NFT 2022: Godmaking ends, subdivision begins

Article:0xLaughing, rhythm BlockBeats   

2021 is the year that NFT began to reach the public. "NFT" was named Collins Dictionary's Word of the Year 2021, which is why 2021 is known by many as the first year of NFT; While 2022 will be a year of exploring the future of NFT as new projects and use cases continue to pour out, it will be a difficult year for cryptocurrencies and NFT. The broader market downturn outside the cryptocurrency world has dragged the NFT market into a bear market, with Luna, the FTX collapse itself, and the deeper impact that it has caused, causing billions of dollars to disappear from the ecosystem and increasing regulatory and criminal investigations.

From the proliferation of PFP series to exploratory attempts at fashion, music, entertainment, games and meta-universe experiences, the 2022 NFT market has witnessed numerous successes and failures as it proves that it is more than just a "small picture" on the blockchain.

2022 Overview: Light and dark times

Change in total market value (source: NFTGO)

The total market value of the NFT market peaked at $34.96 billion in March, and continued to decline after the decline in May. The total market value remained between $21 billion and $23 billion, and fell to the lowest of $20.82 billion in November, down 40.5%.

Volume change in the NFT market (Chart: intotheblock)

The NFT market peaked in January, when more than $991 million was traded in a single day. A small peak was also created on May 1, when the Otherdeed Series NFT surpassed $375 million in 24-hour transactions. As the market fell, trading volume in the NFT market languished, with some days in November trading less than $15 million a day.

NFT 的持有者人数（钱包数） （图源：NFTGO）

The number of NFT holders (wallets) maintained its 2021 growth trend, growing 161.3% from 1.446 million to 3.778 million.

  NFT 集合的数量   （图源：intotheblock）

The number of NFT collections has increased significantly over 2021, from 39,300 at the beginning of the year to 226,000 today, a 475% increase.

Timeline of NFT Highlights 2022

January

[1NFT trading platform  LooksRare  Officially go live and issue LOOKS Token airdrop

[2Famous beer brands Bud Light and a Secret trade about beerNouns  And set it as the avatar of your Twitter account

[3NFT Market Aggregator platform  Gem  Go online

[4NFT PFP project  Azuki  Completion Completed the offering in a Dutch auction using the ERC721A contract it developed to save Gas costs

[5] STEPN  Completed a $5 million seed round

[6] OpenSea  Completed a $300 million Series C funding round at a $13.3 billion post-investment valuation

February

[1NFT trading platform  X2Y2  Go online and go online with X2Y2 Token for "order mining"

[2The crypto artistPak  "Clock," a dynamic NFT in collaboration with wikileaks, was sold at auction,AssangeDAO  Won the auction with ETH 16,593

[3] CryptoPunk  #5822 was resold for ETH 8,000 (approximately US $23.7 million), an all-time high

March

[1]Yuga Labs  Acquired CryptoPunks and Meebits and enabled the ApeCoin airdrop

[2]Yuga Labs  Raised $450 million at a $4 billion valuation, led by a16z

[3] Axie Infinity  Ronin posted that the verifier node was hacked, resulting in a subsequent loss of $615 million in assets

April

[1] Pudgy Penguins  Sold to Los Angeles entrepreneur Luca Netz for 750 ETH

[2] Coinbase NFT MarketIt has been rolled out in beta form to select users

[3Well-known NFT project PROOF Collective has released its PFP series.Moonbirds

[4The parent company of MoonbirdsPROOF  Closed $10 million in funding, led by Seven Seven Six

[5OpenSea Announces acquisition of NFT deal AggregatorGem

[6[Azuki held offline events and dropped NFT to holders, and the series was named "Something Official" before being renamed"Beanz  It's Official."

[7NFT project partyAkutars  11,539 ETH was permanently locked up due to a contract loophole, worth approximately $34 million

May

[1Yuga Labs is finished.Otherside  Metacosmic land NFT sale

[2] Azuki  The founder admits to running three NFT projects within a year, which are now in disuse

[3] goblintown The NFT was launched stealthily and Free Mint

[4] OpenSea  Launched a new open source NFT market protocol "Seaport", support for barter

[5] Doodles  Former Billboard president Julian Holguin was named CEO

[6[Doodles] Doodlesdooplicator The activity is officially launched.

[7NFT project Moonbirds issue moonbirds to holders.Oddities  airdrop

[8NFT trading marketZora  Raised $50 million at a $600 million valuation

In June

[1] OpenSea  Nate Chastain, the former head of product at NFT, was indicted by the Justice Department for insider trading and arrested in New York City

[2NFT projectmfers  Founder sartoshi announced his retirement and Smart Contracts will hand over to the community

[3The 4th Annual NFT industry EventNFT.NYC  Held in New York, USA

[4Uniswap Labs announces acquisition of NFT aggregation PlatformGenieAnd will issue a USDC airdrop to Genie historical users

[5] OpenSea  Will migrate to the new protocol Seaport, reducing Gas costs by approximately 35%

[6] Doodles 2 Wearable NFT "] Doodles 2 Wearable NFT"Genesis Box"The auction went live.

[7] Solana Eco NFT Market  Magic Eden  Completed a $130 million Series B funding round at a $1.6 billion valuation

July

[1] GameStop  Announced the official launch of the NFT market

[2NFT trading platform  sudoswap  Release of the NFT marketing protocol sudoAMM

[3] OpenSea The Solana Launchpad was launched

August

[1Moonbirds converts open public Copyright to...CC0, and founded Moonbirds DAO

[2The parent company of MoonbirdsPROOF  Completed $50 million Series A financing, led by a16z

[3Renowned encryption artistXCOPY  Announced that all of his works (excluding co-payments) would be licensed under CC0

[4] Meta  Already supports the display of personal digital collectibles on Facebook and Instagram

[5] Reddit  Start the airdrop based on Polygon's "Collectible Avatar", a series of four available for trading at OpenSea

[6] BendDAO  Outbreak of liquidity crisis

[7NFT projectDigiDaigaku  Complete the offering in Free Mint

[8NFT projectDigiDaigaku  The parent company completed two rounds of financing totaling $200 million

September

[1] Sorare  Will partner with NBA to launch Ethereum-based NBA fantasy league NFT game

[2] StarbucksStarbucks Odyssey, the Web3 platform, is launched

[3] Azuki  Development team Chiru Labs is closing A $30 million Series A funding round at a valuation of $300 million to $400 million

[4NFT projectDoodles  Raised $54 million at a valuation of $704 million

[5] NFT SaaS startupDust Labs  After a $7 million seed round, DUST Labs was co-founded by Frank, founder of DeGods, Solana's most valuable NFT project, and Kevin, CEO of the company

[6] Cool Cats  Announced its new CEO, who previously worked at Disney and Warner Bros

October

[1The U.S. Securities and Exchange Commission (SEC) is targetingYuga Labs  Published part of the NFT and whether ApeCoin violated the issue of investigation

[2NFT marketBlur  Officially live and have dropped Token BLUR

[3] Twitter  You have started testing the NFT Tweet Tiles feature, with links showing details of NFT

November

[1] Instagram  NFT casting and trading functions will be built in

[2] OpenSea  New counterfeit detection system launched

[3[NFT series launched by Justin Roiland, one of the creators of the well-known American anime Rick and Morty, and Paradigm, an encryption venture capital firm.Art Gobblers  The floor price once exceeded 20 ETH.

[4] OpenSea Introduction of on-chain royalty enforcement tools

[5] Uniswap  The NFT aggregation service was officially launched, and 5 million USdcs were distributed to Genie historical users

[6]Yuga Labs  Announced the acquisition of WENEW Labs and its flagship NFT series 10KTF

[7STEPN parent company Find Satoshi Lab launches multi-chain NFT marketMOOAR

December

[1] Uniswap and MoonPay  A partnership to enable users to buy crypto assets using credit or debit cards

[2NFT fragmentation protocol  Tessera  Officially live, while opening the CryptoPunk #4847 collective ownership auction

[3[Former president of the United StatesTrumpIssue NFT to support ETH and credit card payment

[4Dust Labs' Solana Eco NFT projectDeGods, y00ts  Announced that they will bridge to Ethereum and Polygon respectively

[5] Yuga Labs  Hired the former president and COO of Activision Blizzard as its new CEO

[6] CloneX  Example Enable the application for EGG

[7] SudoSwap  Lead developer SudoRandom Labs has raised a $12.5 million seed round

Subdivide NFT plates and events

The NFT platform competes from multiple perspectives, such as multi-chain, liquidity, royalty, etc. OpenSea has repeatedly accepted the challenge

With the booming development of the NFT market in 2021, a large number of NFT trading platforms appeared on the market. At the beginning of this year, LooksRare and X2Y2 were launched, which were matched with the platform Token, and focused on low transaction fees and transaction mining, in order to carry out "vampire attack" on OpenSea. Driven by the interests of trade mining, problems such as "washing trades" have subsequently arisen. During this period, due to OpenSea's head advantage, all NFT series have the best liquidity on OpenSea. It is still the first choice for NFT players when trading. Insignificant cost advantages and subsidies cannot fundamentally shake OpenSea's long-established brand advantage.

With the increasing popularity of NFT aggregator platforms such as Gem, by aggregating the prices of multiple NFT platforms, NFT traders can get better quotes. At the same time, one-click scanning can not only be efficient, but also save Gas Fee. Trading platforms such as X2Y2 can also benefit from this and gradually get a share of the market. Gem and Genie transaction aggregators were acquired by OpenSea and Uniswap with excellent solutions.

sudoAMM uses union curves

Major NFT exchanges such as OpenSea, X2Y2, LooksRare all use an order book model. At first glance, this model looks very similar to the limit orders used by central exchanges such as Binance and FTX to buy and sell cryptocurrencies. In fact, the floor price often represents the minimum value accepted by the seller. offer represents the highest value recognized by buyers. Due to the indivisible and high unit price of NFT (the unit price of blue chip NFT starts at 10E), small quantity (the total amount is less than 10k is the most common), and the difference in rarity (the holder may think their NFT is more unique), The floor price often does not match the offer price, and the transaction depth is insufficient, which is the main reason for the inefficiency of matching transactions in the NFT market. To solve this problem, sudoswap launched zero-royalty sudoAMM in July.

In addition to the automatic market maker mechanism for NFT, sudoswap takes the lead in supporting zero royalty to further reduce user transaction costs and improve matchmaking efficiency, thus breaking the competitive pattern of the original NFT market. X2Y2 has also introduced an "optional royalty" feature in hopes of maintaining a niche market that has been squeezed by low transaction fees. However, this has sparked a wide debate in the NFT community about whether royalties should be eliminated (seeTake royalties, and the NFT market is about to changeSince then, LooksRare and Magic Eden have also chosen to allow users to customize royalties.

In October, Blur launched the NFT market and launched its corresponding airdrop program, attracting a large number of NFT traders to experience. Blur was both a direct marketplace and an aggregator, quickly gaining a significant share of the market thanks to a combination of ease of use, low fees (no fees and optional royalties) and airdrops.

In early November, OpenSea countered with the launch of an on-chain royalty enforcement tool, which will allow creators to blacklist non-royalty paying markets where their releases will not be listed. Then, to avoid being blacklisted, X2Y2 announced the removal of its previous "optional royalties" feature.

In December, with the third round of Blur airdrops, the volume of Blur transactions in the NFT market exceeded $500 million. At one point, Blur's market share exceeded 60% and its share in the aggregator market exceeded 86%. Mainly because of the bear market, the vast majority of the volume in the NFT market is supported by older projects that have already been released, which do not support the mandatory royalty tools currently available in OpenSea and are therefore still able to be traded on Blur.

At present, the "royalty battle" is not over yet. Judging from the current competitive landscape, Blur has captured the hearts of a large number of users with its professional transaction interface, simple and fast page, low cost, and at the same time, it has developed user habits by extending airdrop time. "Zero royalties" hurts the creator economy, and OpenSea's forced division is not sustainable. Expect a better solution to royalties in the future.

Free Mint is on fire, and creative projects are scrambling to get the job done

In May, a stealth-launched, Free Mint project called "goblintown" was launched, with the price rising to nearly 6 ETH in just a few days. (Reference:50X A Week, The "Imitation Game" by Goblin NFT")

Then there has been a flood of "no RoadMap, Free Mint, CC0" splashy NFT projects touting "underexpectations, overpayments" and a plethora of new ways to grab attention with wacky ideas. All of a sudden, the NFT community became obsessed with "tagging", hoping to capture the next "Goblin" boom.

Free Mint can give profits to NFT founders. Project parties use Free Mint to hype before and after the release, and then recover the revenue through royalties. Therefore, it has gradually become popular among NFT traders and project parties. With this momentum, there was a Free Mint mini-cycle, including DigiDaigaku, Gossamer Seed and other popular "Big Golden Dog" projects. For The Culture, Moonrunners and other NFT programs have also made a name for themselves with innovative ideas such as "payback" and "Variable NFT".

"Mint gives money to FTC, white hot Free Mint"

"We are all going to die: A new look at NFT from an RPG perspective"

"Moonrunners tops OpenSea's weekly trading list, a storied game with variable NFT"

"Gossamer Seed: Bringing NFT to Hollywood"

"God Hates NFTs by "copying" for 4 days"

"25 times in 3 hours, WZRDS is starting a "civil war""

"DigiDaigaku: Super Deluxe lineup, Free Mint's Golden Dog"

"Castaways: "Free To Own" "Moson +MineCraft", interactive guide included"

"July NFT Marketwatch: Free Mint's 'mini-cycle'"

CC0 concept big discussion

On August 1st, XCOPY, a well-known encryption artist, launchedtweet, announcing that all of his works (excluding co-payments) will be licensed under CC0;

On August 3, encryption agency a16z published a paperWhy are NFT creators embracing CC0The CC0 NFT is further discussed.

Moonbirds founder Kevin Rose on Aug. 5Official declarationMoonbirds will also be converted to a CC0 license, which allows the commercial use and creation of Moonbirds in the public domain with no threshold.

It was the crypto bear market, and the trading volume of NFT continued to decline. Moonbirds' "flip side" stimulated a great discussion on the concept of CC0 in the field of NFT.

"I own NFT, but I don't copyright it. Who does it belong to?"

In fact, there are differences in the way NFT creators/projects grant copyright to NFT holders of relevant works, with the following three schemes being the most common:

1. No declaration, leaving NFT holders with a vague default license;

2. Grant explicit restrictions and licenses, usually for both commercial and non-commercial uses of the work;

3. Open the copyright of the work to the public domain, that is, adopt CC0 license.

On August 31, a16z was announced to be open source"Can't be Evil" NFT license. Miles Jennings, legal Director of a16z, said: "There is currently a great deal of ambiguity and legal risk throughout the NFT ecosystem, a lack of standardization that makes it difficult for NFT purchasers to know what rights they are getting, and the high cost of creating custom licenses, all of which drag down the industry. The three core purposes of CBE licensing services include: Protecting creators' intellectual property and granting NFT holders an irrevocable, enforceable, and easily understood rights base, while helping creators and their communities unlock the economic potential of their projects."

At present, the relevant laws and regulations on NFT are not sound, and various NFT project parties have not reached a consensus. As an "imported product", CC0 is "not suitable for the country" in the process of adapting to the laws of various countries. At present, whether to choose CC0 still needs to be considered in various aspects.

(Refer to theCC0 fork in the road, NFT blue chip project business")

The financialization of NFT is developing rapidly

The technology behind NFT has unlocked hitherto untapped parts of the digital economy, enabling ownership of digital assets. Today, NFTS are popular in and out of the world mainly as profile pictures (PFPS), as well as being classified as art and collectibles.

Like the assets in DeFi, the NFT requires similar primitives, such as lending, liquidity, and asset management, which are currently being built. In addition, while the fundamental value proposition of an NFT is its uniqueness (each NFT is unique), interchangeability is important to increase the liquidity and financialization of an NFTs.

However, in order to realize the financialization of NFT, it still faces two problems -- low liquidity of NFT assets and insufficient price discovery. Once these two issues are addressed, the real potential of NFT can be unlocked, otherwise low liquidity will further make price discovery difficult.

The NFT financialization verticals include: NFT markets and aggregators, AMMs, liquidity pools, liquidity providers, fragmentation, NFT lending, leasing, and valuation, some of which address these issues.

Comparatively speaking, except for the NFT trading market and aggregator, other fields of NFT financialization are not mature at present, among which the NFT loan protocol BendDAO performs well.

BendDAO's lending business

BendDAO is the first NFT liquidity protocol based on decentralized peer-to-peer pooling. Mortgage lending is the core business of BendDAO, and a "down payment buy" feature has also been developed. However, BendDAO has had a liquidity crisis before due to its immature business (seeBendDAO is insolvent, and is NFT finally heading for a subprime crisis?Fortunately, it was settled properly in the end.

However, the current market landscape for the financialization of NFT is still in its infancy, and solutions are still inevitably Mired in low loan-to-value ratios, high interest rates, lack of scalability, and lack of liquidity. In addition, the lack of a scalable, low-risk, and credible pricing mechanism has restricted the NFT credit market, resulting in demand for loans supported by NFT exceeding the supply of lending capital and creating a large unmet demand for NFT lending. The financialization of NFT is a long way off.

(Please refer to theNFT financialization, the challenges and opportunities")

Look ahead to 2023

NFT will explore more practical use cases than just PFP

PFP is currently the most valuable and traded sector in the NFT market (Figure: NFTGO).

On December 14, CZ, founder of Binance, addressed the issue of NFT in "CZ AMA" : "NFT is still in its early stages and there are still a lot of use cases to be discovered, such as NFT World Cup tickets. We need someone to work on projects related to these scenario use cases, and Binance is happy to invest in these applications."

Admittedly, PFPS are by far the largest sector in the market by value and volume, and many people use them as their profile pictures on social media like Twitter to distinguish their accounts from others or fake ones. These are just the beginning. As a way of expressing proof of ownership, it is easier to prove ownership of digital assets than physical ones, which is why art and PFPS are the first use cases. Social value and collectible value drive NFT players to trade NFTS.

But NFT has a lot of untapped potential and more uses. Such as the following areas:

• User name and domain name

• Branding and marketing

• Tickets and passes

• Game assets

• Real estate

• Degrees and certificates

• Anti-counterfeiting protection

• Membership clubs and loyalty rewards

• Vote

• Intellectual property protection

• Crowdfunding

• Legal contract

• Email and messages

• Medical records

In addition to financialization, other creative use cases for NFT are being sought, and the future tokenization of off-chain assets and data through NFT could have far-reaching implications for the entire cryptocurrency market.

More traditional well-known brands entered

A number of well-known brands have joined the NFT market this year, including Starbucks, Nike, Adidas, Reddit, Instagram, Porsche, McLaren, and luxury brands such as Burberry, Gucci, Louis Vuitton, and Tiffany.

Adidas, Li Ning and other brands chose to cooperate with Boring Ape, while Nike was more aggressive in buying NFT brand RTFTK and selling virtual running shoes. Traditional brands and retailers are embracing NFT, Web3, and Metacomes not just for hype. While crossover co-branding can gain brand attention, some big companies seem to be betting on metacomes as a way to prepare people for virtual life in the future.

NFT is driving a shift in the way brands, retailers sell and interact with consumers that can create new opportunities in terms of revenue, marketing channels, community building and loyalty. There is a sense of urgency among these legacy brands to figure out how to take advantage of Web3, especially after many, especially luxury brands, missed the initial opportunity to expand into e-commerce and have only been able to catch up. Now, some brands are anxious to avoid making the same mistake again.

As Web3 technology takes hold, digital interaction with users - from selling virtual goods to using virtual worlds as new marketing channels - presents huge branding and monetization opportunities for brands and retailers in the fashion space.

Today, traditional brands and retailers are competing with streaming giants, gaming platforms and social media for consumers' attention through digital content. This challenge will only grow as the rise of the metacomes further changes the way consumers spend their time, and as more brands enter Web3 and metacomes, more and more creative approaches are needed to stand out. As competition for consumers' attention intensifies, the adoption of Web3 technology can open up new opportunities for brands in terms of revenue, marketing, and brand relevance, while NFT can promote greater mainstream understanding and participation in the crypto market.

Looking ahead to 2023, we may see more brands experimenting in the NFT world.

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