How NFTs Are Growing Outside of The Ethereum Ecosystem by@alexng

How NFTs Are Growing Outside of The Ethereum Ecosystem

Non-Fungible Tokens (NFTs) are unique blockchain-based strings of code that are used to represent both digital and physical assets. NFTs are currently popular for digital art collections and blockchain games but there are deeper applications for this technology. Technology is starting to find new and novel applications in the real world. The crypto market, in general, has taken a downturn but NFTs seem to be holding up amidst the volatility, with new use-cases popping up.
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Alex Nguyen

Web3, finance, gaming and blockchain writer.

There is more to NFTs than JPEG art collections and blockchain games, this trending technology is starting to find new and novel applications in the real world.

Non-Fungible Tokens (NFTs) are unique blockchain-based strings of code that are used to represent both digital and physical assets. 

NFTs are mainly popular for digital art collections like BAYC and CryptoPunks but there are deeper applications for this blockchain-based technology.

The crypto market, in general, has taken a downturn but NFTs seem to be holding up amidst the volatility, with new use-cases popping up.

Let's explore the multiple ways that NFTs have evolved in the current market conditions of 2022.

Independent Non-Fungible Security

Now that clients can use cryptocurrencies to buy the latest Gucci it-bag or own an NFT memento from Balmain, it appears the luxury industry is embracing the blockchain in full force. However, as crypto and traditional NFTs experience a particularly volatile period, brands and consumers may get cold feet on utilizing digital assets. The hard luxury goods industry now has a window of opportunity to utilize expertise and a wealth of natural resources to cement its place in an unpredictable blockchain world.

Yvel, an Israel-based fine jewelry house, launched INFS (Independent Non-Fungible Security). INFS is a trading platform that merges blockchain technology with real-world, customizable guarantees in a form of unique precious stone decorated  24-karat gold coins. The project represents Yvel’s next chapter, launching the “Genesis Phase” pre-sale stage on June 13 with 2,500 coins to be made available to accredited investors.

INFS unlocks the next step in digital ownership tools by bridging blockchain technologies with a material protection layer for each digital security. On the INFS trading platform, any company can issue an INFS with customizable guarantees, offering rewards from products, experiences, subscription services, or profit-sharing.

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As the prime guarantor of INFS and its respective platform, Yvel will manufacture the original physical INFS assets: Five thousand 24-karat gold coins with bespoke precious stone settings. Priced at $10 thousand dollars, the first 2,500 of these coins will be released in a June pre-sale stage, allowing early accredited investors to earn up to 25% of the profits made by the platform and engrave the coin to their specifications.

INFS provides enticing protection guarantees and a physical representation in the form of a precious commodity. Both investors and customers of a company can hold INFS to gain profit, trade to other buyers, or redeem the coin for $10 thousand dollars worth of Yvel jewelry. 

“INFS is our vision to evolve how blockchain financial products can serve investors in any company or project,” says Eliaz Gabay, CEO at Yvel.

Eliaz continued to say:

“Our heritage as a jewelry house that has empowered our local communities for decades has shown us not only the intrinsic value of our finest materials but the value created by bringing people joy and prosperity. INFS embodies these values and we’re proud of this platform being the next step for Yvel.”

Blockchains outside of Ethereum are gaining popularity

Ethereum is currently the most popular blockchain network for decentralized applications (dapps) and NFTs. However, other blockchains like Solana, Polygon, and Fantom are starting to attract project founders and developers.

Whilst Ethereum is currently the first choice for NFT projects, due mainly to its popularity, first mover advantage, and higher number of users, there are some issues that can project on the Ethereum chain. 

One major issue is gas fees, which can be as high as $474 when the network is congested. This is due to a demand for transactions once the network is overcrowded with transactions. So, miners (or validators) end up giving higher priority to transactions with higher fees, thus leading to users buying extra gas to get their transactions through quicker.

This can lead to "gas wars", a phenomenon where whales (or crypto holders with a large amount of wealth) each place very high bids for gwei (aka gas), causing gas fees to skyrocket. Gas fees can also make it expensive for founders to set up NFT projects on the Ethereum network.

Another problem is slow transaction fees when the network is under strain, which can also lead to gas wars since whales are willing to pay more to get their transactions through quicker.

This can be troublesome for projects that allow users to mint as many NFTs as they want. The users with the most money will be able to mint as many NFTs as they can for themselves, and they have enough funds to make sure their transactions get through before anyone else.

In response to Ethereum's scalability issues, new blockchains have come into the spotlight. Solana has cheap transactions and fast speeds, Polygon is an Ethereum Layer 2 network with fees lower than 1 cent and transactions that complete in minutes, whilst Fantom also has ultra low fees and transactions that complete in seconds.

These blockchains have all seen a rise in NFT projects (and dapps too), with Solana being the most popular out of the three, even overtaking Ethereum's daily NFT trading volume at one point.

Opensea has also added Solana and Polygon networks to its site, opening up the blockchains to a wider number of users. 

Whilst these blockchains are mainly being used for Play-to-Earn (P2E) and Profile-for-Proof (PFP) projects, in time we can see these scalable blockchains being used for additional NFT use cases.

For example, we can see these blockchains being used for NFT ticketing, NFTs that are bonded to real-world assets such as gold, and so on.

NFT Tickets for real-life events

Whilst it seems like most NFT use-cases are related to making a quick buck, there are actual real-world applications for the technology. One real-world use case that has gathered steam this year is events.

These events use NFT tickets instead of the standard tickets traditional used to gain entry into events.

NFTs are different from traditional barcode-based tickets in many ways. For one, NFT tickets help to reduce fraud since the NFT is a token that is stored on the blockchain.

Event organizers will be able to issue a fixed amount of tickets and users can also check the public ledger to verify if the NFT-backed ticket is legit or not.

Secondly, NFT tickets allow users to transfer ownership to another user via the blockchain, again helping to reduce fraud. These tokens can also be sold on the secondary market, enabling the organizers and in some cases original ticket holders to earn royalties on secondary market sales.

Thirdly, personalization also plays a role in the rise of NFT-backed tickets. Digital IDs can be assigned to ticket holders, which makes the tickets tamper-proof and less susceptible to theft, especially since the data is stored on-chain. 

This goes to show that NFTs have additional applications outside of JPEG-based art collections and blockchain games. There are traditional, boring applications for the technology too and I think it's about time we started to see this technology being explored by additional industries.

This year, there have already been events that required users to own NFT tickets to gain access. In May, Floyd Mayweather took part in the world's first ever NFT Pay-Per-View (PPV) boxing match where he faced Don Moore in Dubai.

NFT ticket holders got access to the online PPV stream to watch the fight. Another event using NFT tickets is Coachella. We're likely to see this trend pick up with additional events that require NFT tickets to gain access.

Conclusion

The NFT space continues to grow and with it comes a whole new world of possibilities for the application of this blockchain-based technology. As time goes on, we'll start to see more uses for non-fungible tokens in the real world.

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