Where the new web3 industry is headed

Today, I'm going to write about what I've been feeling lately.

Good morning.
This is Mitsui, a web3 researcher.

Today, I'd like to write about what I've been feeling recently.

"Table of Contents"
1、NFT is no longer selling well.
2、NFT has lost its novelty.
3、Is it valuable because it is new?
4、NFTs are trading less because they are no longer new.
5、The NFT market tied to real value is growing rapidly.

NFT is no longer selling well.

It's not a new story, but NFTs are not selling as well as they used to, and we have objective data showing a decline in the volume of transactions and active users in the NFT market.

In addition, we haven't seen new projects being completed immediately and festively in quite some time.

This is partly because the NFT bubble has burst and most of the people who entered the market for speculative purposes have disappeared. It is said that this is a passing point for the spread of NFT in society, and I agree.

A bubble is born from excessive expectations, bursts, and many people leave there, but the technology was not a trick, and a few years later, the timing for mass diffusion appears at once.

AI also had many booms, but in the end it became not that useful. It was a tool used only by a few large companies, and it was not imagined that individuals would utilize AI. Then a tool appeared that was easy for individuals to use and overwhelmingly convenient, and it quickly achieved mass adoption.

NFT has lost its novelty.

In addition, what I feel recently is that "novelty has disappeared from NFT, and a sense of deja vu has emerged.

I do a little research by looking at OpenSea's global trend rankings almost every day, and I find that many of the projects are the same: PFPs, IPs, GameFi, Metaverse, Freemints, etc., etc.

When everyone was excited about NFT, everything was a new concept, a new project, and "new" was being born one after another. It seemed as if "new" things were being born one after another.

However, new examples were not born that often, and NFT projects became categorizable and could be paraphrased as "a project like XXX".

This is not a bad thing, and all industries should follow the same path. Since best practices have been created, it is only natural to create our own projects based on those best practices. Rather, projects that only put out their own self without researching them often do not meet the needs of the NFT market.

In this way, competition is created in the market, and through friendly rivalry, the market gradually grows, but there is one point in which the NFT industry is definitely different from the existing market.

However, the NFT industry differed from the existing market in one crucial way: "newness" was one of the main reasons for the value of NFTs.

Is it valuable because it is new?

For example, the first person to create dipping noodles in the ramen industry must have value as a pioneer. But then, exposed to competition, eventually a good tsukemen shop will remain.

This is because the basis for the value of a tsukemen shop is not so much newness, but whether or not it tastes good.

On the other hand, the value of NFT is extremely uncertain. The world's first full-on chain NFT will probably continue to be more popular than its pioneer, even if a full-on chain NFT is created after it and that one has a higher level of creativity and technology used.

This is because the basis for judging the value of NFTs is not set in stone; NFTs are basically valued on the basis of future price increases and current results.

If a NFT is expected to increase in value in the future based on the founders' background, number of followers, and newness, and if the NFT is already selling well, we recognize that this NFT has value.

What I'm trying to say is that there are many objective indicators. Whether tsukemen tastes good or not, whether an artist's music is nice or not, whether a YouTube video is interesting or not, all of these can be determined by subjective indicators that can be self-related.

It is difficult to be able to self-judge the value of NFT. The only thing I can say is that I like creativity. But that is an art form.

I think the NFT transactions have decreased because the newness has worn off.

Let me get this straight so far.

I believe that the reason for the sharp decline in NFT trading volume is partly due to the birth of failed PJs and the disappearance of most of the speculators due to another boom (AI, etc.), but I also believe that the main reason is that "NFT has lost its novelty. I think that "NFT has lost its novelty" is also a major reason.

Besides the speculators who have disappeared, the volume of NFT trading by those in the NFT industry who still feel NFT has a future must also be declining (I have been buying less recently). (I also don't buy much these days).

NFT, like the general market, follows the path of "birth of best practices → imitation of best practices," but since NFT is often judged objectively rather than subjectively, this has led to a situation where copycat NFTs are no longer selling.

The rest is simply that NFTs are not essential to life, so people who were buying them for study have run their course, partly because they are not essential.

Based on my own skin experience and the voices of those around me, I somehow feel that this hypothesis is relatively true.

When I think about it, I actually feel that the NFT industry is following a slightly different path than other industry bubbles that burst. Usually, bubbles are people from completely different industries who come in because they think they can make money and leave when they can no longer make money. But before, during, and after the bubble, people in the industry remain committed.

But if the volume of transactions by people in the NFT industry also drops after the bubble, what will really happen to the speed of growth of the industry? The question arises.

The NFT market, which is tied to real values, will grow rapidly.

Considering the above, I believe that "the NFT market tied to real-world values will grow rapidly" where NFT transactions can be judged subjectively.

The recent case of RTFKT and Nike is another example: if you get a pair of Nike sneakers, even if no one else buys the NFT, it doesn't matter if you are satisfied with the NFT. The standard for evaluating value shifts to the subjective.

After all, people can only make value judgments as an extension of their current self, so by first designing NFTs in a way that ties them to things in the real world, they will gradually begin to learn NFTs.

The way existing products are sold will change to NFTs: ticket NFTs, NFTs that can be exchanged for physical goods, lodging NFTs like Not A Hotel, participation in online salons, NFTs to use software, and so on.

Just as real stores have become e-commerce sales, e-commerce sales will become NFT sales.

I think this area will probably expand rapidly in the future. If we can offer the advantages and convenience of NFT sales over EC sales, NFT will gradually penetrate the market, and if we can subjectively judge the value of NFT only in the digital world, NFT of PFPs and digital goods will also have value.

Therefore, when I receive web3 consultations these days, I often talk about starting by selling actual products with NFT. The market has not yet accepted digital.

This was as I was writing, but I think I was able to verbalize what I have been feeling in my mind recently!

That's all. If you found this interesting, I would appreciate it if you could help me spread the word by liking, commenting, and spreading the word on social networking sites!

Disclaimer: This is written after careful examination of researched information, but since it is privately operated & the source is often in English, there may be some mistranslated or incorrect information. Please understand that some information may be mistranslated or incorrect. Also, we may introduce Dapps, NFTs, and tokens in the articles, but we do not have any solicitation purpose. Please purchase and use all at your own risk.

Writer
mitsui@web3researcher
Daily information about web3 (projects, news, explanations of vocabulary, interviews with project owners, and articles about learning and thinking from research).

I run a web3 based Substack with over 1,000 subscribers in Japan. If you have a project that you would like to expand for Japan, please contact me on Twitter.

※This is a translation of a Japanese article, so I apologize for any unnatural English.