It cannot be denied that the market for non-fungible tokens (NFT) has continued to grow at a record rate, with recently published statistical data revealing that during the first three quarters of 2021, there was a 328% increase in NFT transactions, with a number of major entities such as Microsoft, Home Depot, Tesla, Whole Foods, Starbucks, among others, entering this rapidly evolving space , so helping him mature at the rate he has.
That said, it is worth mentioning that in its current configuration, the NFT space is largely fragmented, with a select few players continuing to dictate the direction of this industry despite the fact that in recent years entry barriers have been lowered. by a large margin. In terms of what makes these new digital offerings so unique, it can be said that NFTs provide users with an independent means to publicly verify ownership of a wide range of assets ranging from rare collectibles, works of art , music, real estate, etc.
In terms of adoption, NFTs have managed to garner an extremely high level of general support. For example, earlier this year, former Twitter CEO and tech expert Jack Dorsey was able to sell an NFT version of his genesis tweet for a hefty $ 2.9 + million. Similarly, UC Berkeley researchers sold out Two Nobel Prize-winning cancer immunotherapy patents and CRISPR-Cas9 to potential buyers worth a solid $ 50,000 recently, demonstrating the widespread appeal of this expanding asset class.
The problems surrounding the NFT market in its current version
As highlighted above, NFT’s smart contracts designed to transparently provide royalties to artists, musicians, and content creators have gained a lot of traction over the last year or so. In this regard, ecosystems such as Zora, OpenSea, Rarible & Foundation continue to attract the interest of many by offering a ‘creator’s royalties’ option as part of all subsequent secondary sales of an individual’s work.
That said, what is generally not clarified is the fact that these royalties are only available to creators when secondary and subsequent sales take place through the same marketplace through which the original transaction was initiated. Due to the fact that the original author cannot do anything to prevent his clients from listing their NFTs on different platforms, his future earning potential is greatly hampered.
In fact, the existing infrastructure with which royalties are divided among collaborators is largely managed manually and has not reached the level of efficiency one might expect today, especially since most of these platforms use a chain. of blocks. -Design driven.
Another tangible issue currently plaguing this evolving space is that of original NFTs being sold through private sale events, something that is done to mitigate transaction fees associated with listing or selling an NFT. This again prevents creators from accruing any kind of secondary income that would have otherwise been available to them had the sale been made from the original mintage source.
New emerging solutions are mitigating these problems
With conservative estimates suggesting that the NFT space is projected to grow By a whopping 1000% over the next decade, the aforementioned problem of royalty distribution (via secondary rig sales) is one that needs to be addressed.
Enter CXIP, a minting-as-a-service (MaaS) platform that has been created for the sole purpose of providing each individual content creator with their own unique smart contract, which clearly defines the rights of users, thus ensuring that any income based on royalties Transmissions due to them (as a result of third-party sales) are available at the touch of a button.
To craft, CXIP smart contract solutions come packed with sections clearly defining a number of technicalities like “NFT creator name and details” rather than the current system only mentioning generic details like “produced with OpenSea Wallet”. Not only that, the platform also provides users with optional add-on services, such as registering artists’ work with the US Copyright Office to offer an additional layer of legal protection.
Looking to the future
As investors around the world continue to pour their money into the NFT market, it stands to reason that awareness regarding this space will only continue to grow, helping to open up this burgeoning asset class to people who may have previously been been a bit skeptical about the concept of an NFT that acts as a long-term digital store of value (SoV). So it will be interesting to see how the future of this market continues to unfold from here.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial or other advice.