Even before the collapse of FTX, non-fungible token (NFT) collections have already felt the impact of the crypto winter, p trade volume drops by 98%. With the FTX debacle, the once-growing space appears to have been hit with the final nail in the coffin. However, industry executives are optimistic about the space recovery.
With huge amounts of user funds stranded on the FTX exchange amid its liquidity crisis, users have been trying roundabout ways to withdraw their money. One of the alleged methods of withdrawing balances is buying NFTs based in the Bahamas. Many members of the community have criticized this method because it circumvents bankruptcy laws mocking NFT tool in process, paints a negative picture of NFT.
However, Oscar Franklin Tan, CEO of NFT platform Enjin, believes this is not a fair summary. In an interview with Cointelegraph, Tan said that while NFTs were used, other items could also be used. “It had nothing to do with NFT technology and more to do with this loophole for Bahamian users,” he noted.
The CEO is also positive about the survival of the NFT space despite the effects of FTX and the bear market. Tan emphasized that the space should refocus on how NFTs demonstrate the adoption of digital ownership, new models for content creators and the financing of content creation. He explained that:
“There was a lot of hype and too much looseness with some models, but that applies to all new technologies. The NFT space will surely stabilize and unite around the strongest communities, then we will see a second generation of smarter and more sustainable NFT models.”
Tan stressed that for NFT projects to recover, they should focus more on utility and building their communities. Avoiding short-term speculation and unrealistic plans is a must. Rather, they should have long-term sustainable value.
Various players in the NFT space also echoed the sentiment. Jamie Thomson, CEO of NFT game studio Vulcan Forged, noted that NFTs with use in proven markets must survive. Thomson told Cointelegraph that the same cannot be said for NFTs based on speculation and hype. However, the executive said that these types of NFTs will “suffer more due to gentler hands” as users wait for a better market. Thomson went on to say:
“Less speculation, more mandatory utility. As with tokens, if the NFT is critical to the project’s functionality or user presence, then there is less concern about price splits. Essentially a game item, access to certain features, access to added value.”
Meanwhile, NFT artist Johnathan Schultz believes the era of NFTs without utility is waning. “That’s why we’re seeing more projects with a lot more use cases and utility,” he said. Schultz also told Cointelegraph that if the space is to survive, it needs to outgrow what he describes as the “memeification” of things. This means building projects that matter and help the whole space.
With FTX’s NFT marketplace in the midst of company implosion, Nick Rose Ntertsas, founder of NFT platform Ethernity, offered suggestions on how to do it better. In an interview with Cointelegraph, Ntertsas said that the centralized exchange-based FTX model for the NFT platform was closed. He explained:
“This model was supposed to be democratic and transparent. Ultimately, NFTs should go across the chain and be interoperable, not silenced by one gatekeeper, which is what we work on and what we enjoy.”
Contrary to other views, Ntertsas believes that there is no one thing that NFT projects should focus on, as different projects will have different goals. But the executive wants to see more projects that challenge the space to “rethink what’s possible with NFTs.”