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Are NFTs Dead?

What The Landscape Looks Like And What It Means

By Cody Dakota Wooten, C.B.C.Published 2 months ago โ€ข 5 min read
Top Story - September 2023
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Not all hype lasts.

Do you remember Fidget Spinners?

Sometimes, things that "seem" great end up not being so.

What has happened with NFTs?

For a while, they were all the hype.

Artists were saying it was the future (well, "some" artists, I'll get to that later).

Celebrities were purchasing them left and right.

Talk shows were discussing their merits.

Analysts were talking about how the art industry was about to dramatically change.

What happened though?

If we look at the industry, things are looking down.

Decline In Volume

In the past 18 months, NFT trading volume has dropped 81%.

With this, their monthly sales have also declined by 61%.

What is this an indicator of?

From my perspective, It seems that the industry is failing to grab net new customers, and it is further losing its list of artists.

From this data, it appears that for the majority of artists, this isn't a profitable deal for them, so they are losing interest in the overall approach.

Sales aren't completely gone, but with such a large drop, there are likely two possibilities (which are not exclusive).

First, we could be seeing that "certain" NFTs are still getting traded, but they would appear to be dwindling overall not leading to "new" NFTs joining the mix.

Second, we could also be seeing a drop in overall interest, you could say it is a ceiling.

The market may have determined that they simply aren't willing to pay more than they already have.

We saw this craze occur with Beanie Babies in the past - there was a huge boom in how much they cost, but eventually, people decided they simply weren't worth the high prices anymore.

What else is occurring in the industry?

Decline In Companies

We are seeing that different NFT marketplaces and media platforms are starting to crash and burn as well.

Organizations like Recur and Nifty have closed completely.

Then you have Blur which has lost 96% of its sales volume in about 3 months.

One possibility is that there was simply an oversaturation of organizations, and it was inevitable that eventually many would have to shut their doors or get assimilated into other companies.

This is a normal trend with "hot" new industries, as many attempt to fight to get seen as "the" company in that industry.

We also may just be seeing the result of what happens when people lose interest - companies just can't convince people who don't care.

In either case, when you combine these occurrences with the previous problems, it will lead to the same problem.

Newcomers will be extremely wary to join, both artists and purchasers.

Lost Value Proposition

One of the major Value Propositions of NFT was how it would help Artists create a sustainable income from the value of their work.

Essentially, if they sold their art, and it increased in value later and was sold at a higher price, the artist would gain income from later sales.

Essentially, the artists would continue to gain Royalties.

This seemed like a major boon and value proposition for Artists.

However, artists simply aren't seeing "enough" to make it viable.

What makes it worse is that some of the largest NFT platforms are going backward on this Value Proposition.

As an example, OpenSea has decided that it will no longer "enforce" royalties on secondary sales.

Further, instead of royalties, OpenSea is choosing to go to a "Tip" model.

One thing that I know is that the "Tip" model never makes anyone rich - look at all of the Baristas and Servers who "make a living" on the "Tip" model.

The "Tip" model is not a real Value Proposition, and artists are well aware of that.

NFTs have also been criticized for not being Environmentally friendly.

Many Artists are Environmentally conscious, some are Activists, and there are artists whose work specifically revolves around attempting to save the Environment.

If what "could" have been valuable to artists is stripped away from them, and all that is left are negative value propositions, why would they choose to create new NFTs?

Decline Due To Association

Another challenge that the industry faces is what others associate with the term "NFT".

When you design a new category, as "NFT" was, you want it to stand out in a positive light and it should point out the flaws in other "categories".

However, if your category gets tainted, it can be impossible to overcome.

What have NFTs been getting associated with more and more frequently?

Scams.

It apparently is such a problem that Auction Houses and NFT vendors are actually abandoning the term "NFT" completely!

In order to make the sale more "appealing", they are instead using the term "Digital Art".

This becomes a double whammy for NFTs.

First, the more this occurs, the deeper the associate will be made with "Scams".

Second, instead of NFT being recognized as a "separate" category, it will become a "subcategory" of Digital Art.

What this means is that all of the problems of "Digital Art" will also become associated with NFTs.

One of the reasons NFTs called themselves as such is because they DIDN'T want to be labeled as Digital Art!

This double negative association will make it more and more difficult for NFTs to stay relevant.

The Governmental Nail

Perhaps what will be the true "Nail in the Coffin" for NFTs is the government, specifically the SEC.

Apparently, they have taken their first action and claimed that NFTs are actually Unregistered Securities.

What is so problematic about this?

Investors of NFTs will now have a right of "Rescission".

This could force companies to return to Investors their money PLUS interest.

When you combine everything, it doesn't look bright for the Future of NFTs.

But does that mean the NFTs are Dead?

Maybe not, at least not completely.

I suspect they will continue to exist for a while yet.

Will the environment around them change?

Absolutely!

But it will go through an evolutionary period.

Will it survive that evolution?

Only time will tell, but it will have to convince Artists, Businesses, and Investors first which may be an uphill battle.

nft
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About the Creator

Cody Dakota Wooten, C.B.C.

Creator of the 4X Award-Winning Category "Legendary Leadership" | Faith, Family, Freedom, Future | The Legendary Leadership Coach, Speaker, Writer & Podcast Host | For More of Cody Dakota's Work Go To: https://www.TheLeadership.Guide

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  • M2 months ago

    This was such an insightful article. Iโ€™ve been thinking about NFTs lately, and wondering how the craze died so fast. I find the Seth Green attempt at creating an NFT TV show so fascinating.

  • Liibaan 2 months ago

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  • Macy Dennis2 months ago

    its gorgeous

  • Great Article and Congratulations ๐ŸŽ‰ on your Top Story๐ŸŽ‰๐ŸŽ‰๐ŸŽ‰๐ŸŽ‰๐ŸŽ‰๐ŸŽ‰๐ŸŽ‰

  • Jason A2 months ago

    NFTs are an insult to art and complete garbage. I hope they are their way to obscurity and irrelevance.

  • Scott Christenson2 months ago

    Nice to see this type of article on Vocal. Unlimited supply of items to release NFTs on is a bit of a supply/demand problem. At least cyptocurrencies have a limited number issued.

  • David junior2 months ago

    Well written

  • Liibaan 2 months ago

    Yeah

  • Timta0012 months ago

    What Really makes NFT down is lack of proper orientation and engagements. Well never the less, it was not generally a acknowledged

  • Naveed2 months ago

    Congratulations On Your Top Story

  • Alex H Mittelman 2 months ago

    Well written! Congratulations!

  • Cendrine Marrouat2 months ago

    The problem with NFTs is that the model has never been sustainable. It was too hyped up from the get-go. Without mentioning the fact that people only bought into the craze under a false pretence: It wasn't to support artists, but to make money off of the sale of art that they never created. No wonder AI took over. You don't even have to invest in anything!

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