Translated by LC

Key Takeaways

• Numerous companies are exploring ways to implement NFTs in their business plans, and I thought perhaps the Web 2 companies, rather than the crypto-native projects, could trigger the mass adoption of NFTs.
• NFTs are also called physital (physical + digital) goods, which refer to digital assets that can be used in real life. Although many still perceive NFTs as mere PFPs, I expect this perception to reverse within a few years as the number of NFTs with utility is rapidly increasing.
• As the mainstream Metaverse is still far from being realized, the investment focus should be shifted toward hardware development such as 5G, next-generation semiconductors, AR/VR lenses, quantum computing, and neural prosthetics.
• Solana’s Saga launch came at an opportune moment, bringing blockchain technology to the hardware device.
• On a side note, I witnessed the crypto/NFT market presenting a new kind of work lifestyle.

NFT.NYC 2022

Following the Consensus 2022 conference, Xangle’s research team visited New York City for the 4th annual NFT.NYC, which ran from Jun 20-23, 2022. The cryptocurrency market was in a bearish trend for weeks leading into NFT.NYC 2022, breathing down the NFT community’s neck. Despite a recent plunge, however, nearly 15,000 people around the world registered to attend the event. Our team witnessed some powerful discussions between the brightest minds in the sector and the innovations happening within the space. Here are some of the highlights of the biggest and the most important NFT conference, along with a few personal thoughts.

1. Community Is the Secret to PFP-Based Projects

ApeFest and other NFT party venues I attended during the conference have once again reminded me that the value of PFPs – profile pictures – comes from the community. Given that people buy PFPs to represent their digital identity and distinguish themselves from the crowd by building their own unique NFT avatars, PFP projects have a strong focus on the concept of unique identity, setting their projects or character choices apart from other PFP projects. In this context, I believe the satellite events hosted by the NFT projects well captured that community sentiment (the queues were too long, though) as they brought the community together and made the members feel proud to be part of it. In a discussion titled “NFTs with Gucci and SuperRare,” Nicolas Oudinot, Gucci Vault CEO, said that luxury brands also see NFT as powerful Customer Relationship Management (CRM) tool and are seeking to tap into NFTs to connect with customers. Having witnessed BAYC generating over $1B in sales in less than a year to outgrow Supreme, which has been in the game for over 27 years, luxury brands are seeing enormous opportunities in NFTs and seeking ways to implement NFTs into their marketing strategies.

2. Unlocking Mass Adoption for NFTs Beyond PFP

The fundamental quality of an NFT lies in its ability to prove ownership of a unique digital asset and that it can be freely exchanged on NFT marketplaces across borders. Moreover, NFTs have the potential to be infinitely useful in many industries. Although many still perceive NFTs as mere PFPs, I expect this perception to reverse within a few years as the number of NFTs with utility is rapidly increasing. By that time, PFPs will be just one of the many NFTs, so perhaps now is the time to reclassify the utility NFTs. But now, there is a growing movement among Web 2 companies to make NFTs usable so as to help NFT owners unlock physical experiences, and I thought perhaps the Web 2 companies could trigger the mass adoption of NFTs. With this movement toward the added utility of NFTs, I expect to see more products and services leveraging NFTs in various use cases in the future.

“NFTs as physital (physical + digital) goods” was one of the discussion topics in “The State of NFTs” hosted by David Packman, Coinfund Managing Partner, as well as in MoonPay Founder Ivan Soto-Wright’s “Utility NFTs: The Future of Web3.” Physital goods refer to digital assets that can be used or transformed in the real world (NFTs to real-life experience). Ticketmaster, for example, is actively looking to extend into the new space by selling tickets in the form of NFTs. In traditional ticketing, the organizers can only keep the revenues generated from the primary ticket sales, and there are limited ways to resell the tickets in the secondary market. With NFTs, on the other hand, organizers can distribute NFT tickets easily via email or SMS and analyze profit-sharing percentages for future resale on secondary markets. At the end of the day, the technology benefits both organizers and consumers.

3. Still A Long Way for the Metaverse to Reach Mainstream

NFTs are often associated with the Metaverse, but one thing is for sure, there is still a long way for the mainstream metaverse to arrive. The Metaverse might one day resemble the Oasis in “Ready Player One.” Still, at present, the key aspect is how people will connect to and identify themselves in the Metaverse, as most of us spend more time in the digital world than in the real world.

During the “NFT 2.0: The Evolution Of Digital Assets From Gaming To Commerce” speech, WAX CEO William Quigley said that the mainstream Metaverse is still far from being realized, emphasizing that investment focus should be shifted toward hardware development such as AR/VR with added realism, next-generation semiconductors, and holograms. He argued that most investment institutions, including VCs, are not keeping up with the development of modern technology in that they have been heavily investing in software projects with high ROI. Sandbox COO Sebastien Borget also acknowledged that there are many limitations and disadvantages in Web App games. Against this backdrop, VCs will increase investment in hardware, such as 5G, next-generation semiconductors, AR/VR lenses, quantum computing, and neural prosthetics. Only when these hardware products are truly accessible, can the mainstream Metaverse ultimately arrive.

In this respect, Solana’s Saga launch came at an opportune moment, bringing blockchain technology to the hardware device to create more opportunities. I believe the Solana Labs management team, which consists of leading experts from tech giants like Qualcomm, Apple, and Sony well understood the limits of today’s hardware and entered the mobile market one step faster than anyone else.

Side Note. Work Lifestyle of Crypto-Savvy People

The concept of “job for life” is no longer relevant in Korea, but there is still this perception that employees should work 9 to 6 every day. However, being at NFT.NYC, I felt such a perception does not hold true in the crypto community. During my stay, I had the chance to meet with several crypto-savvy people who shared their work lifestyles with me. Here are their stories.

• A digital nomad who works for several DAOs: On the first day of NFT.NYC, I was walking around the streets of NYC wearing a MAYC hoodie when this guy delightfully approached me, saying that he is a BAYC holder himself. While having lunch together, I found out some interesting things about him. He is a full stack developer from Romania involved in 3 different DAO projects. He works 25 to 30 hours a week and travels around the world with the earnings he makes from various DAO projects, which brings in a good income. He explained that staff levels are equal within the DAO system, and developers get paid in utility tokens or stablecoins (or in a combination of both) according to how much they contribute.
• A full-time NFT trader I met on the way to ApeFest:  On my way to ApeFest, one of the most anticipated NFT events, I met a 26-year-old NFT trader from Singapore. Instead of getting a steady job after graduating from college, he decided to become a full-time NFT trader as he didn’t want to be tied into a specific role or company. He chose this career path because he wanted to follow is passion. 
• 13-year-old NFT millionaire: Born in 2009, the 13-year-old NFT millionaire began to code at just 5 years old, and it seems quite natural for this boy to live in the digital world. Although he does not have a bank account, he stores his earnings in the MetaMask wallet, and although he does not hold many physical assets, he prides himself on having more digital assets than anyone else. He even said that he doesn’t feel the need to own a large sum of real-world assets, and perhaps it is such a mindset that drove him to see the potential value of NFTs early and explore the technology. He said he bought several BAYCs last year and currently runs his own NFT project.

Final Thoughts

In the face of macro headwinds, NFT.NYC 2022 showed me that the NFT industry has truly developed and evolved apace. What came as a surprise was seeing numerous companies exploring the ways in which NFTs can complement their business. Recognizing the potential in NFTs early on, they are taking the initiative to implement NFTs based on in-depth analysis and understanding of the technology. The crypto-native PFP projects held well-curated IRL events, some of which gave a tantalizing glimpse of their potential to turn into global brands. The mainstream adoption of NFTs will still take some time but being at NFT.NYC rubbing shoulders with the innovative minds in the NFT space made me feel that time would arrive sooner than expected.