The digital asset market is constantly evolving and the NFT space is not an exception. Last year’s bear market caused investors to alter their view of the nascent industry and its biggest selling points. As such, the investment standards for NFT projects have shifted, potential buyers have abandoned the search for some qualities and have instead begun to seek out new ones. Certain projects have continued to dominate the market while others have emerged as this era’s dark horses.
The term NFT means non-fungible token and is used to describe a digital asset that is stored on the blockchain. NFTs are generally virtual representations of real-world items and can come in various formats such as digital images, videos, music, in-game items, and others. Just about anything can be tokenized and made into an NFT. Of course, this explanation presents a new question, why are NFTs so valuable? The answer to this lies in the very nature of non-fungible tokens.
Being non-fungible means that at its core, every single NFT is unique and cannot be replicated. Think of it like a one-of-a-kind trading card or collectible, but in digital form. Each NFT possesses a cryptographic signature that is visible to anyone on the blockchain. With this, ownership of an asset can easily be verified. Even if copies are created, tracing the ownership of the original is a very simple matter. The blockchain retains this information in perpetuity and it cannot be tampered with.
NFTs utilize the same technology that powers cryptocurrencies and are created via a process known as minting. When an NFT is minted, it is assigned a unique identity on a blockchain, which is a secure and transparent digital ledger that records transactions. This identity includes information about the asset, such as its ownership history and characteristics, making it a one-of-a-kind piece and impossible to duplicate. Once an NFT has been minted, it can be bought, sold, and traded like any other form of property. Each transaction is recorded on the blockchain, which ensures that the asset is authentic and cannot be altered after it has been recorded.
NFT tokens or NFT coins sounds like a redundant term, however, it refers to cryptocurrencies that are used to support NFT ecosystems. A good example of this is blockchain-based virtual reality platform Decentraland's MANA token. Users can buy and sell LAND, non-fungible tokens representing virtual land, using MANA, and also use it to purchase virtual goods and services.
MANA is not the only token within the game’s economy, Decentraland has its own governance system, where users can vote on platform upgrades, changes to policies, and other community-driven decisions. This governance system is facilitated by a separate NFT token called "LAND Governance Tokens" (LAND) which is used to vote on proposals and influence the direction of the platform's development.
Given the fact that NFTs and cryptocurrencies have the same technology at their foundations, one would expect similarities. These do exist, a non-fungible token and an asset such as Bitcoin are both virtual tokens that can be bought, sold, and traded. However, the similarities end there, each respective class of assets has certain core differences.
The most obvious one, to begin with, is the fact that cryptocurrencies like Bitcoin are fungible, which means that each unit is interchangeable with any other unit of the same currency. 1 BTC is exactly the same as another BTC and has the same value. NFTs, on the other hand, are non-fungible, meaning that each NFT is unique and cannot be exchanged for another NFT.
Also, cryptocurrencies are primarily used for financial transactions, while NFTs have a broader range of applications. They are useful in the design, music, film, art, and video game industries. Additionally, NFTs can be minted and added to the blockchain, while cryptocurrencies are mined. Lastly, to purchase an NFT, cryptocurrency is required, and they are bought on NFT platforms like OpenSea and Rarible, while cryptocurrencies are bought on exchange platforms like Binance and Coinbase.
Top 3 NFT Tokens By Market Cap (Data culled from Crypto.com)
$1.77B
The Bored Ape Yacht Club was created by a group of anonymous developers who launched it in April 2021. The project swiftly gained popularity among collectors and enthusiasts. It has since become one of the most highly coveted NFT collections, with individual apes selling for millions of dollars.
A celebrity favorite, BAYC offers users a combination of rarity, exclusivity, and utility, this is what drives the project. Bored Ape owners have exclusive access to events, merchandise, locations like the BAYC Bathroom and the Yacht Club, and even new releases such as the Bored Ape Kennel Club. The project features 10,000 unique cartoon apes with various traits, accessories, and backgrounds. BAYC uses its own NFT token called APE to facilitate governance within its community. APE holders are able to vote on proposals and influence the direction of the project's development.
$1.13B
Flow is a blockchain platform that was created in 2019 by Dapper Labs, the developers behind leading NFT project NBA Top Shot. The platform was specifically designed for NFT collectibles and crypto games, offering developers an easy-to-use solution for building and deploying their own blockchain-based applications.
Flow prioritizes developer accessibility through user-friendly interfaces and simplified development tools for NFT creation. It also provides high throughput and low transaction fees, making it a cost-effective option for NFT transactions. The platform’s FLOW token is a major part of its ecosystem as it powers NFT sales and native games. It is also used for governance and staking purposes.
$1.14B
Decentraland is a 3D virtual world platform where users can buy and sell virtual plots of land as NFTs through the MANA cryptocurrency, which uses the Ethereum blockchain. The platform was opened to the public in February 2020 and is overseen by the nonprofit Decentraland Foundation.
Decentraland offers non-fungible parcels that users can purchase and develop for leasing or outright sales, allowing them to create immersive experiences for visitors while monetizing the experience. The platform’s unique MANA token is used for buying, selling, and trading virtual lands and assets.
$1.06B
Tezos is a blockchain platform that was created in 2018 by Arthur and Kathleen Breitman. It was designed to be a decentralized, self-amending blockchain that can evolve and upgrade itself through on-chain governance. The platform uses a unique consensus mechanism called Liquid Proof-of-Stake (LPoS).
Tezos offers smart contract capabilities for creating NFT marketplaces and other applications. Its on-chain governance system allows token holders to propose and vote on protocol upgrades and changes, making the platform adaptable to community needs. The platform's native cryptocurrency, XTZ, is used to pay for transaction fees, staking, and governance. XTZ holders can validate transactions, earn rewards, and participate in on-chain governance.
$1.04B
Axie Infinity is a blockchain-based game where NFTs represent cute fantasy monsters called Axies which players use to battle one another. The game was created by Vietnamese game studio Sky Mavis and launched in 2018. The goal of the project was to create a play-to-earn model that allows players to earn cryptocurrency via the game.
Axie Infinity combines the excitement of a game like Pokémon and the thrill of ownership. Axie Infinity allows players to own in-game assets, Axies, and even land plots represented as NFTs which they can trade for real money on the game's marketplace. The Axie universe features governance tokens known as Axie Infinity Shards. Given its role in the Axie universe, AXS is one of the best NFT tokens in the market. It serves as a utility token that enables players to participate in various in-game activities, such as breeding and battling Axies, earning rewards, and participating in the game's governance system.
$977.08M
The Sandbox is a blockchain-based virtual gaming world where players can create, share, and monetize their own gaming experiences. The project was created by blockchain gaming company Animoca Brands and was first launched in 2012 as a 2D game. In 2018, the team decided to pivot and create a 3D game that would allow players to own and trade virtual land as NFTs.
The Sandbox is built on the Ethereum blockchain and uses a native cryptocurrency called SAND. Using the token, players can purchase virtual land which they can then use to develop custom games and locations, and even monetize them. Non-fungible tokens (NFTs) are used to represent the land, and each parcel is unique and can be developed using a drag-and-drop building tool.
$502.49M
WEMIX is a blockchain-based project that aims to revolutionize the music industry by creating a platform where artists can monetize their music using non-fungible tokens (NFTs). The project was founded in 2020 by a team of music and blockchain enthusiasts, and is built on the Ethereum blockchain.
WEMIX's vision is to create a decentralized music economy where artists can retain full ownership of their work and fans can directly support their favorite musicians. Artists can mint their music as NFTs, and fans can purchase these tokens as a way of owning a unique piece of the music. The platform also allows for the creation of limited edition NFTs, which can be sold for a higher price due to their rarity. WEMIX’s native currency WEMIX is an NFT token holders can use for NFT exchange, staking, and governance.
If you’re having trouble deciding on which NFT crypto coin to buy, here two things you should look at:
First, it is important to consider the purpose of the NFT token. Some NFT tokens are designed for a specific purpose within a particular platform or ecosystem, such as governance or in-game currency, while others may have more general utility. It's important to understand the use case of the NFT token and how it fits into its respective ecosystem.
Look for NFT projects that have a solid team behind them and an active and engaged community. A strong team with a track record of success is more likely to deliver on the promises of the project. Also, tokens with a large and active community of supporters and users are more likely to have a stable value and potential for growth.
If you want to own an NFT, you can either buy or mint one. Buying an NFT is a simple approach, while minting your own NFT can provide full control over the creation and distribution. You can mint an NFT using a smart contract on an NFT marketplace with an easy-to-use interface. Your decision to buy or mint an NFT depends on your goals and needs in the NFT ecosystem. With an NFT token however, you’re going to have to buy one, here’s how you can do that;
Should I invest in NFTs tokens?
It’s best to view these assets as speculative investments so only invest what you can afford to lose.
Can I sell my NFTs?
Yes, you can sell your NFTs on various NFT marketplaces or through private sales.
What are the best NFT tokens?
Some leading NFT coins include APE, MANA, and FLOW among others.
