In what may be the first substantial impact of Web3, aside from the emergence of cryptocurrencies, non-fungible tokens (NFTs) have taken over the minds of tech-minded consumers this year. As companies continue to launch new collections of unique digital assets, new tools are emerging to facilitate the mass creation of NFTs. To address the emerging demand in this space, G2 has launched its own NFT Platforms category.

G2 launches NFT Platforms category for launchpads and marketplaces

While they’ve actually been around since 2014, NFTs didn’t become a household name until 2021. But if you’re still unfamiliar with the burgeoning technology concept, NFTs are digital assets like artwork, videos, or music; with a blockchain-certified stamp.

There’s a lot more happening behind the technology, but for all intents and purposes, NFTs certify a single original copy of a digital asset that can’t be duplicated or deconstructed. Behind the scenes, blockchain platforms are utilizing cryptographic tokenization to generate these non-fungible certifications.

Companies and individuals can raise money and spread brand awareness by generating and auctioning off NFTs or giving them out in raffles or prizes. There are many ways businesses have commodified these digital assets, and there are many more to come as NFT adoption is still in its infancy. A few early examples include securely storing NFT-certified medical records, NFT-based ticketing systems for travel and events, and using NFTs to track and ensure product provenance and movement throughout the supply chain. 

NFT marketplaces and launchpads attract early adopters

In conducting our research for the newly-launched NFT Platforms software category, two main families of tools stood out: marketplaces and launchpads.

NFT marketplaces are pretty much what you’d expect based on the name. They essentially offer an NFT-powered e-commerce platform for digital content. Artists, companies, and other creators can use these to facilitate the creation of NFTs and begin marketing, selling, and profiting off them.

NFT launchpads are a little more distinct. These tools allow creators to raise funds during the early stages of creating an NFT project. Creators can launch a kind of presale for their NFTs prior to a wider release and use the money raised to fund the remainder of the project. Once launched, the collection can typically be purchased much like other NFTs, either within the launchpad platform or another NFT marketplace. 

Content, collectibles, and continued innovation

Despite trolls—people who intentionally antagonize others online by posting inflammatory, disruptive comments—screenshotting NFTs to use as their own, fans of the concept still believe decentralized ownership is here to stay, even with the copyright complications any new medium provides. This comes in handy whenever a company, artist, or organization has a dedicated following.

It’s no surprise that the National Basketball Association (NBA) and Ultimate Fighting Championship (UFC) are immensely popular sports organizations. Both have partnered with a company called Flow, which provides a white-label blockchain platform and NFT marketplace. 

For example, the UFC’s NFT Marketplace, UFC Strike, offers mixed martial arts fans an opportunity to own the sport’s biggest moments. The UFC used the Flow Platform to generate NFT GIFs of the sport’s most iconic moments and highlights. 

While talking about the integration of NFTs in sports, UFC President Dana White said:

“Sports is such an important part of our lives, and it’s much bigger than we ever realized, until recently. One of the cool things about the NFTs [is] you can own a piece of your favorite sport’s history. I think it connects the fans with something that they love even more.”

In another smart PR move, the UFC, which has been embroiled in a continuous debate over fighter pay, is paying half of the revenue generated from UFC Strike back to the fighters in their respective highlights.

It’s only one example, but there are a virtually infinite number of use cases for the concept. A Grammy-award-winning musician could auction off one-of-a-kind recordings in the form of NFTs. A high-end designer could sell digital apparel, and a video game developer could sell unique characters. A small, unknown artist could gain popularity online and sell a collection to raise money to buy a studio.

Investors taking early advantage of NFT's popularity

It’s no surprise that investors have already taken the opportunity to invest in NFT-related technology businesses. And the growing public interest is showing no signs of slowing. Below are a couple of notable investments over the past year:

OpenSea: OpenSea is one of the largest NFT marketplaces operating today. It boasts more than 600,000 users who have traded upwards of $80 million in NFTs on the platform. The newest round of funding includes $300 million from Coatue Management and Paradigm, giving the platform a post-funding valuation of more than $13 Billion. 

Immutable X: Immutable is another major NFT marketplace platform that received funding last year. The platform offers “zero gas” trading, no centralized sidechains, and “100% carbon neutral” NFT creation. Immutable received $60 million in funding last year, then another round in March of 2022 brought in another $200 Million. This latest round brings the company’s valuation to about $2.5 Billion.

Fractal: Fractal differs slightly from the others but also operates as an NFT marketplace. The difference here is that Fractal focuses on gaming-related NFTs. The company was started by twitch co-founder Justin Kan and lets users buy special games, powers, and gaming content in the form of NFTs. The company received $35 Million in seed funding on April 1, 2022.

Looking ahead

NFT sales totaled about $82.5 million in 2020. That number sounds large until you see total NFT sales exceed $17.7 Billion in 2021. That’s a year-over-year increase of 21355%.

Data Source

As public interest grows, more and more businesses will take advantage. There’s an exciting opportunity ahead for businesses to employ the technology in creative and valuable ways.