NFTs were, and kind of still are, the hottest topic in the financial world. Cryptocurrencies usually make mainstream headlines for two reasons, scandal or price action, though in the past year there has been more focus on what the technology can do in a broader sense, outside of just creating value.
A New Crypto Use Case
Well, now that billions of dollars have been poured into NFTs, that steep upward trajectory is leveling out to no one’s surprise. NFTs, for the most part, are built on Ethereum technology, and that blockchain was already struggling to handle the transaction volumes created by DeFi products and platforms. According to data from NonFungible.com, the NFT transactions have dropped 90 percent from their $170 million highs in May.
Now, ‘experts’ are once again flouting the legacy superstitions of passing technological fads and crazes. But you should ignore them because NFTs are here to stay. The market decline is due to several factors that include, but are not limited to:
- Major companies influencing markets.
- China cracking down on cryptocurrencies.
- Ethereum’s technological bottlenecks.
There’s no cause for concern. Whilst Ethereum undergoes a few major upgrades over the course of the next year or so, we’ll probably see NFT transaction volumes fluctuate.
NFTs are the New DeFI
Remember when DeFi applications drew in tonnes of new capital and users to the crypto/blockchain world? That ‘hype bubble’ popped, it had to. Interest waned, billions of dollars invested into DeFi were withdrawn. The technology just wasn’t quite ready. It wasn’t user-friendly, intuitive, etc. Now fast forward to 2021, and there is over $40 billion locked up in Ethereum DeFi products, and the space is still growing.
In the aftermath of red-hot market action, when the dust has settled and at least half of all ‘startups’ have closed up shop, if there are entities still at work building infrastructure and innovation around this new technology, then rest assured it’s entering a phase of maturity.
Sure, there’ll be scams, terrible business plans, and farfetched “revolutionary disruptors” that’ll attempt to corner a portion of the NFT market, but do not forget there are many companies and individuals out there with great ideas, good intentions, and incredible innovations for the world via NFTs.