TON: NFT Landscape
Key Findings:
Collectibles used to dominate the crypto industry, but now utilities have become the most active sector.
- The NFT market generated approximately $24.7 billion in organic trading volume in 2022, a slight decline from the 2021 total of $25.1 billion.
- DappRadar observed a significant increase in the number of NFT trades recorded in 2022, reaching approximately 101 million trades compared to the previous year’s 58.6 million.
- Despite experiencing a steep decline in asset prices and trading volume, ConsenSys reported that NFT trading activity continued to trend upwards with a monthly volume of $318 million in December 2022, reflecting a 35% increase compared to the preceding month.
NFT on TON: The Current Landscape
NFT Checklist:
Most types of NFT are implemented in TON Ecosystem, except for metaverse NFTs.
It is worth noting that the active development and improvement of the NFT standard for TON began only at the beginning of 2022. During the year, ecosystem participants managed to implement a significant number of projects and technologies in this direction.
There has been a surge in interest in TON and Toncoin, resulting in a tenfold increase in trading volume compared to November and a doubling of peak price. After this peak, Toncoin has stabilized at 2.2–2.4 USD, compared to 1.4–1.6 USD in November. Its ranking on CMC is currently between 20 and 24, compared to previously being in the top 30. The number of wallets and overall network activity has shown impressive growth, increasing between 20% and 30% month-over-month.
Over the last five months, the average monthly number of trades has been more than 30,000, with an average monthly volume exceeding 8.5 million Toncoins. The number of unique buyers per month amounted to 4,500, and the average price was 16 Toncoins.
The NFT Market in 2022
Based on data from DappRadar, the NFT market yielded an estimated $24.7 billion in organic trading volume in 2022 across various blockchain platforms and marketplaces, marking a slight decline from the 2021 total of $25.1 billion. Although the market experienced increased activity and interest in tokenized assets, such as those offered by LooksRare and X2Y2, overall trading volume remained stable throughout the year. However, DappRadar observed a significant increase in the number of NFT trades recorded in 2022, reaching approximately 101 million trades in contrast to the previous year’s 58.6 million. Forbes reported that 2022 was a year of exploration, where new projects and uses emerged to test the potential of NFT technology. The year witnessed the first true hype cycle of the NFT market, peaking early in the opening months before experiencing a steep decline in asset prices and trading volume. Despite this downturn, ConsenSys reported that NFT trading activity continued to trend upwards with a monthly volume of $318 million in December 2022, reflecting a 35% increase compared to the preceding month.
In 2022, several NFT startups including Unico, Candy Digital, OneOf, Metaversal, Mojito, ConsenSys, and DOGAMi achieved significant success in the market. The most notable NFT moments of the year involved Apes, prominent brands, and the implementation of creator royalties. Furthermore, Haun Ventures raised $1.5 billion, Huobi Global launched a $1 billion fund, and the DapperLabs raised $725 million, indicating significant investment in the NFT space. Real-life success stories in NFT cryptocurrency include NiceHash, CryptoKitties, and Bibox.
Solana and Polygon have been competing for the title of second most important NFT blockchain for the past year. By the end of October 2022, it appeared that Solana had surpassed Polygon and secured its position in second place. However, following the fall of FTX, Polygon regained popularity and activity.
The collectibles segment, which has historically been the most active in the crypto industry, has been surpassed by utilities in terms of the number of active sales and wallets. However, it still dominates in terms of the volume of dollars traded. Gaming and art have seen decreases in the number of collectors and volume of trades. Additionally, metaverse trading volume dropped by a factor of 16 between the second and third quarters. Despite a 74% decrease in USD trading volume, the utilities segment has exhibited unexpected growth in trading volume while the number of active wallets has remained almost the same.
Solana
Overview
Solana boasts several top NFT marketplaces, including Magic Eden, Solanart, and SolSea. Magic Eden charges a 2% transaction fee but does not charge a fee for listing an NFT. Creators can set their royalties and receive payment immediately after a sale. Solanart allows users to create, sell, and buy Solana-based digital collectibles but charges a 3% transaction fee on every successful NFT sale. Despite being fifth in overall trading volume, SolSea highlights itself as “the first NFT marketplace that enables creators to choose and embed licenses when they mint NFTs.”
Solana’s key innovation is Proof-of-History, which supports up to 50,000 blazing-fast transactions per second. This technology also allows creators to mint digital collectibles with embedded licenses at a low cost. Solana’s speed and capabilities make it a preferred platform for developers building their NFT marketplaces. Additionally, there are other useful products such as the high-speed decentralized exchange Serum and other applications like Audios and Chain Analysis, that contribute to the volume.
However, one reason for the underperformance of Solana NFT collections is FTX’s promotion of the Solana layer-one blockchain. As the exchange’s implosion was taking place, the price of SOL dropped 68% to $12. This decline affected the trading volume of NFTs, which represent collections of things like art or music stored on blockchains like Ethereum or Solana. Denominated in Solana cryptocurrency, Solana-based marketplaces like Magic Eden, OpenSea, and Solanart have seen significant increases in NFT trading volume, with daily trading more than tripling to over 250,000 SOL from about 80,000. The sell-off indicated that holders were hurrying to sell their NFTs and exit the market in response to the FTX incident.
NFT Development
Since 2021, Solana’s NFT ecosystem has made significant progress, with over 400 projects spanning DeFi, NFTs, Web3, and more. The first NFT project built on Solana was Kreechures, a crypto-collectible NFT RPG, with the first mint occurring on March 26th, 2021. The first wave of PFP-based NFT projects, including SolPunks, Solana Monkey Business, and Degenerate Apes, drove the number of unique NFT owners on Solana up to 1.5M by the end of summer 2021. In October 2021, FTX launched a new marketplace for NFTs on Solana.
Solana’s GameFi ecosystem has been around for a while, with projects like Aurory and Star Atlas being some of the most popular games in the space. Despite being in fifth place in terms of overall trading volume, SolSea touts itself as “the first NFT marketplace that enables creators to choose and embed licenses when they mint NFTs.” Although other NFT marketplaces have integrated this functionality, SolSea was one of the first to do so.
In September 2022, the number of tokens minted on the chain skyrocketed. The number of NFTs minted on Solana reached 312k on September 7th — a 700% increase from the 39k minted just three days before.
Polygon
Overview
Polygon (formerly known as Matic Network) is a layer-2 scaling solution for Ethereum that aims to improve the network’s speed and reduce transaction fees. It has quickly become a popular choice for developers and users looking to launch and use NFTs due to its fast transaction speeds and low fees.
The Polygon NFT ecosystem includes several NFT marketplaces, such as Nifty Gateway and SuperRare, which offer a wide range of NFTs, including digital art, collectibles, and gaming items. Additionally, several NFT projects have been launched on the Polygon network, including a Polygon-based version of the popular game Axie Infinity. OpenSea also supports NFT trading on Polygon.
Polygon’s ecosystem also includes several infrastructure projects that support the development and use of NFTs. For instance, Polygon has partnered with Chainlink to enable the creation of decentralized oracle networks, which can be used to verify the authenticity of NFTs. Additionally, Polygon has developed Polygon Studios, a venture studio that supports the development of NFT-related projects by providing funding, mentorship, and other resources.
Polygon has been expanding its NFT ecosystem through partnerships and collaborations. For example, it has partnered with the digital art platform Art Blocks to bring generative art projects to the Polygon network. Additionally, it has teamed up with the gaming platform Yield Guild Games to allow players to earn cryptocurrency by playing NFT-based games on the Polygon network. Polygon also hosts some of the biggest Web3 gaming projects and publishers, like Ubisoft, Atari, Animoca Brands, Decentraland, and Sandbox. Instagram, Stripe, Disney, Starbucks and Robinhood chose Polygon to integrate Web3 into their businesses.
Overall, the Polygon NFT ecosystem is rapidly growing and attracting more developers and users due to its speed, low fees, and growing infrastructure. With the continued development and adoption of Polygon-based NFT projects, the ecosystem is expected to continue seeing growth and innovation in the years to come.
Sequoia Capital India and more than 40 venture funds invested $450 million into Polygon. This funding round closed in February, a few months before the Terra ecosystem implosion triggered the first sector-wide contagion in crypto.
NFT Development
As Matic Network is being developed, in-game assets represented as NFTs (ERC721) was bought, sold, and traded in large numbers on sidechains. If they choose to, developers will also be able to save game state on the sidechains.
The organic growth of Polygon’s NFT trading activity and the optimistic narrative surrounding zkEVM are likely to persist, which could drive up the price of MATIC. Additionally, Polygon’s rollup solution based on price could draw new projects to its ecosystem. The team’s efforts in the Web3 space are promising and show signs of increasing activity. Despite the crypto winter, first-time and returning buyers per day in Polygon’s NFT market reached new all-time highs during the January 2023.
OpenSea integrated with Polygon in 2021, followed by Rarible in March 2022 and Magic Eden in November 2022.
NEAR
Overview
NEAR Protocol was founded in 2017 by Illia Polosukhin and Alexander Skidanov as a machine learning platform. They learned about smart contracts and cryptocurrency while investigating, which they found fascinating. They felt driven to learn more about cryptography and conduct further studies. They began researching blockchain technologies on which to construct their applications. However, they came to the conclusion that no blockchain platform could match their needs and aspirations. As a result, they created NEAR Protocol to meet their internal requirements. NEAR Protocol is a public Proof-of-Stake (PoS) blockchain that aims to bring DeFi to the masses with low transfer fees and fast transactions. Its mainnet went live in April 2020, and network validators voted to unlock token transfers in October 2020. NEAR’s bridge to Ethereum (called the Rainbow Bridge) launched in March 2021. NEAR Protocol relies on making the mainchain (Layer 1) scalable. As such, it offers enterprise-grade performance from the get-go, offering up to 100,000 transactions per second once it’s fully upgraded. In April, Tiger Global and FTX Ventures led a $350 million funding round for NEAR Protocol, which was one of the largest capital raises for any decentralized application platform at the time. The funds were earmarked for supporting the growth of the NEAR ecosystem, including the expansion of global regional hubs. NEAR ended 2022 as the 35th-largest crypto project by market capitalization.
NFT Development
There are 19 decentralized platforms and NEAR NFT marketplaces available for minting and trading NFTs on the NEAR blockchain. NEAR’s transactions are fast–taking only 1 to 2 seconds–and budget-friendly, costing just a few cents or less. This allows artists to quickly mint their work, while novice NFT buyers and experienced collectors can buy and sell NFTs in a near-frictionless way.
NEAR provides access to several protocols, ranging from DAOs and DeFi to NFTs, with a vibrant ecosystem that includes several operational projects. NEAR’s collaboration with Ed Young resulted in the platform launching portraits of iconic figures from the history of hip hop. NEAR’s ARterra platform allows for fan engagement through NFT-based monsters. Users can also combine two monsters, evolving them into more powerful and rarer NFTs. Paras takes a curatorial approach to its artists’ output, ensuring consistent quality and elevating creators. Minting artworks on other blockchains is possible with Rainbow Bridge, a NEAR-Ethereum bridge.
Paras, Mintbase, UniqArt, Apollo42, Few and Far, and Seatlab are NEAR NFT marketplaces worth considering. To buy or sell NFTs on these platforms, users need to use NEAR Wallet.
Paras
- Paras is a curated NFT marketplace built on the NEAR blockchain, which takes a more selective and high-quality approach to the NFT community and experience. Unlike other NFT markets that allow users to upload anything, Paras requires artists to apply and pass a selection process to ensure consistent quality and elevate creators. Space is limited, and all artworks must conform to a specific aspect ratio and standardized information. The curated collections give each individual artwork more context and meaning, allowing artists to tell a story or present multiple viewpoints on a topic.
- Paras’ curation enables artists to connect with their communities and foster creativity. Narrative, characters, and world-building are highly regarded, and collectors can see background text and other information on the back of cards, making it easier to organize and enjoy the cards. NEAR’s fast, simple, and low-cost technology makes it easier for everyone to mint their creative work, and the Paras experience offers a near-frictionless way for novice NFT buyers or experienced collectors to buy and sell NFTs.
Mintbase
- Mintbase is a global platform that simplifies the process of creating and selling NFTs, enabling anyone to do so without worrying about technical complexities. However, creating and selling NFTs on Mintbase became challenging due to the increasing Ethereum gas fees. To resolve this issue, Mintbase has found a new blockchain platform in NEAR, which has lower gas fees and more efficient contract execution models that require less computation.
- Mintbase’s migration to NEAR provides several benefits, such as the use of Rust or AssemblyScript for smart contract development, human-readable addresses, NEAR Drops for user-onboarding, and the ETH <> NEAR Rainbow Bridge, which facilitates the transfer of assets and data between the two blockchains. By leveraging NEAR, Mintbase can realize its vision of creating a world in which digital assets are interoperable and anyone can transact with them.
UniqArt
UniqArt aims to provide a seamless onboarding experience for artists and an easy-to-use interface for users. The platform caters to graphic designers, illustrators, 3D artists, and musicians, seeking to bridge the gap between artists and fans through NFTs. UniqArt’s focus is on bringing Music NFTs to NEAR. As there is much speculation about the adoption of blockchain technology and NFTs in India, UniqArt is working to make NFTs more accessible to Indian artists and fans through its platform.
UniqArt is a 360-degree solution to empower Indian artists. It aims to provide artists with a three-point solution:
- Awareness about Web3 (NFTs, marketplaces)
- Assistance in funding (decentralized crowdfunding)
- Allocation of power
The Indian music industry is rapidly growing and has a global appeal, with over 200 million active listeners. UniqArt aims to foster an inclusive and comfortable environment for musicians, enabling them to establish a two-way interaction with their community through NFTs.
Potential
Building an NFT ecosystem typically involves establishing an interconnected network of elements that facilitate the generation, transfer, and exchange of NFTs. This network encompasses artists, investors, collectors, developers, and technology providers. Blockchain technology provides the foundation for the ecosystem, enabling the generation, ownership, and transfer of one-of-a-kind digital assets. In the initial phase, a fundamental character for generative art collections is selected, defined by specific attributes. Individuals who have completed the registration process can subsequently create NFTs representing the creators’ works. Artworks can be offered for sale at a fixed price or sold through a bidding system, where the highest bidder secures ownership. Establishing an NFT marketplace is vital to the creation of a robust NFT ecosystem, enabling users to trade NFTs in both fixed-price and auction formats, depending on their preferences. Building a successful NFT ecosystem requires technical knowledge, community building, creativity, and compliance with regulations. By carefully adhering to these procedures, it is possible to build a thriving NFT ecosystem that supports the creation of exclusive digital assets.
Currently, TON Ecosystem has implemented all the necessary technical capabilities for creating and trading NFTs. Ecosystem participants can now consider developing more complex products.
Founders and future projects should pay attention to the exciting NFT trends in 2023 and capitalize on their potential in TON. NFTs are no longer limited to art; we anticipate tokenization of physical goods, collaborations, and AI-generated NFTs. Additionally, NFTs can be used for purposes such as membership perks, event access, and fractional ownership of assets. Gaming and NFTs are a perfect match, and we expect more improvements to games using NFTs. Fractional NFTs will also gain popularity, allowing investors to purchase a portion of an expensive asset. Additionally, we anticipate that the intersection of NFTs and AI will be a crucial trend in 2023. This trend has the potential to create unique, one-of-a-kind digital assets using advanced machine learning algorithms. Finally, we expect to see continued efforts to increase the adoption of TON and attract new users to the ecosystem.
George, CEO @ TON Punks: “Fractionalization and tokenization very perspective technologies, even BlackRock comment out on this. TON can be a powerful tool for these use cases. But I don’t think that there is lack of technologies for NFT market development, Getgems, Disintar and smaller projects did a great job. I think the main problem is lack of successful cases and tactics to attract audience. Most of the artists need developed roads and knowledges”
Founders and future projects should embrace these trends and leverage them to create innovative solutions that benefit users in tangible ways. NFTs will expand into the mainstream through big brands, as a payment method, and as a way to store or exchange value. We anticipate that this year NFTs will be all about utility and reaching the average person. Do you believe that NFT technology is meant to achieve mass adoption? Do you have any ideas on how we can make NFTs accessible and appealing to a broader audience, including our parents and grandparents? We are always eager to meet builders! DM us on Twitter.
Thanks to all the members of the TON community who contributed to this study.
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