The story of non-fungible tokens (NFTs) has been full of surprises, and it doesn’t seem to be slowing down. The total sales in the first half of 2020 amounted to $13.7 million, and now it surged to new highs in the first half of 2021, with $2.5 billion in total sales.
If we compare the numbers from Q4 2020, that is an increase of 2324% in Q1 2021 sales alone. According to Q1 2021 report from nonfungible.com, there are twice as many buyers as sellers during the first three months of 2021. From art and music to play-to-earn games, these digital assets gain an insane amount of active participants every day.
But some folks claim NFTs are a bubble assured to pop. Outside of them, we see great interest from renowned investors worldwide, who believe NFTs will give a new meaning to digital ownership and change the art of collecting and gaming forever.
You might wonder- how is that even possible? Are pipe-smoking digital beings the future? Isn’t this all just hype? To answer all your questions, we have to take a step back and understand several different aspects of the NFT industry. So let’s get started!
What is an NFT?
Non-Fungible Tokens, are digital collectibles that include art, rare music albums, in-game items from your favourite computer games, and even pet videos. They can be bought and sold freely online.
The concept behind non-fungible tokens is their cryptographic nature. Because these tokens are blockchain-based, they can never be altered, erased, or replaced. With blockchain transforming how people store things, items once thought to be very rare are now found in abundance. NFTs help people maintain that feeling of a rarity for their items while giving them the ability to share them and transfer them freely.
For the first time, artists are earning money through what has historically been considered “free culture.” From CryptoKitties to CryptoPunks, NFTs are becoming a viable source of income for artists and collectors alike.
A Brief History of NFT
History of NFT : The value created for artists in terms of revenue source and recognition is unbelievable, and it is also an efficient way to display their work through virtual galleries. While the meteoric rise in popularity happened recently, the concept behind it has been with us since December 2012. When Vitalik Buterin, the creator of Ethereum, mentioned “colored coins” in the whitepaper. At that time, it was meant to help other protocols create their tokens or digital assets on a blockchain. Although it had its limitations and couldn’t sustain, the concept of Colored Coins built the foundation for NFTs to be successful.
After a couple of years, we have seen Counterparty, a peer-to-peer financial platform that launched several card/meme trading protocols. By using Counterparty’s blockchain, there have been many projects creating in-game assets and other collectibles. One major collection of memes was “Rare Pepes” on Counterparty.
In late 2017, we finally had the very first NFT marketplace- CryptoPunks. The developers made 10,000 unique cartoon characters, and they were offering them for free to anyone having an Ethereum wallet. As the demand went up quickly, we have seen a secondary marketplace open up, where collectors would trade for higher prices.
In the same year, Crypto kitties quickly became so popular that it caused network congestion on Ethereum’s blockchain. The flying, breedable cats had a special number and genome with different attributes, which only helped with its rarity. The network growth and sales volume of Cryptokitties were insane, and it was recognized as the primary example of blockchain use to produce distinctive collectives.
Today, platforms like Mintabase and Mintable made it possible for anyone having the Internet to mint their NFTs. We also see an abundance in marketplaces that are helping creators reach larger audiences, and buyers get a chance to scope different NFTs available in the market. The most prominent marketplace right now is OpenSea. Few notable mentions for limited edition and single edition works are Nifty Gateway and Super Rare.
Different Verticals of NFTs
When ERC-721 became the non-fungible token standard, we saw a massive uptick in gaming, collectibles, and infrastructure built in the ecosystem. With this success, we now have so many market segments in the ecosystem fulfilling user demands to their capabilities.
One of the most significant segments in a marketplace is reserved for collectibles. Unique pieces of art are being collected and sold at a higher price. Cryptopunks is the most extensive collection in NFTs right now, and the demand for each character keeps growing. We have seen many new projects come to light in the last few years that created a network for users to interact and mint their own digital avatars. To name a few- Avatars, Urbit, and Joyworld are bringing out new features with their rare tokens. The meme is another unique project that incorporated liquidity mining and staking to earn limited edition NFTs.
The NFT marketplaces right now are merging with DeFi projects to add more value and increase the level of interoperability. With DeFi, NFT protocols can integrate a new financial tool via smart contracts and elevate user experience by multifold. We have seen this with Aavegotchi and Rarible. Tinlake is another project that has combined DeFi principles with their NFT marketplace. Most of these companies are leveraging DeFi to increase use-cases and add more unique financial services.
We see protocols extracting maximum value from NFTs and innovating ways to make the crypto finance ecosystem complete. With the emergence of Defi in the NFT ecosystem, users can deposit their collectibles as collateral and get a loan that is usually denominated in ETH. NTFi is a small growing business in the space, trying to help users benefit from their valuable collectibles. We see similar action from Niftex, which makes fractional ownership of NFTs a reality. Charged Particles is another protocol with a profit-making model for users by wrapping their NFTs in a range of ERC 20 tokens.
Many experts believe that blockchain-based domain names will play a vital role in Web 3, and we see a rise in the popularity of these decentralized websites. Companies like Unstoppable Domains and ENS are prioritizing ownership of one’s digital identity and simplifying crypto payments.
One of the most popular segments right now, and it is not even close. Play-to-earn games and gaming studios have observed monumental growth in terms of sales volume and daily active users. NBA Top Shot surprised everyone by enabling users to purchase, collect, and trade clips/cards of their favourite NBA player. Some major purchases include Lebron James’s iconic dunk that sold for over $370k. Axie Infinity is another special NFT-based game that shocked the entire NFT marketplace. In the last 30 days, Axie averaged 30 million in sales and has a total sales volume of 370 million. Gaming studios like Dapper and Immutable have contributed to so many games including, Crypto kitties, Cheese Wizards, and Gods Unchained, respectively.
NFT marketplaces are like Amazon and eBay, so one can never be enough. Cryptocurrency holders worldwide want to buy and trade non-fungible tokens, and to do that- an NFT marketplace is required. Most of the current NFT marketplaces list only a few specific non-fungible assets. Some are gaming-oriented, while others prefer art and collectibles. Rarible and Opensea are two famous marketplaces that are built on top of Ethereum. Recently, Binance has also launched its own marketplace, providing all kinds of digital assets.
A combination of virtual reality and NFT provides more in-depth knowledge and detail of any digital artwork. Real estate non-fungible tokens and plots create another dimension, giving governance of that particular virtual space, and they can trade it for more value. Sandbox and Decentraland are notable projects in this space, and they are leading in creating a metaverse.
Issues with NFTs right now
We know the underlying technology of non-fungible tokens is immutable, transparent, and secure, but that does not mean scams or frauds are impossible to take place. With non-fungible assets/tokens being sold for millions, bad actors leverage this trend to target users and steal their funds. Apart from scams, many legal issues and ownership problems are growing amid the current mainstream hype.
We see scams flood the marketplace because there is no centralized authority to verify artists and their work. That is why the most common type of NFT scam today is impersonation. People are literally copying artists’ profile pictures and selling similar artwork. If someone is unaware of legit NFT marketplaces, they have a high chance of being trapped into buying a fake NFT collection.
Another common scam tactic is brand impersonation. Social media pages of famous brands are being replicated to extract private keys and steal funds. Because of such bad actors- you always have to verify accounts and practice proper security measures.
Even if you land on a trusted NFT marketplace like Opensea, you can still be scammed. Recently, some scammers are misleading users with their bids, and they do that by changing their profile picture to WETH or ETH. This makes you believe that you are getting the exact amount you asked for, but it will be in USDC, not WETH. So make sure to cross-check on multiple platforms to get the actual value of your NFTs.
The legal treatment of NFTs and their marketplaces has always been a debate and remains to be unsettled. Some of the legal issues raising huge concerns surrounding NFTs are listed below:
The problem with NFTs being stored on a blockchain is that- if the server hosting fails and data gets deleted, given the link will break, the digital asset would be worthless. When such interruptions take place, they can lead to regulatory record-keeping violations and loss of data.
The NFT landscape for creators is still not very clear. With the help of smart contracts, creators/artists will get commissions or royalties every time their work is resold. However, these payments are not guaranteed if it doesn’t come from the same platform. If something goes south, then even the law cannot provide recourse for unpaid resale loyalties.
Intellectual Property Rights
The majority of NFT buyers and sellers are not familiar with the legal restrictions attached to copyrighted work. So what ends up happening is that- buyers facing a loss of value as the art was misrepresented might create legal liabilities for the seller in multiple ways. Understandably, the NFT market is still nascent, but we need custodial solutions to protect IP rights.
If you have been around the NFT space or just getting started, you would know that it is an extremely complicated process to buy/sell/trade digital assets on any marketplace. Some would say- NFT markets are like islands with no bridges for users. So if someone is excited to play NFT-based games or purchase any collectible, they have to go through this long, boring process of setting up a special crypto wallet and exporting tokens to another platform.
With poor user experience and complicated onboarding processes, we are seeing millions of potential users leaving the world of digital collectibles and blockchain games.
That needs to change right now!
Here’s how Chronicle delivers the most immersive NFT experience ever
Intuitive User Interface
Chronicle NFT: Chronicle is launching a unique platform to take NFTs mainstream and solve the user experience problem. The company wants to make NFTs accessible to millions of traditional users who are not pre-familiar with cryptocurrency and the operational use of blockchains.
Chronicle’s plan to mass NFT adoption starts with onboarding more users and increasing active participants in the community. By simplifying the registration process with a simple email, Chronicle is not leaving any potential users in the NFT marketplace.
NFT Payments made simple
Even in purchasing and depositing crypto, Chronicle nft is using more flexible payment partners like Stripe or PayPal. With such an easy-to-use NFT platform, users will be able to buy/sell/swap collectibles and in-game items without handling any blockchain details in the backend.
Reduced Gas Fees
Although the company is currently not using a decentralized platform, it is more beneficial to users regarding gas fees. Chronicle, being a centralized marketplace, buyers and sellers avoid the complexity involved and high energy costs for every transaction.
Major Stakeholders & Services within the Chronicle Universe
The NFTs as a service ecosystem involves many members managing different aspects of the Chronicle universe. Here are some of the major stakeholders within the Chronicle nft:
Once the licensed collectibles are minted from the studio, they will be listed on the Chronicle store. Traders can then select their desired NFT from different brand categories. The platform gives more emphasis on the experience for the collectible holder.
Before any NFT is listed on the Chronicle store, environmental and character expert artists have to develop and authenticate them. Once the verification is done, collectibles are listed with a Chronicle hologram or watermark. It is for instant recognition of the brand.
Individuals who hold IP of any collectible will receive a percentage of revenue, which typically depends on the fanbase, brand history, and its owner.
Affiliates play an important role in acquiring world-class brands and facilitate successful partnerships with Chronicle. It is usually done in cooperation with licensing agencies, and scouts handle the revenue share, valuation, and contracts.
When there is a crowdfunding arrangement, anyone can claim a stake of the brand’s IP for all the collectibles. After respective onboarding brands, minority stakeholders will regularly get dividends from the revenue generated from their brand choice.
The Chronicle from the Inside
Here are the services offered by Chronicle, Such as
Listing and distribution of collectibles are all done through the Chronicle store. There will be auctions hosted now and then to launch limited editions and legendary NFTs. For premium access to these collectibles, users require XNL tokens. XNL is designed to incentivize users and offer it as a utility token.
Chronicle Swap & fan-based tokens
To empower the fan ecosystem in the Chronicle universe, users can issue their loyalty tokens to redeem special offerings and other privileges. Once Fan Token Offering is complete, they will be listed on Chronicle Swap. After that, users can trade them just like any other token.
This centralized platform is mainly for buying, selling, and swapping collectibles. The Chronicle marketplace offers zero listing fee and only takes 2.5% of the deal when buying takes up an order.
Future Roadmap for Chronicle Universe
We believe in Chronicle’s future plans, and we trust the team will take it to the next level. Here are three main things we are expecting to see in the Chronicle Universe in the near future:
A combination of Defi and NFT is going to serve well for the users and the artists. A platform where artists, brands, and users can freely create profiles, license collectibles, and host auctions in the future. Chronicle Certification will create an effective election system that allows the community to choose different roles. With a decentralized platform, even the Chronicle Studio can be accessed by artists.
We are looking forward to this unique feature, and what it does is fill the gap between physical items and NFT digital collectibles. By taking over the custody of an item, Chronicle NFT can issue a special NFT token.
Chronicle X is planned for elevating user experience and helping navigate non-tech users in the NFT ecosystem. The platform is also incorporating new ways of authentication to reduce or eliminate art forgery and piracy. Chronicle’s standardized technical solution will also solve the high gas fees issue that is limiting mass NFT adoption.
Here’s why GravityX Capital is confident about Chronicle
The tech behind Chronicle is convincing, as it uses NEAR protocol and Chromia for blockchain transactions and database storage, respectively. With the help of NEAR protocol, users can stay rest assured it will be a carbon-neutral network, and the transaction fees will be less than a penny.
Chronicle’s team members are promising, as everyone brings immense experience in creative arrangements and project developments. We believe that it is extremely important to drive more NFTs onto the platform and partner with the world’s best brands.
For NFTs to become mainstream, we would need a mobile application to increase accessibility and ease of use. That is where Chronicle will prove to be an all-industry platform that covers animation, sports, gaming, music, top brands, and celebrities. As Chronicle NFT aims to create a fan-based NFT ecosystem, we believe it can overcome the blockchain aspect and simplify all operations for users.
For NFTs to achieve mass adoption, there are four main challenges to overcome- high fees, fragmented user experience, lack of creative freedom for artists, and little to no copyright protection. To make digital collectibles mainstream, we need to see platforms being more accessible and easy to use. Chronicle is working on building a platform that brings world-famous collectibles from fan-favourite brands and provides a seamless user experience throughout. By having a unique studio for artists, Chronicle also makes sure to provide freedom of expression. Chronicle aims to protect digital copyrights while offering an intuitive and delightful user experience. The road to Chronicle NFT mass adoption is long, but with platforms like Chronicle NFT on the rise, there is hope for a bright future.
Want to study more about Chronicle? Here is the Whitepaper.