.
The end of 2022 marks an interesting time for NFTs. The popularity and value of digital artwork and collectibles is plummeting dramatically, with many asking if NFTs are dead altogether. Celebrities, like Justin Bieber, have had NFTs they purchased for millions recently revalued at just tens of thousands. To really round off the year, a crowd of Hollywood celebrities have become embroiled in lawsuits amid the great NFT crash.
On the whole, things aren’t looking too rosy for NFTs right now. But, that’s only at first glance.
Polygon NFT Collaborations to the Rescue
Brand collaborations are nothing new. Smaller companies team up with bigger, more popular ones in order to benefit from a pre-existing fan base and loyalty. There is a continuing mission, within the blockchain sphere, to bring web3 to the mainstream. Instagram recently revealed it would be enabling the creation, selling, and trading of NFTs directly on its social media platform. This means a vast audience could become familiar with the world of NFTs, where it may have passed them by completely otherwise.
Polygon, an Ethereum layer 2 blockchain, has teamed up with some big names to attract new buyers to its NFT marketplace. As a result, NFTs have been introduced to a larger market. By disguising web3 as loyalty programmes with Starbucks, a swathe of coffee loving NFT buyers have been introduced to the market.
Another notable NFT collaboration made by Polygon is with Reddit.
Polygon & Reddit
A big part of the NFT world is community. It’s not all about crazy high price tags and bragging rights. A supportive and inclusive group, almost with its own language, NFT fanatics are all about the sense of community brought by a shared love for the technology.
It makes perfect sense then that Polygon has paired up with Reddit, a community-based news, content, and discussion website, so successfully. According to a CoinDesk blog, Polygon’s market was doing particular well around 48 hours ago. During that time, Polygon had 10 collections with over 180,000 holders and four collections with above 500,000. This is in contrast with Ethereum’s market, which had four collections with over 100,000 holders and one collection above 500,000.
Out of Polygon’s top 10 collections, four of them were connected to Reddit. These were first dropped in August this year as part of Reddit’s first foray into blockchain technology. In July, Reddit launched its own version of a blockchain wallet – Reddit Vaults. As of early October, over 3 million Reddit Vaults had been created, with the platform fast becoming one of the world’s largest NFT marketplaces.
What does Reddit’s enormous user base, and other NFT collaborations, mean for Polygon’s general stats?
New Users & Transactions Per Week
Despite things looking a bit sketchy for NFTs recently, Polygon has seen its number of users per week grow 500% from August across its NFT ecosystem. Taking these impressive stats further, between the 2nd and 12th of December, Polygon’s blockchain had over 240,000 users – its highest ever number of users per week.
The number of transactions per week has been rising too. Over the past four weeks, the total number of transactions sits at around 24.36 million. Much of this increased activity can be attributed to new mints. This suggests that there still is, in fact, demand and desire for new NFT projects.
NFT Collaborations & Trading Volume
At the top of this article, we pointed out that NFT trading volume remains low. At the start of 2022, NFTs had a global trading volume of $17 billion. As of September, this figure had dropped to just $466 million. That’s an astonishing 97% decrease.
Although Polygon is experiencing highs when it comes to users and transactions per week, its volume is still much further down the lower end of the scale. This suggests that people are purchasing NFTs with a low value, or are getting their hands on free mints.
NFT collaborations have been fantastic for increasing awareness of NFTs amongst those who had not come across them before. Low trading volumes indicate that the time of ballooned and unattainable prices are over.
The Future of NFTs
NFT collaborations, whether between brands or artists and marketplaces, have certainly created an increase in new NFT buyers and traders. More accessible price points let people who are just keen to dip a toe to get involved.
NFT communities are famously optimistic, holding on for dear life and firmly believing that, together, they are going to make it. With the sheen being smudged away from celebrity endorsed digital art collections, people are learning that NFTs can do much more for them.
At Fractis, we believe that one of the strongest use cases for NFTs is for sharing music streaming royalties. Fractionalising streaming royalties enables independent artists to bolder revenue and further their careers. At the same time, these types of NFT allow fans to connect with artists on a brand-new level. Both artist and fan win together, creating an unrivalled sense of togetherness.