Backing Arab NFTs is more than a token gesture

NFTs have taken the internet by storm over the last five years, generating countless column inches and eye-watering levels of investment. This is a sector ripe with opportunity, but, as with any investment, it pays to do your homework, says Nasreen Faqihi, Chief Executive of NFT platform Crypto Camels Club.

If you spend even a moderate amount of time online, the chances are you’ve heard of non-fungible tokens, or NFTs. These assets have taken the internet by storm over the last five years, generating countless column inches and eye-watering levels of investment.

The furor surrounding NFTs has been especially pronounced in the Middle East. From the strong sales of token collections such as Bored Ape Yacht Club to Monkey Kingdom — and even the occasional non-simian-themed project — our region’s crypto community has proved more than willing to jump in.

This is hardly surprising given the potential returns. Bored Ape Yacht Club NFTs, which minted for around $250 each a year ago, now boast a price of almost $325,000. NFTs have also been making waves in the traditional art world, with auction house Christie’s selling digital artist Beeple’s “Everydays: the First 5,000 Days” for a staggering $69.3 million in March last year.

Top-line financial forecasts provide further evidence that digital art has entered the mainstream. Analysis from Emergen Research shows that the global NFT market, which hit $50.1 billion in 2021, is forecast to register a 10.7 percent compound annual growth rate in revenue from 2019 to 2030.

Encouragingly, a new trend is now emerging, one which looks set to cement the Middle East’s position at the forefront of Web3 — which is touted to be a new iteration of the internet based on blockchain technology, incorporating such concepts as decentralization and token-based economics.

No longer content simply to invest overseas, regional creatives and innovators are building their own projects.

Welcome to the weird and wonderful world of Arab-led NFTs.

In February, CryptoBear Watch, a project backed by DAMAC Properties general manager Ali Sajwani and YouTube star Rashed Belhasa, revealed plans to mint 10,000 NFTs along with a host of post-purchase benefits, including timepiece giveaways worth $1 million.

In February, UAE-based marketing agency Boredpuma said it had teamed up with Dubai-based retailer Splash Fashions in a bid to merge fashion with environmentalism. Also in March, Egyptian artist Aya Tarek made headlines by launching Egypt’s first art collection for an NFT marketplace.

The Crypto Camels Club, the Middle East and North Africa’s first female-owned NFT collection plans to sell up to 10,000 Crypto Camels stored on the Ethereum blockchain.

The primary advantage of spearheading an Arab-based project is that it can reflect the values and culture of the region.

But what makes digital assets so popular? Well, if you look past the technological nature of tokenization, you’ll find that its upward trajectory is being driven by an old-fashioned need. NFTs represent attractive investments for those looking to diversify their portfolios.

Why? Because, like it or not, Web3 is here to stay. Last month, a report from Grand View Research forecast that the metaverse’s global market size is on course to reach $678.8 billion by 2030. As our lives continue to shift online, blockchain-backed assets such as NFTs will become increasingly important commodities.

Regional policymakers are keenly aware of this, which is why we’ve seen such a recent flurry of regulatory activity.

The Central Bank of Bahrain was among the first to act, issuing regulations governing crypto-asset services in 2019. In the UAE last month, Dubai’s Virtual Asset Regulation Authority outlined its intention to set standards for NFT governance and to create a protective legal framework for investors. Also, last month, the Abu Dhabi General Market, meanwhile, published draft recommendations for NFT trading in the Emirate.

These moves coincide with several notable crypto exchange success stories from the Gulf. Bahrain-headquartered Rain, for example, which had processed more than $1.9 billion worth of transactions by the start of this year, raised $110 million through Series B financing in January as part of one of the biggest ever investment deals for any regional startup.

It seems the Gulf’s proactive regulatory stance has also grabbed the attention of the international blockchain sector. Last month, Binance, the world’s largest cryptocurrency exchange, announced it had secured crypto-asset licenses from Dubai and Bahrain and we also have UAE-based BitOasis in the market.

In short, this is a sector ripe with opportunity but, as with any investment, it pays to do your homework.

In terms of strategy, try not to get caught up in the hype. Invest in projects that speak to your interests and values. Looking to network? Many NFTs act as membership passes to thriving crypto communities. Interested in fringe benefits? Identify projects that feature roadmaps, and back the ones that make promises that match your priorities.

Finally, if you’re based in the Middle East, consider investing in local projects. Our region possesses all the ingenuity, expertise and passion necessary to play a leading role in the metaverse’s ongoing evolution — but we need to support creators today if we are to fulfill this potential.

That’s why backing Arab-led NFTs is more than a token gesture.