If there’s one thing that is capable of luring 2021 away from all the gloomy pandemic vibes, it's NFT. Not only are these digital assets giving us a new dimension to flex and express ourselves, they also keep entrepreneurs and investors busy inventing a brighter future.
Along with NFTs, the metaverse and web3 make their way to our daily lexicon, bringing science-fiction fantasy to reality and fostering economies that transcend borders. Suddenly, we feel wild and young again. Suddenly, the web is delightfully weird again. With NFTs, metaverse & web3, we are given the chance to flip the script on today's broken internet.
As we are reaching the end of 2021, let's take a moment to reflect on this eventful year for NFTs. Fasten your seatbelt, because this is going to be an exhilarating ride!
NFT SALES: THE WILD, THE WEIRD & THE WONDERFUL
All conversations about NFTs eventually lead to talking about sales at some point. So there you have it! NFT trading volumes across all verticals have been on a spree this year, expected to reach a whopping $17.7 billion by the end of the year. If we may host an AMAs (say, Arianee Market Awards) with sales being the sole criterion, the awards would be as follows:
- Sector of the year: Art ($2.05 billion as of December 15)
- Project of the year: CryptoPunks ($1.77 billion as of December 15)
- NFT of the year: Everydays: PAK's NFT “The Merge” ($91.8 Million)
- Transaction of the year: BAYC #3547 (accidentally sold for $3,000 instead of $300,000)
Is it another tulip or dotcom mania you might ask? We'll take an educated guess and say no.
The biggest achievement of NFT in 2021 is that it finally managed to recruit a critical mass of newbies who were neither attracted to crypto nor decentralized finance in the first place. By investing in game/art NFTs and finding a community to call home in the process, young adults happily go down the rabbit hole of crypto. As more of the public embraces crypto, it would make tokenization and digital ownership more ingrained in our daily lives, paving way for the development of the metaverse as we will discuss later in this article.
When compared to the crypto fever in 2017, the underlying infrastructure of NFTs today has become much more advanced, built upon an existing community (e.g. sneakerheads, sports clubs, fashion, music) and serving practical use cases (e.g. access pass, loyalty, digital passport). At the same time, the user experience has been made much easier for the average user.
All in all, adoption rate: checked. Liquidity: checked. Infrastructure: checked. Awareness: checked. Participants: checked. What's left to do is to develop killer products. The more we dive into NFTs, the less the conversation is about expensive JPEGs, and the more it is about communities, potential revenue-sharing models and use cases, which brings us to the next point below 👇.
THE RISE OF WEB3 COMMUNITIES
Communities of culture, lifestyle, and solidarity
In many ways, the NFT culture is bringing back the child inside everyone of us with avatars, pseudo names, slang and crypto acronyms (e.g. gm, wagmi) that leave outsiders scratching their head wondering if age is creeping in. Beneath this vibrant culture are countless social clubs and PFP communities united by the tokens they own.
The robust growth of these communities in 2021 indicates one thing: the modern capital is no longer present in the accumulation of material possessions, but rather rooted in being in the know and having tastes. NFT communities are cultures, lifestyles, and solidarity. For example, World of Women’s manifesto is to promote diversity and female empowerment in the NFT space, supporting philanthropic causes through a percentage of their primary sales. Meanwhile, Lobby Lobsters raised $4M to fight for better policies surrounding cryptocurrency.
The micro-economies that fuel the decentralized internet
When you look closer at these communities, you'll find that one of the primary unifying forces behind them is the belief that decentralization with built-in financial incentives offers a compelling alternative to the centralized system we are having today (where communities contribute without rewards). In web3, for the first time ever, all stakeholders can have a fair share of revenue.
New times call for new approaches. For brand owners, marketing practitioners, or anyone that cares about your brand growth, it's time to think about your audience in the plural form. Instead of targeting individual consumers, we should shift our focus to these taste communities. Because at the end of the day, everyone is part of different social networks that they rely on to decide what to buy or pay attention to.
METAVERSE: THE NEW PLAYGROUND FOR FASHION & LUXURY BRANDS
Besides NFTs, “metaverse” is another buzzword in 2021, with billions of dollars poured into the development of the virtual world. On Crunchbase, metaverse-related projects have raised nearly $10.4 billion so far this year across 612 deals, with Epic Games leading the pack with a funding round of $1 billion. Gaming makes the bulk of funding, and there's a good reason for it.
Once a popular pastime, gaming has now become a way of life for many people. A report by Newzoo revealed 8/10 gen Z and millennial consumers are playing games, spending an average of about 7 hours on the hobby per week. As people are spending an increasing amount of time on gaming, virtual realities, as well as on other digital platforms for work or leisure activities, adopting multiversal identities is no longer a new concept. This is opening up a unique opportunity for fashion & luxury brands to connect with high-value younger cohorts that they cannot afford to ignore. Virtual fashion is underway, giving people a brand-new way to ace the style game without costing the earth.
Starting from February, RTFKT set a record-breaking NFT sale. Jacob & Co followed with its virtual watch sold for $100k at auction. In June and July 2021, Paris Fashion Week became the first in the world to offer NFTs to accredited members, showing that not only is Paris always at the forefront of innovation but also that NFT are not just for crypto-addicts.
Summer 2021 also counted Givenchy Beauty, Gucci, Burberry, Dolce & Gabbana, Louis Vuitton, Ralph Lauren, and Balmain among the early adopters of NFTs in the metaverse.
In Q4, Balenciaga turned up the heat by teaming up with Fortnite for a digital-to-physical partnership. And just when you think you’ve seen it all, Adidas made waves when unveiling a zeitgeisty metaverse strategy in collaboration with a host of big metaverse players: Bored Ape Yacht Club, Gmoney, and Punks Comics. 2021 ended on a sweet note from AZ Factory, who launched exclusive silhouettes in NFT collection to pay homage to Alber Elbaz.
According to the State of Fashion 2022 report by McKinsey x BoF, Metaverse Mindset and Product Passports are among the 10 biggest themes for the industry in 2022. We predict that 2022 will be a year shaped by social capital, environmental credits and cultural savviness enabled by disruption from web3 technologies. We'll move from a consumer-focused model to a community-and-creator-focused model.
There are tons of blue-sky experiments and discoveries to make. To the dreamers and adventurers out there, innovate your heart out!
Discover 10 key milestones of Arianee in 2021.
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