After a round of NFT, how does LD Capital see the development of NFT

原文标题：《 元宇宙之门的奥秘：纵览 NFT 进化史与发展趋势 》

Original source: LD Capital Research, Link

NFT, the English full name is non-fungibletoken, meaning non-homogenized token.

It is indivisible, non-interchangeable and unique. Currently, NFT is mostly used to represent encrypted art, game items, virtual goods, and tickets.

In March 2021, artist Beeple's Everydays: The First 5000 Days sold at Christie's for $69.34 million, THE third highest price paid by a living artist at auction.

NFT started out as "color coins" as a concept on the Bitcoin chain. Later, blockchain players implemented Spells of Genesis and Rare Pepes on Counterparty, Bitcoin's extension platform, to save non-homogeneous content. In 2017, Ethereum's NFT and ERC-721 token standards were launched, and NFT began to make a name for itself in Ethereum. As the market winds shifted, NFT entered the precipitation period. Since 2020, NFT has entered a period of prosperity, prospering in Ethereum, Ethereum side chain and other public chains, becoming the ecological star.

There are four core features of NFT: interoperability, tradability, real holding and scarcity, immutability, and split substitution.

• 互操作性

The same token standard allows NFT to be distributed across a variety of different DApps. For example, items in a game platform can also be distributed in   Opensea  On sale. It can also achieve the function of asset reuse, and the characters and props in A game can be used in B game.

• 可交易性

The high liquidity and various NFT trading platforms brought by DEFI make NFT trading more convenient and diversified.

• 真实持有和稀缺性

Holds the NFT unique, the same version of the NFT, the block chain label is different. The NFT in the Web3 wallet, only the owner has the right to handle the NFT, and no one can delete or transfer the NFT from the owner.

• 不可篡改和拆分替代性

NFT contract Settings can be set on the chain with features such as unalterable and additional issues, and ERC721 token properties cannot be split as ERC20 tokens do.

The characteristics of NFT have led to the various application scenarios of NFT today:

• 链上资产：加密货币、加密艺术品，区块链游戏内装备、宠物等。

• 链下资产、凭证上链化：例如身份等证件、奢侈品证明、比赛 & 展会门票、房地产证明等凭证资产的上链。

NFT origin

Started in 2012 with the concept of bitcoin colored coins, which consist of small denominations of bitcoins, the smallest unit is satoshi. Implement the symbolic and other uses of various assets through the notes on the chain.

Key points: The core of the use of colored coins requires users to have a strong consensus on colored coins. Once someone disagrees that colored coins can represent assets, the consensus will collapse and the value will return to zero.

In March 2015, Everdreamsoft released the first block chain card in the game of Spares of Genesis, and in August 2015, SOG launched a crowdfunding campaign with tokens called Bitcrystals. In April 2017, Everdreamsoft launched the world's first blockchain-based card game with Abills of Genesis.

BitCrystals tokens (in-game currency) were first released on the Bitcoin chain, taking a multi-link approach, and then mapped some tokens across the Ethereum network. At the time, SOG was a pioneer in blockchain preservation of game items and blockchain crowdfunding.

Image credit: spellsofgenesis.com

In 2016 & have spent meme  Players make rarePEpe on the Bitcoin chain through CounterParty. Players can create and publish rare Pepe Frogs and trade them through the Bitcoin chain.

RaRePEpe is closer in concept and form to today's NFT artwork, with a variety of original Pepe works available on the site, and the development of memes and crypto works that blend various artistic styles, pop, psychedelic, classical, abstract, and more.

Image credit: Rare Pepe Directory

The companion app launched Rare Pepe Directory, Rare Pepe Wallet, and Pepecash for purchasing Pepe.

NFT bud

In June 2017, NFT for Ethereum began to appear.

Launched by Larva Labs, a company based in New York City, Cryptopunk is a collection of 10,000 algorithmically generated Cryptopunks, each one unique. Any Ethereum wallet can be picked up for free, and soon all Cryptopunk will be picked up.

The secondary market since trading Cryptopunk heat increased, the market began to accept the concept of crypto art unique. The ERC-721 token standard didn't exist yet, but Punk wasn't part of ERC-20 either, it was a combination of the two. It created a precedent for non-homogeneous NFT tokens.

#7523 11,754 Million USD

#7804 4200ETH

After Cryptopunk, Dieter Shirley, CTO of Axiom Zen, was the main initiator of the ERC-721 token standard in September.

CryptoKitties, developed by Axiom Zen in October 2017 (Fattish Cat & NBSP; / CryptoCat), a blockchain-based NFT game that allows players to adopt, breed, and trade virtual cats.

CryptoKitties is the first DAPP to use the ERC-721 standard.

CryptoKitties "Dragon"

CryptoKitties comes at a time of bull market. Some people made huge profits by feeding Cryptokitties in a short period of time, so they got more traffic. Even at that time, Cryptokitties had too many users and blocked Ethereum. In just two months, the transaction volume reached the peak of 21.9 million dollars, and the most expensive CryptoKitties "Dragon" sold at 600ETH. It exploded the concept of blockchain gaming at the time.

Source: nonfungible.com

Sedimentation period -- 2018

Cryptokitties parent company Axiom Zen founded a new company Dapper Labs (Flow Public Chain, NBA Top Shot  In the same year, NFT trading platform OpenSea was born, which has the highest market share at present.

After the CryptoKitties craze, there was a craze for crypto-celebrities. Buy a celebrity card portrait and wait for the next buyer to buy your celebrity portrait at a higher price, earning the difference (BitClout  Similar to the concept, but different) is essentially a drum pass game.

Thanks to the wealth effect of CryptoKitties, a lot of blockchain games and supporting platforms emerged in 2018. However, few blockchain games or NFT related platforms that were founded in 18 or 19 years have survived to this day.

Born in 18, 19 & NBSP; Enjin, Decentraland,   SuperRare, Cocos-BCX and other NFT platforms and games have been able to survive until now because of their user base and technical strength.

Source: nonfungible.com

The data in the figure are the weekly active addresses of NFT products, the weekly interaction with smart contracts, and the weekly dollar transaction volume in 18 and 19 years. The number of smart contract interactions increased slightly and the number of active addresses increased significantly, while the volume of transactions fell by more than 80% compared with 18 years ago.

Because at that time only individual projects (CryptoKitties) formed local hot spots, did not form a real industry trend. With only industry education and not a complete exit, NFT's followers remain in the crypto geek community.

From the end of 2017 to the beginning of 2018, it was the initial burst period of NFT and also the bubble period. In 2019 and early 2020, it's about digesting the bubbles that were created at that time, and it's also a sedimentation period.

NFT qualitative change

From 2020 to 2021, the combination of NFT and DEFI has realized the launch of GAMEFI, FLOW public chain, the launch of NBA card collection, and then the outbreak of the primary and secondary market of crypto artworks and the exit of NFT. Thus came NFT's second moment of revelry.

In May 2020, Whaleshark, a celebrity in the NFT circle, released his social traffic pass $WHALE on Ethereum. Whaleshark's own NFT collection is the base value of Whaleshark's tokens. The value of NFT adds value to the token, combining NFT and DEFI from the other direction.

WHALE holdings of NFT: 0 xe7079eec020ddfc3f1c0abe1d946c55e6ed30eb3

August's appearance of Gamefi, from   ConsenSys  Director Jordan Lyall's tweet "The DeGenerator" (making fun of The "Air Coin Project", which dispense coins within minutes) started, and someone created a token for it, called Meme, which was dropped by air. As long as early members of the Telegram Group, they will be able to receive 350 Meme tokens.

Because of the strong community consensus and cohesion, $MEME, a token that was established as a joke and was difficult to define in itself, became an NFT token with matching application scenarios.

During the development of the project, various ways of playing have been developed. For example, users pledge Meme tokens to earn non-transferable pineapple points, through which the pineapple points can be exchanged for NFT.

After the combination of DEFI and NFT, plus the MEME element, the price of $MEME skyrocketed, with the price of the token rising to a high of over 2000 U within a few U in a month. Since then, Meme has been working with artists to launch new cards for players to redeem. At the same time, Beeple Twitter said it would launch NFT together with Meme.

Image credit: dontbuymeme.com

September & have spent DEGO  A large amount of user traffic has been obtained through Twitter NFT airdrop activities, while users holding NFT of DEGO airdrop can participate in NFT mining, and participate in project bonus and management. Users' NFT can be traded freely on the secondary market. Through Dego, more players are exposed to the different ways of playing NFT.

The NFT boom in the third quarter of 2020 has made the crypto world familiar with NFT.

With the launch of Flow public chain, NFT begins to enter the public horizon, foreshadowing the great bull market of NFT in 2021.

Flow is a star public chain specially developed for NFT, games and digital assets. Investors: Warner Music Group, Google Ventures, etc. Partners: NBA, Cryptokitties, Moto GP, UFC, Ubisoft, etc.

NBA Top Shot is a star card game developed by Dapper Labs, built on the Flow chain and authorized by the NBA. The project will start open beta testing for invited users in August 2020 and open beta testing in October. In January 2021, the number of users exploded, and the total turnover exceeded CryptoKitties on January 26, 2021, reaching $29.48 million.

The star card block chain can transform the video into NFT, and the wonderful moments recorded are immutable and unique, so the price of the star card in the secondary market skyrocketed.

During the same period, a large number of NBA stars and sports KOLs were active in various related activities on social media, making NBA Top Shot a hot spot. Spurred by them, a large number of NBA fans also began to understand NFT, and began to actively participate in card raffle activities and secondary market transactions. The NBA has even set up a Blockchain Advisory Committee.

In February, the popularity of NFT was in Hashmask, an encrypted art NFT generated by an algorithm, with a total of 16,384 pieces. The price was set by the joint curve mechanism, and the lower the inventory, the higher the purchase price. The last three pieces of Hashmask were sold at a price as high as 100ETH. The 16,384 one-of-a-kind pieces of crypto art sold out in five days. Adding to the fun, HashMask uses a blind box system so no one knows what they've bought until it's sold out.

A Hashmask is a combination of different elements, some of which limit the quantity, giving it a rarity that drives up the price so much that everyone is looking for a rare Hashmask. Among them, the highest price is 9939 Hashmask, which is priced at 420 ETH, and the second is 6817, which is also priced at 300ETH.

With Hashmask Hashmask - 9939-6817

Then in the primary market appeared a lot of similar rules of NFT blind box, the same algorithm generation, joint curve price sale, but in the secondary market is ordinary performance. Only a few NFT projects with relatively distinctive features have been sought after.

An old project of Mooncats in August, 2017, was recommended by KOL in NFT circle, and nearly $60W of gas cost was generated within three hours, all of which was for participating in the Mooncats collection. Mooncats have also been trading well for some time in the secondary market.

Meebits -- Larva Labs' third NFT project, with a total of 20,000 Meebits, some of which are free to Cryptopunk and Autoglyphs holders. The remaining Meebits are sold in the form of LBP auctions.

Meebits will be used more widely than Cryptopunk, as 3D modeled movable action figures, and the ERC-721 contract standard was created. The goal is to be able to play in Metaverse as your own on-chain avatar.

After the launch of Meebits, on-chain transaction value and volume peaked at USD 176,042,317 on May 9.

Source: nonfungible.com

The hottest NFT of late is Bored Ape Yacht Club. The initial selling price is 0.08eth, and the fixed price is also similar to the blind box mechanism of Hashmask. Many people buy for the star power and the low price. In the early stage of the project, it was only because of the recommendation of KOL that the heat reached. But since then, thanks to the tight-knit community and the wealth effect, Bored Ape Yacht Club has maintained a high trading volume and topped the NFT's trading list for the most recent week.

External push

In addition to the popularity within the crypto world, the fact that NFT is widely understood and engaged by the public is an important reason why NFT is so popular today.

Source: Google Trends

According to data from Google Trends, when Beeple's Everydays: The First 5000 Days was auctioned, THE global search index for NFT reached a periodic high and then fell back. In mid to late April, many stars and KOL released NFT, once again let NFT by the public's attention, the search index also increased.

After the Beeple auction, stars and artists from various circles, such as Snoop Dogg, Eminem, Twitter CEO Jack Dorsey, Edward Snowden, Paris Hilton, Yao Ming, etc., have released NFT through various NFT platforms. Let more people understand that in addition to NFT in addition to encryption art and games, but also can be traffic realization, fan economy tools.

Through the series of events in March and April, NFT completed the breaking circle, allowing NFT to go to the outside world and leave the crypto world to gain public attention.

Why did NFT explode

Technological progress has solved many fundamental problems in this NFT bull market

The purpose of the development of Flow chain is to solve the problems caused by Ethereum congestion, such as poor experience and high barriers to use. The emergence of various Layer2 and other public chains has also largely taken some of the congestion out of Ethereum. At the same time, the use of NFT has increased a lot of scenarios, there are encrypted art, games, music, and even NFT tickets can be used.

A number of excellent NFT projects have attracted new users during this bull market

Traditional blockchain game projects can attract active users through play-to-earn and the entertainment of the game itself. For example, AXIE Infinity can Earn SLP tokens by playing games. Many players in Southeast Asian countries are attracted to Play AXIE and Earn more than their salary through AXIE. There are also NFT products that can be traded through OpenSea or other NFT exchanges, increasing the liquidity of NFT trading and allowing an artist to generate income by creating NFT.

Dego and Meme let more people participate in the NFT market through GameFi.

A combination of traditional IP, traffic stars and blockchains, such as NBA Top Shot, traditional star cards and blockchains, can be officially licensed. It also attracts fans of NBA players and former star card collectors in addition to blockchain users. F1, MOTO GP, UFC and others have successively combined with blockchain to release NFT, games and other on-chain products. The NBA's Zion Williamson and SLAM magazine jointly launched the NFT for sale on OpenSea. Snowden also published the NFT on Foundation platform with the auction price of 22,24ETH.

Defi success and the wealth effect of NFT itself

Defi's success has brought sufficient liquidity and users to the chain, and the subsequent NFTs have had fewer obstacles. At the same time, the promotion within the crypto world also makes NFT appear in the user's horizon, and NFT projects invested by major exchanges and investment institutions appear one after another.

One key to breaking the circle is the wealth effect brought by the NFT, from the NBA Top Shot Neyzion, James a star card selling for hundreds of thousands of dollars. Beeple's NFT sold for $69.34 million. Let the traditional world understand the value of NFT and NFT can be applied in the direction. Celebrities inside and outside the circle have begun to make their own NFT, through fans and their own traffic to monetize the NFT.

Incremental markets, flow economy

In a bull market, the market can keep going up and stay in an incremental market. People and money from outside the circle continue to participate in the market in various ways. Some of that money will also go to NFT.

At the same time, various stars, artists, KOL, well-known IP, etc., are good at playing the role of flow economy. When the NFT is launched, fans or enthusiasts will bid on the NFT, which can fetch a high price and help the NFT grow.

The future has to

Although NFT has been widely popularized and applied this year, the current market heat is more focused on the first and second level cryptographic art application market. In addition, cryptographic artworks will be hot after being hyped online, but after a period of cooling, there will be no application scene and community basis leading to a decrease in heat and trading volume, or even nobody trading, leading to the situation that assets are idle and cannot be traded.

At present, NFT in other application scenarios is still rare. At present, only in combination with the fully liquid ERC-20 can NFT bring really strong liquidity. Like Teller, each level of NFT has a corresponding amount of ETH behind it to support its value. Aavegotchi's little kid needs it. AAVE  Atoken. Uniswap V3 also NFTizes LP tokens. After that, NFT will have more DEFI projects that combine virtual tokens, assets, real assets, bills, etc., the art of decentralized finance.

Metaverse is the ideal NFT app solution for the current NFT's most popular cryptographic art and collectibles, which lack mobility and lack of real-world application. Metaverse's identity, social, freedom, diversity, economy, and transactional elements require NFT and blockchain technology to address some of its pain points.

With the ERC-721 standard, the technical interface can be opened, and users can add content freely, each content will be an NFT. Trading in the internal economy is through the exchange of tokens like ERC-20 and ERC-721. A large NFT exchange like OpenSea can become a street convenience store, an art auction exchange, or a furniture store. You can buy a variety of NFTs to build your own space and change your profile and tools in the Metaverse.

Space (or land) in Metaverse is NFT, and like real estate NFT in the real world, tokens can be traded freely through NFT. (The Sandbox sold out in 15 seconds)

If other 721 token standards can be accessed in Metaverse through the open technology interface, it can also solve one of the key issues of the current cryptographic artwork -- the usage scenarios of the artwork, and achieve asset reuse.

When you purchase an encrypted artwork, the function of the encrypted artwork can only be displayed in the wallet (currently some wallets and block browsers do not support displaying NFT) or can only be viewed and traded on trading platforms such as dApp and OpenSea, which means that the NFT you purchased can only be left in idle state, and it is difficult to display or use.

But if you can get NFT art into Metaverse, it's only if NFT developers model in Metaverse together. You can display all the NFT you've bought. This can be achieved to complete the reuse of assets, can be encrypted art NFT use function magnified.

In the not too distant future, we may be able to present the Metaverse of the world of swords and the number one player.

You run Meebits through a clothing, furniture, or shoe store in the Metaverse, and the NFT purchased in the store can then go offline to a physical store for real items.

Through that world, you can be a curator of your collection of encrypted art. Free to trade in cryptocurrencies, Uniswap is like a stock exchange in Metaverse, trading tokens through your Web3 wallet. You can also play CS, GTA, NBA, FIFA, and other games in Metaverse.

With Metaverse, you can immerse yourself in social, entertainment, adventure, etc., and live your life in it like a Sims, owning your life on the blockchain.

In the DEFI world NFT becomes another expression of decentralized finance.

In the near future, NFT will be the gateway to the virtual world and Defi's artwork.

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