Metaverse Use Cases to Catalyze NFT Success?
The Intelligent Insurer #81: Global NFT transactions to reach 40 million in 2027; Insured Finance mainnet now live
Over the past few years, non-fungible tokens (NFTs) have made headlines, captivating audiences both within and outside the digital asset industry. While NFT adoption and activity have decreased since the beginning of 2022, a new report suggests that the market is poised to make a massive comeback, with Metaverse NFTs leading the growth.
The latest Intelligent Insurer will analyze the present scope of the NFT market and projections for the next five years. We will also highlight key factors behind price movements in the NFT market and how investors can tread cautiously as the industry continues to mature. But first, a very exciting update from our development team.
Insured Finance software development update
We are always looking to keep our users in the loop about the progress we are making toward the development of our next-gen digital asset insurance platform. Therefore, we are pleased to announce that our mainnet has officially gone live. Our app is live on the mainnet!
Every feature on the platform works and users can now interact with the Insured Finance Platform on the mainnet. We're confident that our efforts over the past months will benefit users and provide them with a secure digital asset insurance experience.
We are also making last-minute adjustments and fine-tuning the front-end designs on the mainnet to eliminate any possible flaws and ensure that users enjoy top-notch services. We remain committed to providing our community with the benefits of next-gen digital asset insurance in a secure environment.
NFT transactions to hit the 40 million mark in five years
The NFT market has made some of the biggest moves in the digital asset market - given that they had only gained mainstream attention last year. Their growth throughout 2021 was nothing short of phenomenal, moving from a little-known niche to a multi-billion dollar market. While general interest in NFTs has reduced, the market is still attracting investors. It currently has a market cap of over $22 billion.
The hype surrounding NFTs created an exciting revenue channel for businesses, allowing some of the most iconic brands to add NFTs to their marketing strategies. These companies, including Nike, Gucci, Adidas, and Dolce & Gabbana, have raked in hundreds of millions of dollars in additional revenue from NFT sales, emphasizing the mass consumer appeal of digital collectibles. According to data from Dune Analytics, Nike is topping the list with over $185 million raised.
(Source: Dune Analytics)
While analyzing the trajectory of the NFT market over the next five years, a new report from UK- based Juniper Research revealed that global NFT transactions are on track to hit 40 million by 2027. In "NFTs: Future Opportunities, Segment Analysis & Market Forecasts 2022-2027", the firm noted that the number of NFT transactions will increase from 24 million in 2022 to 40 million in 2027. The firm observed that the increase in transactions over the next five years will spur increased adoption, attracting massive capital into the digital asset industry.
Metaverse use cases will drive the NFT market
As per the report, one of the top catalysts to drive NFT growth will be those linked to Metaverse use cases. Juniper noted that the NFT market will grow rapidly if more NFT projects are based on the Metaverse, as the Metaverse is providing immense value to virtual commerce via digital collectibles. The report highlighted that Metaverse NFTs will be the fastest-growing niche in the next five years, with transactions growing from 600,000 in 2022 to 9.8 million by 2027.
According to Juniper, rising demand for immersive Metaverse experiences will fuel the surge in demand for these NFTs. Currently, several Metaverse NFTs are gaining attention from investors, including LAND from Decentraland, Axies from Axie Infinity, and SAND from Sandbox. Several other fast-rising Metaverse NFTs, including NAKAPunks from Nakamoto Games, are also rapidly gaining traction among enthusiasts.
Several major brands, including Nike, Gucci, and Adidas, have also adopted the Metaverse for wearables in the digital universe. Nike took a deep dive into the Metaverse by creating user-driven, fully immersive digital experiences that connect with their physical offerings. The company recently revealed that over 7 million people from around the world have visited its Metaverse store, Nikeland.
The report pointed out that consumer-focused businesses should create more Metaverse NFT-based content to capitalize on this growth. These products must be targeted at capturing the attention of the younger and tech-savvy demographic, who are more eager to purchase novel forms of digital content.
Concerns grow about problems hurting the NFT market
Despite predicting good things for the NFT market over the next five years, Juniper noted that industry flaws will hinder adoption if they are not quickly addressed. For one, the report highlighted environmental issues as a major concern.
A majority of the NFTs available in the market are minted on the Ethereum blockchain, which is notorious for excessive energy consumption. Juniper emphasized the need for NFT projects to create standardized processes that reduce environmental impact. Additionally, Ethereum's upcoming move from the energy-intensive proof-of-work (PoW) to proof-of-stake (PoS) will significantly reduce the environmental impact of minting NFTs.
The report also cautioned about the increasing use of NFTs in illegal activities - money laundering, scams, and fraud. Juniper noted that most brands and institutional investors are hesitant to join the NFT trend to avoid the risk of brand damage by association, due to the role NFTs have had in these illegal activities.
Since the NFT boom in 2021, there have been multiple reports involving NFT scams, most centered on the security of NFTs in crypto wallets and pump-and-dump schemes. The report encouraged increased consumer protection by NFT projects and marketplaces. It also cautions investors to take safety precautions to avoid falling victim to the rising number of NFT scams and thefts. A recent report from the blockchain analytics firm, Elliptic, revealed that over $100 million worth of NFTs has been stolen over the past year.
One of the most effective security measures investors can take to protect their NFTs is adding insurance products to their portfolios. These digital asset insurance solutions, such as the ones offered by Insured Finance, ensure that investors' NFTs, and other digital assets, receive all-around protection at all times.
About Insured Finance
Insured Finance is a decentralized, peer-to-peer insurance marketplace. Users can request customized insurance on a wide variety of digital assets, thereby ensuring full protection. Those fulfilling requests can earn premiums and earn a competitive return on their capital. Claims are fully collateralized and settled instantly.