How much is that JPEG in the window?
On the back of a week that saw BTC mount a ~$10k resurgence, a nascent crypto market has exploded to jaw-dropping proportions. Non-Fungible-Tokens (NFT) have captured the public’s imagination over this year, propelled to the mainstream by the likes of Beeple, whose digital artwork fetched a mammoth $69m on auction at Christie’s.
Beeple’s collage of his first 5000 daily artworks
Unpacking NFTs
Simply put, NFTs are unique blockchain contracts, which cannot be replicated or reproduced. This token standard has enabled the proliferation of new platforms for artists to monetise digital artwork without the need for intermediaries (such as auction houses, ironically enough).
Enter CryptoPunks. The series of 10,000 generated pixelated avatars, first launched in 2017, has stolen the limelight in recent days as Three Arrows Capital went on a buying spree across the NFT spectrum, igniting a wave of FOMO that saw rare NFT’s fetching upwards of $2m over the weekend. It’s also worth noting that back in early May, a collection of nine punks were acquired for $16,9m, also through Christie’s. With their sudden, exponential rise in value after arduous months of downturn, one must surely wonder — have the bulls returned to graze? Regardless of your sentiments toward NFT artwork, its becoming increasingly apparent that blockchain-based creations are disrupting the traditional fine art industry in a way that speaks directly to the brazen, rebellious nature at the beating heart of crypto’s ethos.
Top CryptoPunk Sales - Larvalabs.com
Novel use cases
While NFTs are usually associated with art, their value proposition extends far beyond the humble JPEG.
Projects such as Decentraland (MANA), Axie Infinity (AXS), and Aavegotchi (GHST) have pioneered the implementation of NFT’s in the form of GameFi — blockchain-based games where players can earn tokens through gameplay using their customizable NFT characters. In the expansive Axie metaverse, for instance, players can earn tokens by winning battles against other players; breeding and selling their unique, (and incredibly adorable) Axies, in addition to a host of in-game rewards and collectibles.
AXS specifically has led the GameFi charge in 2021, rocketing from $5 on 1 July, to an eyebrow-singing high of $53 by the end of the month.
Why now?
Alongside the rise of our beloved BTC, ETH has proved even more bullish in recent days, as token holders anticipate the launch of the London hard fork slated for 5 August. The upgrade brings with it a host of changes, chief among them being EIP-1559, a protocol that burns a percentage of gas fees paid to miners, essentially making ETH a deflationary asset.
One only needs to glance at the ETH daily chart to understand the importance of the London fork, as crypto’s second largest token printed a record-breaking 12 consecutive green candles as it charged from $1800 to $2700 at the time of writing.
Tradingview.com
It’s probably a massive understatement to say that we live in interesting times. From its humble beginnings as a seed of an e-cash idea in the brain of an anonymous coder back in 2009, we are now witnessing the upheaval of traditional institutional paradigms beyond simple finance. Blockchain, in small but steady strides, is weaving fresh, golden threads of value and culture into the fabric of our collective history. With the launch of EIP-1559, transacting NFTs on the Ethereum network will become cheaper, faster, and more accessible, creating the perfect storm for disruptive tech to disrupt even further.
Beeple (2020)