Bybit Mastermind Live ICYMI: Discover the NFT Evolution
The NFT market has been going through the bottom of its cycle as many NFTs' floor prices have retreated significantly. While the hype surrounding NFTs has died down, some surviving NFT projects have been pivoting from NFT Profile Pictures (PFPs) to something that can potentially onboard Web 2.0 consumers into web3.
In this second episode of Bybit Mastermind Livestreaming, we got a fresh overview of the current state of the NFT market, debated how building an AppChain could enhance the consumer-facing ability of NFT IPs and discussed what a post-PFP NFT era could look like. This edition of Mastermind Live ICYMI recaps the Mastermind livestream (in case you missed it), offering comprehensive expertise and insights from leading figures in the NFT space.
Our Nov 5, 2024 livestream hosted experts with strong NFT backgrounds, including representatives from the marketplace and different blue chip NFT communities. Our four guests were as follows:
Jack Lu, CEO & Co-Founder, Magic Eden
Dennis Mak, Founder, Community Lead at Pudgy Penguins Asia
Goldy, Co-founder, 852 Garden (aka Azuki Hong Kong)
Stephy Shi, Head of Web3 Operations, Bybit
Key Takeaways:
The NFT landscape is undergoing a structural change from hype-driven to builder and product-driven.
A steep learning curve and a non-consumer-friendly user journey may have created friction for non-web3 native consumers when onboarding NFTs. However, recent innovations could potentially reverse that trend.
NFTs are still one of the most effective ways to build a highly sticky community. Building an AppChain around NFT IPs could nurture a broader ecosystem for consumers.
Are NFTs Still a Thing?
The discussion started with the question of whether NFTs are still relevant to the broader web3 and crypto market. Despite all the ups and downs in NFT markets, all of the panelists agreed that NFTs remain an important part of the web3 ecosystem, largely because NFT communities are still loyal to their favorite NFT IPs, and that “stickiness” hasn’t been affected by the fluctuation in floor prices.
The discussion then moved to what has actually caused the decline of the NFT market. Some panelists highlighted that the web3 user journey itself may not encourage users to onboard the ecosystem. JackLu remarked that "NFT is a purely web3 and on-chain use case; you have to onboard to a CEX, go download a wallet, go to a marketplace to start trading, but that process sits many steps behind for a new user to come to the ecosystem. During the bear market over the last two years, very few users were coming into the ecosystem, and trying to get new people to NFT was just extraordinarily hard from a pure user experience perspective."
He also highlighted that new users were finding it difficult to get into the NFT ecosystem because of the steep learning curve. Due to the lack of new users, the NFT market became increasingly stagnant during the market downturn. The panel also pointed out that heavy financialization has diverted NFTs’ original purpose of having fun with a group of like-minded people, which could also be part of the reason for the decline of the NFT market.
Moving Beyond PFPs
In the second part of the discussion, the panel took a deep dive into a recent development involving surviving NFT projects: the launch of an AppChain.
AppChains are blockchains designed and optimized for running specific applications, or fulfilling a particular business need. Their purpose is to reduce congestion, lower transaction costs and help a particular ecosystem improve on-chain processing efficiency.
The recent mainnet launch of ApeChain, an AppChain backed by Yuga Labs, has made a lot of noise in the market. On the other hand, NFT project Azuki announced its AnimeChain earlier, an Arbitrum-based AppChain, and Pudgy Penguins' parent company announced its Layer 2 Abstract, a consumer crypto–focused blockchain.
The panel shared their belief that this AppChain launching phenomenon could be an ecosystem expansion strategy similar to what some Web 2.0 IP holders have been adopting. For example, companies like Disney have spent enormous resources building and growing their IPs and brands, as well as launching physical products and services around those IPs, and ultimately, they have their ecosystem. With AppChain, NFT IP owners could do the same in a web3 and decentralized manner.
Besides the launching of AppChains, the panel also discussed the relationship between NFTs and web3 gaming. The conclusion was that there are builders taking advantage of this softer market to build something meaningful “under the hood.” After all, creating a good game title and its related infrastructure takes time, and some of the panelists have seen promising signs from these builders.
The Future of NFTs
With all the innovations and efforts, the future of NFTs remains positive, even after the space has passed its hype cycle. After all, the NFT itself is a technology, and PFP is just one use case for this technology. Moving forward with innovations that can improve user experience, there's a chance for more and more NFT PFP use cases in the future.
In the final part of the discussion, all the panelists gave their takes on the future of NFTs, along with some advice to creators and builders. Jack believes builders should focus on the long term, building something that’s authentic to themselves and avoiding "Shiny Object Syndrome." Dennis highlighted that besides products, the community is also a crucial part of NFTs. His friendships with builders may last a lifetime, and the value of their contributions added back to the projects could be greater than expected.
Conclusion
NFTs may not be the most trending topic in the current web3 space, but the underlying technology is undeniably transformative. As NFTs pass through the hype cycle and move on from speculation-driven to builder-driven, their technology could be a gateway for onboarding general consumers to the web3 realm.
Stay tuned for the next Mastermind livestream.