Gaming and tokenization are driving the maturation of the NFT industry
From tokenizing investment assets to gaming avatars, non-fungible tokens (NFTs) have a range of applications that go beyond digital art, with several projects online despite the 2022 market downturn.
At the NFT.NYC 2023 conference, Cointelegraph’s team learned firsthand from experts, projects, companies and the NFT community how technology is shaping the digital world. Check out highlights from the three-day event below:
NFT games are showing signs of maturing
After years of development, the first batch of NFT-based gaming projects is entering the market, paving the way for a world where real life and gaming will be mixed, companies and developers told Cointelegraph.
“Ten years from now I may be wearing my VR goggles or still using my phone, or probably using a new system that interacts with the metaverse – but I’m going to be able to port my avatar and my NFT items. […] As a user, I’m going to start collecting more digital goods like NFTs, more than even physical goods, like clothes or watches or cars,” Origin Protocol co-founder Matthew Liu explained regarding cross-platform interoperable skins .
Alex Connolly, co-founder of Immutable, has noticed an increase in competition in the gaming sector as more projects and developers seek to address blockchain-based challenges, such as interoperability:
“We see a few alphas. There have been a few things that have been playable here at NFT.NYC. Building games is hard. It takes a while […] to make them good. But I think we’re starting to see some of the best Web3 games ever built. […] I can own my stuff and trade into the game. I think it’s very powerful.”
Linus Chung, Vice President of Product at Origin Protocol, believes that companies trying to bring NFTs into their business should focus on significantly improving one pain point in people’s lives that traditional methods are not solving: “The last bull market has definitely shown that people will go through all the hoops of getting crypto, get a MetaMask wallet because there’s something at the end of that tunnel that’s way better than the traditional way of doing things.”
NFTs for real estate
A real-world application of NFTs is the tokenization of investment assets, and the real estate industry is one of its primary targets, speakers said. Fintech company Ripple, for example, is working with other businesses developing real estate marketplaces and tokenized NFTs, Emi Yoshikawa, Ripple’s vice president of strategy and operations, told Cointelegraph.
“Property is one of the major focuses in the market that we are very excited about. It’s obviously a massive market, but it’s very illiquid and also very inefficient. […] We are working with some companies that are building a marketplace to offer tokenized NFTs for real estate,” she noted, before adding that Japan is helping to lead the tokenization market in Asia.
This year the focus was really on real benefits. I gave a keynote presentation on “The Future of NFT Capabilities” to introduce #XLS20 on #XRPL as an institutional gradebook ideal for real-world asset tokenization. It is just… pic.twitter.com/GApF1sE5BS
— Emi Yoshikawa (@emy_wng) 14 April 2023
A decentralized economy powered by NFTs
Speaking at NFT.NYC, Solon Labs CEO Maxwell Lyman noted that while many projects, blockchains and coins are decentralized, their infrastructure relies on centralized ecosystems, exposing them to security and censorship risks.
“All these protocols, they’re decentralized on the backend. There’s smart contracts live on the Ethereum blockchain or the respective blockchain they’re hosted on. But if you look at their frontend, they’re hosted on centralized servers, an AWS server or something accordingly,” Lyman explained, adding, “We’re a football field away from getting to a point where the space is actually decentralized.”
NFTs can play a crucial role in achieving real decentralization, according to Lyman. “There is something I call global personal capitalism that will be enabled by the proliferation of non-fungible tokens. It is the ability for anyone in the world to be able to control and monetize their personal information, their activities or their creations.”
Uncertainty around NFT regulation
During the event’s panels, legal experts pointed out that NFTs face the same regulatory uncertainty as the broader crypto industry, especially in the US, with a big question in the area of whether NFTs can be considered securities.
Katrina Paglia, Chief Compliance Officer at Pantera Capital, said the venture firm is relying on recent enforcement actions by the Securities and Exchange Commission to gauge regulators’ view of digital assets:
“We’re browsing a lot of the SEC enforcement actions that have come out recently because with each of these things, […] you get a little more information about how they think about applying the Howey test. Until we actually get the clarity that the industry desperately needs and wants, we’re kind of reliant on that for now.”
