The nonfungible token (NFT) market is growing. According to a new report by analytics platform DappRadar, NFT trade volume soared past $10 billion during the third quarter of 2021, a sevenfold increase from the previous quarter’s figure. Although a significant slice of that action comes from runaway hits like NBA Top Shot, CryptoPunks and gaming platform Axie Infinity, NFT use cases are rapidly proliferating as creators recognize their potential.
In the not-too-distant past, celebrities keen to profit from the burgeoning crypto scene had few options. Mostly, they were limited to shilling an initial coin offering (ICO) or investing their own money in a startup they deemed promising. Thanks to NFTs, however, they can now leverage their star appeal by releasing sought-after digital collectibles representing, well, just about anything: artwork, albums, trading cards, or merchandise. These tokenized collectibles can then, in turn, be traded on the open market among fans and investors.
The music industry is a perfect proving ground for NFTs
From musicians and athletes to actors and supermodels, prominent celebrities are busy minting and auctioning a dizzying array of blockchain-based assets and commodities that appeal to the digitally-savvy crowd. Through NFTs, public figures can connect with fans in a digital realm and open up a new revenue stream into the bargain.
Earlier this year, Canadian musician Grimes sold almost $6 million worth of NFTs encompassing artwork and audio-visual animations. While some tokens were one-of-a-kind, other cheaper items had thousands of copies. Although this fact appears to contradict the NFT concept — isn’t every NFT supposed to be provably unique? — the “duplicates” in question raised over $5 million.
It is perhaps unsurprising that musicians are increasingly leveraging NFTs to supplement their income: The shift to streaming over the last decade has massively impacted the earning power of artists. The global COVID-19 pandemic also dealt a huge blow to the industry, since many musicians had relied on live performance for income. Acts joining Grimes down the NFT rabbit hole include Snoop Dogg, Eminem, Jay-Z, Shakira, Lewis Capaldi, Steve Aoki, Shawn Mendes, Kings of Leon, Soulja Boy and Aphex Twin.
Of all of the above names, Kings of Leon made perhaps the biggest splash by tokenizing their new album, When You See Yourself, and raised $2 million in the process. Interestingly, the release included half a dozen Golden Ticket auctions, with the resultant tokens entitling the holder to front-row seats to one show from every Kings of Leon tour for life. Album tokens priced at $50, meanwhile, included a limited-edition vinyl.
We are proud to support Katy Perry’s highly anticipated NFT launch in December that celebrates her upcoming Play residency at the Resorts World Las Vegas hotel. Katy is one of the world’s best-selling artists with all six of her albums surpassing one billion streams on Spotify. Interestingly, the NFTs will include both digital collectibles and IRL experiences — so there’s something for everyone.
Creativity is at the heart of these ventures, and new NFT use cases are emerging all the time. Take blockchain-powered marketplace Royal, for instance, which allows users to purchase shares of songs they enjoy — and earn royalties as those same tracks achieve popularity. Artists, meanwhile, get to retain the majority of rights to their work while accessing direct funding from their biggest supporters. According to Royal, it’s a system “where artists and fans can benefit mutually without relying on middlemen taking most of the profits.” A nice idea, to be sure, and one wonders what the record label bosses make of it.
From TopShot to Topps
Music may very well prove to be the single biggest driver in pushing NFTs into the mainstream — but sports stars are also embracing NFTs en masse.
Of course, we cannot discuss the intersection of blockchain and sport without referencing NBA Top Shot, the basketball card trading game that has turned its creator Dapper Labs into a multi-billion dollar company. Top Shot gives NBA fanatics the opportunity to buy, sell and trade officially-licensed video highlights of iconic moments like Lebron’s two-handed reverse windmill slam against the Houston Rockets last February — $219,000 is the lowest ask, FYI. Lest you believe that trading is concentrated among a core of diehards, Top Shot has facilitated over 13 million transactions while onboarding over a million users.
Needless to say, this formula is being replicated across other sports including baseball (Topps MLB), soccer (Sorare, Socios) and motor racing (F1 Delta Time). ONE Championship, the largest mixed martial arts (MMA) promotion in Asia, also recently announced that they will be launching a marketplace on the Theta blockchain with NFTs offering exclusive access to real-world benefits such as backstage passes, ringside seats and other personalized fan experiences. Individual sportsmen and women are also mobilizing their fan bases through special NFT drops, with heavyweight champion Tyson Fury selling a one-of-a-kind token for just shy of a million dollars. The buyer also received a physical painting of the artwork, signed boxing gloves and a personal video from the self-professed Gypsy King.
It’s natural to wonder where we go from here. Will the NFT bubble burst, leaving fans and investors holding a hoard of digital collectibles? Or, will we see more creative use cases emerging, with NFTs granting fans all kinds of nifty perks?
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.