NFT 2.0 is a consumer-oriented technology
The present generation of NFTs is not intended for mass consumption
NFT has created a new door into the worlds of conventional art and collectibles, while also allowing consumers to connect with their virtual assets in previously unimaginable ways. However, the NFT market is beginning to saturate and will require a push and inonvations to continue to grow.
The onboarding process is difficult for customers, instability is harmful to true fans, and the artist-fan relationship is distorted. There is far too much dissonance between the price of an NFT and the value it may provide to consumers, and many collections suffer from severe demand shocks when they fail to implement their road map.
The introduction of Interactive NFTs may usher in a new age in the world of immersive art, but what precisely are Interactive NFTs and how do they work? This post will give you some basic knowledge on Interactive NFT.
The primary NFT customer is becoming more aware of rug pulls and frauds, which makes them less likely to purchase new collections. While dropping volumes may appear to be a sign of doom and gloom, the reality is that NFTs require a large enough purge to screen out the get-rich-quick searchers and to motivate the true builders in this space. During a down cycle, resilient organizations that weather the storm by transitioning from Web2 to Web3 will thrive. Agencies and platforms that are not well-positioned will be wiped out, but those who are ready for an email-like shift will maximize high-margin, high-value projects while capturing long-term revenue streams.
Whether you are a builder in this field, a potential user, or an investor, this has significant ramifications. This market will swiftly grow and evolve. If you blink, you might miss it!
What exactly is Interactive NFT?
Interactive NFTs are NFTs that enable users to engage with them in some way. Unlike present NFTs, which can only be purchased and held, Interactive NFT users will have a variety of applications, strengthening the connectivity between users and their NFTs.
In other circumstances, interactivity may entail the usage of NFTs in a game, such as "Ethermon", which allows users to combat Pokemon-like monsters in the Metaverse. Other Interactive NFTs, such as those found on today's platforms, allow collectors to buy a single layer of the NFT and change it at their leisure. These layers can also vary to reflect changes in the day and night cycles.
CryptoKitties is an excellent example of a unique Interactive NFT project. You can "breed" two NFT cats together in CryptoKitties to make a new cat. Crossing two CryptoKitties not only results in a unique, random new NFT, but it also allows users to feel like they are a part of the project.
CryptoKitties
Following the success of CryptoKitties, Metaverse initiatives such as Decentraland and CryptoVoxels proceeded to construct and develop Interactive NFT. Users can purchase and sell NFT plots, plan events, develop infrastructure, perform commerce to profit from it, and pretty much anything else you can think of in this metaverse realm. It is not simply a standard digital asset that you buy and hold; it also allows you to continuously expand, construct, and generate value on top of it. Users now have more methods than they could have anticipated to interact with NFT and the blockchain ecosystem.
The current NFT environment
After more than three years of foundation and development, the NFT ecosystem has continuously developed with many various components, resulting in a spectacular increase in market size.
NFTs have surged onto the cryptocurrency landscape in their brief history, topping $17 billion in trading volume in 2021. By 2026, this sum is predicted to rise to $147 billion. What's more astounding is that this volume belongs to fewer than 400,000 holders, resulting in a transaction volume of $47,000 per user.
Along with the industry's spectacular ascent, NFTs have seen significant alterations since their beginnings. For example, CryptoPunks, which were free to mint in 2017, gained safe bet status by selling for $11.8 million at Sotheby's last year. A few years later, Yuga Labs, the parent business of the Bored Ape Yacht Club, purchased Larva Labs, the company responsible for the Punks, for an undisclosed sum.
Source: NFTGO
NFT now has a market capitalization of $27 billion. This demonstrates that the NFT frenzy is far from over. Aside from that, various difficulties with the present generation of NFTs are beginning to appear.
Saturation: Almost every day, new NFT-related projects are released, each containing thousands of individual NFTs. While they are attractive and can provide value, the market is already nearly saturated.
Choosing a decent NFT to buy right now is challenging for collectors and investors alike, much like finding a needle in the bottom of a haystack when you don't know which NFT is very valuable and has a lot of potential. Profitability over the long term
Low liquidity: NFT's liquidity is particularly bad; the majority of NFT is currently in a situation of no-one buying. This poses a significant risk to people who hold them.
Lack of Availability: Most NFTs are now based on Ethereum, with significant initialization fees and not-so-low prices. However, most of these NFTs are idle, particularly those in the arts. You have no choice but to store it in your wallet, hang it on trading platforms awaiting buyers, or speculate on NFTs. However, because of the lack of liquidity, it is difficult to buy and sell NFTs, leading investors to bury their wealth.
Thus, the development of Interactive NFT to address the aforementioned issues is entirely rational. There are already a few projects in this area that are receiving a lot of attention from the user community.
Different Types of Interactive NFT
Basic Interactive NFT
This is a fairly interesting new NFT genre, with the properties of NFT altering based on how the user interacts with it.
The CryptOrchids project, for example, allows users to interact with NFTs in the form of plants of varying rarity. To obtain the tree seed, you must first create your own ERC721 token. You must then water it for a set period of time every week until it blooms, otherwise the plant will die.
NFT Flowering Plants
This necessitates ongoing interaction with and monitoring of your NFT flower plant, from seed to maturity and value production. CryptOrchids in bloom can be freely exchanged on OpenSea until they die.
Interactive NFT Gaming
Blockchain game paired with NFT is obviously no stranger to crypto users, is still one of the most prominent trends today, and provides significant revenue for businesses in this field.
The NFT gaming market is growing swiftly and is quite vibrant, a testament to their tremendous appeal when consumers can engage with the NFTs they own. Notable initiatives in this field include: Axie Infinity, Star Atlas, Thetan Arena, Cyball, and others.
Interactive NFT x DeFi
Recently, a few DeFi projects began adding NFT applications on their platforms in various ways, and users have responded well. Interactive NFTs in the DeFi sector not only improve their availability, but also provide several ways to generate passive revenue, connect with the platform, and attract new DeFi users.
As an example:
- Orca allows users to stake NFT in order to acquire ORCA tokens from the project.
- Zapper claims NFT to users when they engage in certain tasks. That NFT number can then be utilized to make higher level NFTs. The larger the NFT tier, the greater the incentive for the owner.
How Interactive NFT Functions
Interactive NFTs, like all other conventional NFTs, reside on a blockchain. The majority of them rely on Ethereum's smart contract, however other blockchains do as well. Smart contracts are used to track the NFT's unique elements and let the holder to adjust certain elements.
For instance, if a project is built to allow you to "level up" a purchased character and then sell that character at a higher "level" than you paid, a smart contract could be the way to go. Keep track of these "new levels."
Furthermore, the uniqueness and ownership of an Interactive NFT are public and can be validated by anybody using the blockchain. The user can fully trace the origin and transaction history of his NFT in his hands, regardless of whether the original file is a JPG, MP3, GIF, or something else.
Investment Opportunity in Interactive NFT
Searching potential Interactive NFT projects
In essence, Interactive NFT is a small subset of the NFT sector, with a few projects already underway to develop it. Similarly to investing in ordinary projects, you can look for projects in the game, metaverse, etc. that require NFT but do not yet have tokens. Then, if available, interact with the platform to boost your chances of retroactive participation.
Furthermore, when working with projects that already feature Interactive NFT, consider projects that are dependable and have a defined development roadmap and NFT application plan.
Invest in Platforms for Interactive NFTs
The issue with NFTs is their illiquidity. Although Interactive NFT was created to address this weakness, it is still in its early phases, and no one knows what the future of this trend will be.
Investing in blockchain infrastructure that supports Interactive NFT appears to be a more prudent approach.
DareNFT is a very well-known Interactive NFT platform project today. This project intends to improve the current NFT protocol and make it easier to use NFTs in everyday life, thereby increasing the bond between NFTs and lowering the risk of ownership.
DarePlay, a GameFi platform that comprises a launchpad for non-NFT game blockchains, an IGO service, Rent-to-Earn, and a Lease-to-Earn marketplace for NFT in-game products, is DareNFT's initial offering.
The Evolution of Interactive NFT
The greatest value of interactive NFT is not in the NFT itself, but in how it enables other entities or systems. Increased usability and the correct Interactive NFT application will aid in the creation of many beneficial impacts and is an excellent instrument for attracting users to the project.
Zapper's MAUs (monthly users) surged tenfold after the introduction of Zapper Quests & NFT Season 2. The debut of NFT staking on the Orca platform has also caused a fever in the Solana ecosystem, assisting the project in growing significantly in terms of TVL and user base.
Interactive NFTs in the Art Field
Interactive NFT has also begun to make waves in the realm of art. The world's first programmable classical music "Betty's Notebook" by Verdigris Ensemble Choir in Dallas, Texas was auctioned off on Async Art - a blockchain platform Digital art auction - on May 8, 2021. Metapurse, the world's largest NFT fund, won at a cost of $215,989 per share (equivalent to 56.56 ETH). This auction raised more than $375,000 for Verdigris Ensemble and shattered Async Art's record for a single NFT sale.
Betty's Notebook is just the beginning of the music industry's use of Interactive NFT. With musicians such as Grimes, Eminem, and 3lau already exhibiting interest in Interactive NFT, it's tough to tell how far this trend will progress.
Obviously, the appeal of NFT is still there, especially now that users can do more interesting things with their NFT. On a broader angle, Interactive NFTs and their potential applications is certainly still a fertile land for those who are knowledgeable and know how to invest!
Jean Dubreil