The non-fungible token (NFT) marketplace ranked as ‘Time’s word of the year’ in 2021 showing the demand boom and justifying the value of these pieces of digital art. Nonetheless, with a swath of newbies adopting the NFT craze, many still lack the knowledge on what NFTs are, and how to buy, mint, and sell them. As the craze picks up in 2022, we discuss here all you need to know about NFTs this year and why the demand will probably skyrocket again.
If you are reading this, then you’ve probably heard about NFTs but for those that haven’t, NFTs are simply digital art including music, photos, art, and any digital file built on a blockchain. Essentially, NFTs allow buyers to show that they own the original copy of these digital files. The same way there’s only one piece of the Mona Lisa, having an NFT means you are the only one with whatever piece of the digital file you hold – copied, duplicated, and any other similar copy of the digital file does not hold the same value as your NFT.
Speaking in an interview, Brad Yasar, CEO of EQIFi, a DeFi company with an NFT offering, explained,
“NFTs are fantastic tools to prove ownership without physical form or possession.”
The NFT craze unlocked last year in March when Beeple, a famous digital artist, sold a collection of NFTs for $69 million, gaining widespread mainstream media attention. Since, the NFT market has grown exponentially from $6 million in daily sales in April to over $100 million daily sales, as of writing. The NFT market value peaked in August with daily sales topping $410 million, representing a 1000% increase in a year.
The adage question is what actually drives the exponential value of these digital pieces of art? For most of the part, the value of NFTs is determined by market factors, meaning the higher the demand for NFTs the higher its price – similar to a wall art piece. Simply, if you buy an NFT, you probably love the art, artist, or just looking to sell it for a higher price in the future. While most projects are launching under the premise that they offer holders a “fun, funky, and exciting” experience, most are just used as tools of investment.
Nonetheless, newer NFT projects are pivoting into the decentralized finance (DeFi) industry to give their digital assets real-life value – not just an emotional feel. Beyond the innovation of scarcity, some NFTs have the potential of changing how these digital assets gain their value – including staking, on-fiat ramps, and other DeFi-related benefits.
Last December, EQIFi, a decentralized finance banking ecosystem, announced a partnership with Polka City, an NFT project offering 3D and augmented reality (AR) video games, to launch an NFT card. The card allows users to leverage the EQIFi DeFi banking ecosystem to buy NFTs directly on Polka City using fiat currency or crypto. According to Brad Yasar, EQIFi aims at “creating NFTs with genuine utility and value via the NFT debit cards” while providing an easy fiat onramp for the newcomers in the space.
“EQIFI is at the forefront of creating NFTs with genuine utility and value with our NFT debit cards. I am most excited about seeing the first application of this technology in Polkacity metaverse,” he added. “The Polkacity inhabitants will be able to use their NFT cards in the metaverse and have corresponding physical cards in real life to use for their everyday expenses.”
“This digital-first approach will be the future of banking and finance in our daily lives and the virtual spaces we visit. We are excited to be pioneers with NFTs, DeFi, and digital banking, merging them together.”
Apart from providing an easy onramp, the EQIFi debit NFT card also allows users to apply for a free bank account with EQIBank, offers real debit & credit card facilities for investors with NFTs, and users are able to spend the native Polkacity token ($POLC) in the real world. This will combine the world of DeFi with NFTs, shaping the future of banking and finance both in the real world and in the virtual spaces we visit.
The rise in demand for NFTs promises a big year for the digital art space in 2022. The development of more valuable NFTs and creating new ways to earn from NFTs will be the defining factor for most of the projects today. Additionally, with multitudes of newbies getting into NFTs, better onramps such as EQIFi are needed to ensure a smooth ride into the space.