Industry expresses confidence in NFT space amid FTX collapse
Even before the FTX collapse, collections of non-fungible tokens (NFTs) have already felt the impact of the crypto winter with trading volumes down 98%. With the FTX debacle, it appears that the once growing space has been hit with the final nail in the coffin. However, industry leaders are optimistic about the recovery of space.
With the huge amount of user funds stuck in the FTX exchange amid the liquidity crisis, users have tried roundabout ways of withdrawing their money. One of the alleged methods of withdrawing balances is to purchase NFTs based in the Bahamas. Many community members criticized the method as it even circumvents bankruptcy laws make fun of NFT tools in the process, paint a negative picture of NFTs.
However, Oscar Franklin Tan, a manager at NFT platform Enjin, believes this is not a fair summary. Tan told Cointelegraph that while NFTs were used, other items could also be used. “It had nothing to do with NFT technology and more to do with the loophole for Bahamian users,” he noted.
The manager is also positive about the NFT space’s survival despite the FTX effects and the bear market. Tan highlighted that the area should focus on how NFTs demonstrate acceptance of digital ownership, new models for content creators and funding of content creation. He explained that:
“Admittedly, there was a lot of hype and over-exuberance for some models, but this is true with all new technologies. The NFT space will surely stabilize and consolidate around the strongest communities, then we will see a second generation of smarter, more sustainable NFT models .”
Tan highlighted that to recover, NFT projects should focus more on utility and building their communities. Avoiding short-term speculation and unrealistic roadmaps is a must. Rather, they should have long-term sustainable value.
Related: The FTX contagion: Which companies were affected by the FTX collapse?
Various players in the NFT space also echoed the sentiment. Jamie Thomson, CEO of NFT game studio Vulcan Forged, commented that NFTs with utility in proven markets are bound to survive. Thomson told Cointelegraph that the same cannot be said for NFTs based on speculation and bragging rights. However, the manager said that these types of NFTs will “suffer more due to tighter 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 a project’s functionality or user presence, there is less concern about price furcations. Essentially a game object, access to certain features, access to added value.”
Meanwhile, NFT artist Johnathan Schultz believes that the era of useless NFTs 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 for the space to survive, it needs to grow out of what he describes as the “memeification” of things. This means building projects that matter and help the whole place.
With FTX’s NFT marketplace caught in the middle of the company’s implosion, Nick Rose Ntertsas, the founder of NFT platform Ethernity, offered suggestions on how to make it better. Speaking to Cointelegraph, Ntertsas said that FTX’s centralized exchange-based model for the NFT platform was closed. He explained:
“This model should have been democratized and transparent. NFTs should ultimately go cross-chain and be interoperable, not cut by one gatekeeper, something we are working on and passionate about.”
Contrary to the other sentiments, Ntertsas believes that there is not one thing that NFT projects should focus on, as different projects will have different goals. However, the executive wants to see more projects that challenge the space to “rethink what’s possible with NFTs.”