Even though the NFT hype cycle of 2021 has passed, industry analysts predict that in 2023, NFTs will be driving the next wave of consumer brand engagement, bringing a whole new set of users to the metaverse.
Although the market for non-fungible tokens (NFTs) is currently in a state of severe collapse, many influential players in the industry believe that 2023 will be an opportunity to build new infrastructure in preparation of the next crypto bull market.
Migration of Brands to the Metaverse Will Be Fueled by NFTs
Forrester predicts that in 2023, NFTs will play an important role as a brand touchpoint in the metaverse. Unique digital tokens known as NFTs are used to permanently record the asset’s provenance and ownership on a blockchain.
Although the basic idea of a “metaverse” has yet to be developed, venture capitalist Matthew Ball offers this explanation in his 2022 book The Metaverse: “ A massively scaled and interoperable network of real-time rendered 3D virtual worlds that can be experienced asynchronously and continuously by an effectively unlimited number of users with a personal sense of presence, and continuity of data such as Identity, History, Eligibility, Commodities, Communications and Payments.
With companies like Samsung, Nickelodeon, Gucci, and Nike all making moves in 2022 to refresh their brands and find new revenue streams, 2023 is expected to be a bright year for corporate metaverse ambitions.
As before, brands’ NFT rewards will remain unique
At the 2022 NFT.NYC conference in New York City, Jeff MacDonald, director at advertising agency Mechanism, claimed that marketers are providing Web3 customers with exclusive benefits, extra benefits, and/or guaranteed bragging rights. As an industry leader, Starbucks was among the first to launch an NFT-based brand loyalty program, rewarding customers who carry coffee-themed NFTs with unique in-store experiences. As such, Nickelodeon is gambling that the presence of the classic Rugrats profile pic on the Ricker Forever Inc. NFT platform will re-engage long-lost viewers.
Nike’s latest iteration of their iconic sneaker design is a futuristic hybrid that can transform an ordinary pair of shoes into a fully realized virtual character. As layer two solutions become more attractive to polygonal corporate applications, this paradigm is predicted to gain popularity in the coming year (2023).
At the NFT.NYC conference, the Wall Street Journal disclosed that several companies have far-off plans for their Web3 strategies.
In addition, NFTs provide businesses with fresh options for product monetization and promotion. In 2022, as part of its cryptography series, Pringles released an MP4 video NFT. To celebrate the return of its McRib product, McDonald’s released an NFT collection in the United States in December 2021.
Creative expression will be unrestricted and thrive
Venture capitalist and Patreon backer Valentina Zakirova predicts that by 2023, non-fungible tokens would give artists unprecedented influence. This eliminates the need for a go-between, allowing artists to profit fully from their creations.
The signed music platform Band Royalty will be expanding its library of around 3,000 NFT-based songs in 2023 to include new musicians. Musicians get paid “royalties” every time their band’s song is used in a playlist.
Symbolic artworks have been put to the test by 2022’s recession. Beeple, who created the groundbreaking nonfungible token work “Everydays: The First 5000 Days,” which sold for around $70 million in 2021, is projected to earn an additional $252,000 at a Christie’s auction in the middle of 2022. Artists can use the idea of fractional NFT art to overcome waning enthusiasm. The purchase of an NFT gives the buyer a fractional interest in the piece of art.
In 2022, Christie’s sold $5.9 million worth of tokenized artwork, a fall of 96% from the $150 million in 2021. The British auction house is clearly interested in the intersection between art and blockchain technology, despite the weak sales. Early on in 2016, Christie launched a new venture capital division with a special focus on the Web3 industry. Layer Zero, a blockchain interoperability startup, is one of the companies it has backed so far.
New Horizons in Technology: Decentralized Finance Applications
In the decentralized finance (DeFi) space, non-fungible tokens may acquire traction in 2023 if corporate participation becomes more common.
Future-thinking DeFi authors Steven Boyke Sidley and Simon Dingle write in their book “Beyond Bitcoin: Decentralized Finance and the End of Banks” that individuals may one day provide NFTs of assets as liquidity to a decentralized exchange. They might perhaps invest the NFT-borrowed bitcoins in more high-yielding products.
Loans secured by NFTs can be obtained through several existing services. In the event of a default, the venue will settle the debt in ETH and distribute NFT to the lender.
Dr. Jane Thomson predicts that NFTs will also be used to tokenize licenses and academic qualifications in the near future. When it comes to the British digital asset business KC Holdings, Thomson is the guy in charge.
Using NFTs to determine creditworthiness could be another significant development in the year 2023. Earlier this year, Charles Hoskinson argued that creating a decentralized economic identity is essential. Those who have been denied access to conventional financial services would benefit greatly from this recognition.