At ETH Denver’s virtual conference, non-fungible tokens have been in the limelight with seven mainstage presentations devoted to utility, adoption, and novel use cases — a sign of growing acceptance for what was once considered a niche or lesser application of blockchain tech.
While the seven presentations have been dwarfed by decentralized finance’s 14 (not to mention a dedicated four-hour summit), the stage time comes on the back of a remarkable year for NFTs. Sales numbers have routinely pushed past half a million, multiple NFT-backed games enjoyed major advancements in playerbases and governance, and as of late even celebrities have been using the technology to distribute art of sometimes-questionable quality to die-hard fans.
However, gaming and collectibles aren't the only arena where NFTs are beginning to play a role. In a talk titled “Bridging the Gap Between DeFi and NFTs,” Alex Salnikov of Rarible noted that creative smart contract engineering is leading to a boom in DeFi use cases for non-fungible tokens.
Fractional ownership, wrapping ERC-20s, using NFTs as collateral, and NFT funds are all pushing NFTs into the similarly hot emerging financial vertical — and Salnikov thinks that trend will only continue as newer projects come to market.
“I think a lot of new projects will pop up in the recent future, because we’ve seen a big uptick in activity since September, but it takes half a year to a year to build a really good project [...] so NFT project activity will explode.”
Likewise, John Crain’s “NFTs: Trends in 2021” presentation focused on not just the growth of familiar NFT verticals, but also on how NFTs can help enable traditional meatspace agreements like mortgages, and not just in the metaverse (which is also making promising strides).
These technical advancements are having an impact on the number of addresses getting involved in NFTs, as well as in total volume for popular NFT marketplaces like Opensea. According to Dune Analytics, traffic on Opensea’s platform is beginning to curve parabolic:
Some commentators believe the space could be doing more to attract a larger following, however. Zach Burks of Mintable said in his presentation, “Paving the Way for Adoption of NFTs to the Mainstream,” that the number of NFT users is dwarfed by the number of participants in the wider Ethereum ecosystem.
“Let’s say there’s 300,000 [NFT] users, there’s $300 million volume, and there’s 10 million Ethereum users. If you take 10 million to 300,000 ratio, that’s abysmal,” Burks said. “We should be having at least half of all Ethereum users using NFTs, and why don’t we have that? Because their gateway for interaction with NFTs just isn’t there yet.”
He called for more marketplaces tailored to enabling creators to stand out, as well as greater simplicity so “your grandma” could efficiently browse blockchain assets.
Still, even if there’s work to be done, the showing at ETH Denver demonstrates that a use case once derided as secondary is now becoming more embedded in mainstream development. What’s more, Crain said in a Q&A after his panel that while some people will never ‘get’ NFTs, non-fungible tokens will inevitably attract its own batch of acolytes.
“Haters are always gonna hate so that’s not surprising,” he said. “Its like bitcoin where at first you say, ‘thats too crazy, that’s not gonna work,’ but then you dig in.”