According to NonFungible and L’Atelier, the turnover of transactions with non-exchangeable tokens (NFT) increased from $62 million in 2019 to more than $250 million in 2020. The number of active wallets increased by 97%.
NFTs are unique digital assets of the ERC-721 standard, serving as collectible items: from game cards to luxury items. Last year, the NFT market showed amazing growth. The use cases for non-exchangeable tokens have expanded, the number of buyers is growing, and many traders have made six-figure profits. NonFungible CEO Dan Kelly said 2020 was a “historic year” for NFT in many ways.
The total value of all NFT transactions increased from $62 million in 2019 to more than $250 million in 2020. Last year, sales of digital art works using NFT alone grew by 2,800%. Major brands such as Turner Sports and Swiss watchmaker Breitling have joined the industry, contributing to the popularity of this type of digital asset. Nadia Ivanova, Chief Operating Officer of L’Atelier, said that the well-known brands Nike, Louis Vuitton and Formula 1 have also started using NFT for commercial purposes. Ivanova expects that even more companies will enter this industry, which intend to find new ways of virtual interaction with customers, while making a profit.
The researchers found that between 2019 and 2020, the total number of active wallets using NFT increased by 97% – from 112,731 to 222,179. Given the rapid development of NFT over the past year, the number of wallets may increase further in 2021. Virtual art has become the most dynamic segment, accounting for 24% of the NFT market. In 2019, the total sales of virtual art objects using NFT was $456,885, and in 2020 this figure increased to $12.9 million. Last year, games in the NFT sector accounted for 23% of the market and also provided a large number of sales. However, as for sports-related collectibles, they accounted for only 13% of the total trading volume in the NFT market.
The growth of this industry is due to the increase in user activity on the Internet during the pandemic. People are willing to spend more on virtual goods and services. According to Ivanova, large companies are taking advantage of this trend, as the transition to “virtual finance” is already becoming obvious. This lays the foundation for the creation of economic infrastructure and financial products that support NFT. Analysts believe that with the deployment of Ethereum 2.0, the NFT industry will also improve.
The authors of the report concluded that in the coming years, non-exchangeable tokens will become one of the leading asset classes for the virtual economy, both in terms of their financial value and practical use. In addition, NFTs can become the “engine” of economic activity in the virtual world. However, the CEO of Terra Virtua, Gary Bracey, believes that it is precisely because of the great activity in the NFT industry that it needs to be particularly careful.