Interest in NFTs has taken a hit. Google searches for NFTs have dropped by about 80 percent, floor prices for many “blue chip” NFT projects have seen large decreases, and investors have lost money, leaving many to wonder whether the hype for NFTs is over.
Despite the downturn, Jessica Rizzuto, VP of e-commerce for Tafi, believes the NFT and cryptocurrency markets were probably due for a correction. Their meteoric rise over the past few years wasn’t sustainable. That doesn’t mean we’re experiencing fatigue, she says. If anything, this is an opportunity for brands to showcase their products.
Remi Labs co-founder Doug Barnett agrees, saying “the quality [of an NFT release] has to shine through in a downturn.”
Not everything is going to work as it might have during a bull run, but quality products with something special to offer still have the opportunity to shine. Utah’s Uplift Aerospace, for one, sold out its 1,969-NFT Space+ Launch Pass collection in late May despite offering a refund to anyone who wanted one in the face of market uncertainty. Uplift CEO Josh Hanes says less than 10 people asked for a refund. Perhaps that’s because NFTs came with the chance to travel in space.
“I think [the downturn] is an opportunity for companies that are going to do something unique and interesting to really be able to do that,” Rizzuto says. “It’s a shift to more trusted, more established brands and organizations that can showcase and do incredible things. I think people are going to be less interested in risky things where they don’t quite know who that brand is.”
To gain that trust, some brands are adding utlity to NFTs that have lost value. Daz 3D, for one, debuted the NFT collection Non-Fungible People in December of 2021. At the time, the collection of 8,888 NFTs representing women and non-binary people minted for 0.2 ETH and sold out quickly. Less than a month later, the average price to land one of the NFTs had more than tripled. When prices fell, the average sale dropped to 0.05 ETH. As a consolation, Daz3D threw in a free mint for their Non-Fungible Pets collection, with some holders receiving a free airdrop from the company’s partnership with Clinique.
“In NFTs, you’re trying to find ways to bring additional value to your collection and do something that’s interesting and fun,” Rizzuto says.
In the longterm, Daz 3D believes their NFTs have enough utility to hold their value. Before July 15, Non-Fungible People holders can mint a pet for their avatar, which includes full-body images and 3D files. Those 3D files, Rizzuto says, can be used to make movies, games, livestreams, or more. They’re fully ready for the future of the metaverse, whatever that may be.
“We have thousands of customers every day who buy 3D models on the Daz site and they create movies with it, they create art with it, they create illustrations,” she says. “So to me, I look at ours, and I said ‘That is just incredible utility and you can take it so many places and do so many creative things.”
Still, Rizzuto says it’s “anybody’s guess” where NFTs will go in the future. Without the allure of quick increases in value, NFT projects need to deliver on utility off the bat. That’s why the popular Utah soda shop Thirst is selling NFTs that come with free menu items for life and other discounts. Thirst founder Ethan Cisneros says tangible benefits are the future of NFTs, and he places some of the blame on existing projects for creating a bubble in the market.
“People are starting to realize this is crazy how much we’re spending on [NFTs], and people are flipping them for millions of dollars. That doesn’t make any sense,” Cisneros says. “I think that’s what’s going to start to change. The real utility of an NFT and the things that you can do with it are the real benefits of it. When value is created, they are going to start to rise to the top, and I’m honestly excited about it. Yes, the NFT market is crashing, but it’s because all the projects have delivered with zero value.”