- Both volumes, as well as value of NFT transactions, fell after the crypto market crash in May and June. According to crypto research firm Chainalysis, NFTs sales in June totalled just over $1 billion, the worst performance in 12 months
NEW DELHI: Non-fungible token (NFT) platforms in India are banking on brands to grow their business amid waning interest from individual artists and creators. While creators looked at the NFT space as a new earning medium, brands see it as a tool for customer engagement and retention.
“Artists are struggling to make ends meet and are looking for other opportunities,” said Prasad Bhat, a Bengaluru-based artist who has listed his artworks as NFTs on platforms like WazirX and OpenSea.
NFTs are built on blockchain technology and act as a digital equivalent of ownership deeds. Amid the crypto boom last year, artists and creators saw platforms like OpenSea as a way to sidestep traditional means of showcasing their art. However, with the crypto market turning bearish, NFT marketplaces too, have taken a hit.
Both volumes, as well as value of NFT transactions, fell after the crypto market crash in May and June. According to crypto research firm Chainalysis, NFTs sales in June totalled just over $1 billion, the worst performance in 12 months.
Dhruv Saxena, chief strategy officer at Fantico, a NFT and gaming firm, said the hype which drove the initial phase of NFTs was funded mostly by surplus capital. “People who traded stocks and cryptos showed initial interest in NFTs. After stocks started sliding and crypto portfolios started going down, liquidity went down. Suddenly, individual NFT artists are finding that people are not buying anymore,” said Saxena.
Meanwhile, brands are seeing NFTs as an opportunity to keep customers engaged. More brands have launched NFT collections in recent months, stakeholders said.
For instance, Flipkart launched its first NFT platform that airdropped NFTs by UK-based consumer electronics brand Nothing earlier in July. The company wanted to drive early bookings for its Nothing Phone 1 smartphone through these NFTs. They gave early access to customers to future events, products and gifts by the company.
Textile maker Mafatlal Industries has also announced plans to open a metaverse gallery and NFT store on Comearth, an e-commerce metaverse platform started by Gurugram-based NFTically. Other names include ticketing platform MakeMyTrip and automaker MG, which launched NFTs earlier this year and last year, respectively, using KoineArth’s ngageN platform.
Praphul Chandra, founder and chief executive officer at KoineArth said more brands are looking at NFTs as an engagement tool.
Toshendra Sharma, CEO and founder of NFTICALLY said the fall in value and volume of NFTs has not affected the enterprise interest. On the contrary, it has spurred more interest. NFTICALLY is currently working with “multiple brands”, and expects more brands to launch NFTs in the coming months.
“The best way to fight the downturn is to sell and engage and keep metrics healthy,” said Sharma.
Unlike crypto exchanges and decentralized finance (DeFi) platforms, the bear market may actually turn out to be good news for NFT firms. Experts said that the entry of more brands will bring maturity and credibility to the industry, and spur growth. Sharma, who offers a software-as-a-service (SaaS) product for brands to build their own NFT platforms, said they pay a subscription fee for using NFTICALLY.
“When big brands enter, smaller brands follow and bring volume with them, which means more growth,” Sharma added. According to a May report by HubSpot, 39% of marketing professionals who used NFTs for brand engagement found it has the highest return on investment among all tools they used.
Chandra pointed out that the next phase, which is maturing quickly, is where true engagement will be generated by providing premium experiences to NFT holders.
Pedro Herrera, data analyst at DappRadar, cautioned that creators who want to sell an NFT at inflated prices are unlikely to see a lot of traction anymore. “The outlook is good for people who want to create smart and programmable assets,” he added.
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