NFT-2022: What to expect from a brand-new industry? Part 3

NFT is a huge branch of the blockchain economy that essentially formed before our eyes in 2021. And while few people knew what “non-fungible tokens” even were a year ago, by the end of the year, the most prominent corporations were already integrating NFT solutions into their products, and the market volume amounted to tens of billions of dollars. Let’s take a look at what we can expect from NFT in 2022.

One potential area of ​​NFT development is co-creation and co-ownership of content. Instead of passively consuming, fans are now producing content themselves, increasingly blurring the line between users and creators. They will soon be able to build rich worlds for NFT characters and modify NFT according to their personal vision, individually or through the DAO. The biggest fans will become part of the creation process.

There are communities today that make tools for collecting NFTs. Meebits are collectible 3D characters created by the CryptoPunk team, and their community members are already producing tools for them, such as guides on how to transform Meebits into metaverse avatars. Some of them have even formed DAOs such as MeebitsDAO. Similarly, Axie Infinity has designed collectible characters called Axies and allowed the game’s community to freely develop their own games using these characters.

Another example is collectors who can modify the NFTs they own: AsyncArt is an NFT-designing platform that creates programmable NFTs and music. Collectors that own a piece of NFT music can alter it to make it unique.

Soon, fans will be able to take NFT music, art, videos, fiction, etc., and “remix” them to create new NFTs, with royalties paid to the original creators. It will bring about the emergence of fan-made worlds, where the most popular characters will become NFTs that can be placed in fan-made environments. Users will be able to create games for their favorite characters, include metaverse support, incorporate the characters in new creative works such as movies, fiction, music, videos, and more.

One more future trend is fans that can alter NFTs: Users will be able to individually or collectively determine how some NFTs look and sound. For example, fans can get Taylor Swift’s album cover and change the background. As NFTs become part of gaming, movie, or comic book worlds, fan associations will be able to vote on the storylines or behavior of certain NFT-based characters.

From a business point of view, it is crucial to consider the settlement of property and income disputes. They are bound to arise within the network as the NFT creation process becomes more widespread and complex. Authors who work together on an NFT can contest revenue sharing and ownership percentages. Some authors may create the same NFTs on different platforms, others could change the NFT metadata, and so on. So there will be more protocols to authenticate NFTs, investigate minting fraud, and resolve other online disputes.

There is also a possibility of NFTs designed to identify past actions and attachments. People will earn non-transferable NFTs based on the actions they have taken. The NFTs that people own will be unique “fingerprint” identifiers. This past history-based reputation will be used as a digital indicator to unlock new opportunities.

For some specific examples: Uniswap now provides users with NFTs to prove their position. Reality Cards is a prediction market that allows holders of the largest positions on both sides to receive results in the form of NFTs, allowing users to create a betting history. POAP is a protocol that lets event creators issue Proof of Attendance badges.

In the future, apps could also use NFT ownership as a sign of quality. Users who own certain NFTs will be considered high signal users and have early or exclusive access to the latest applications. For example, users holding specific Uniswap NFTs will indicate their liquidity provider status. Similarly, some DeFi protocols give early access or higher spending limits to users owning certain NFTs.

Communities can potentially reward members with NFTs based on contributions. For instance, certain NFTs can be awarded to the most active managing community memberі, lead code authors or community members most engaged in comments, etc.

In another example, users can only join the grant committee if they have an NFT confirming that they have given funds in the past or have been active in governance protocols.

Finally, there will inevitably be NFT-based credit scores: if people receive NFTs for being a “good citizen”, lending protocols can increase their lending rates. “Bad citizens”, on the other hand, may receive a badge that marks them as such. In this way, NFT ownership can be used to determine creditworthiness.

To be continued…