Non-Fungible Tokens Market Size & Growth (2022 – 2030)

The global Non-fungible tokens market was valued at $250 million in 2022 and is estimated to develop with a booming CAGR between 2022 and 2030.

Non-Fungible Tokens are easily exchangeable and individually unique digital assets which are held on certain block-chains, mainly Ethereum but also others such as Matic, Flow, Wax, and others. NFT not only exists in a digital space but crucially they can also represent any type of physical asset, acting as a kind of ‘digital twin’ to anything existing in the real world and enabling the ownership and exchange of physical possessions within digital marketplaces. True ownership is one of the defining key components of any NFT and, as the digital economies continue to thrive, there are high chances of NFT to play a pivotal role in bringing the digital and physical worlds closer to one another than they have ever been before.

NON-FUNGIBLE TOKEN (NFT) MARKET REPORT COVERAGE

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Recent Developments:

• In March 2022, Tapinator Inc., a developer and publisher of category leading games for mobile platforms, has announced that it is in development on NFT500, a subscription casting service and collection platform focused on blue chip NFTs. The term "casting" refers to displaying digital art, in the form of NFTs, on a physical display. 
• In April 2022, Hall of Fame Resort & Entertainment Company announced its first non-fungible tokens offering in partnership with Dolphin Entertainment, Inc.

Market Driver and Restraints

Driver

NFT is being considered as future of ownership by it’s users. All kinds of property – from event tickets to houses – will eventually have their ownership status tokenised in this manner. The idea of having an ownership of digitally created content is estimated to drive the market. The main driver for the growth of NFT market is digital art. NFTs help the digital artists to attain ownership for their digital artwork. They can receive more income through NFTs, as they can get royalty each time the NFT is transacted after the initial sale. NFT collectibles market will increase considerably as fan engagement will increase. For instance, NBA’s Top Shoot blockchain product of LeBron James highlight sold for $200,000. The Metaverse, virtual real estate, trading will considerably increase during the forecast period. Gaming Industries are coming up with innovative advance games such as Strategy Role Playing Game, where the user can create a game character and using NFT can get the ownership of created character which later can be put up on sale on various marketplace (Rarible, OpenSea, etc.). 
Sébastien Borget, co-founder and COO of The Sandbox, commented in an interview, “The number of potential use cases for NFT continues to grow with time, and ever more innovative example appear regularly. NFT can really represent any class of digital asset. Nonetheless, there are a handful of particularly popular use cases, such as in-game assets, trading cards/collectibles, virtual real estate, domain names and work of art.”

Restraints

Given that anybody can create NFTs, the scarcity of each piece does not guarantee value. Losses can stack up if the hype dies down. In a market where many participants use pseudonyms, fraud is also a risk.

Market Segmentation Analysis

Non-Fungible Tokens Market - By Type

Digital Art & Gaming NFTs will contribute to the maximum share of NFTs transactions. In Gaming more specifically and until recently, any in-app purchases or virtual currency bought in free-to-play games could not be withdrawn, re-used, resold, or used in other ways across games or platforms. In other words, they were perishable consumable goods. With NFTs, anything bought in the games will actually belong to owner. As bought asset will be registered on the user’s name. Each asset is uniquely identifiable, can have a provable limited number of copies and can be transferred between users, without asking the permission of the developer. Even better, it can also be transferred outside the game, put for sale on a marketplace or even used inside another game, providing extra utility and gameplay across various games.

Digital art is leading to new creations, which is opening the doors for more people to become interested and involved in the art world. The artists in this space will continue to innovate and produce work that will continue to push the boundaries of at present art form. But there’s a drawback to these regular digital art work i.e., item can be copied and replicated unlimited times at no cost. To overcome this drawback digital art is now put up on blockchain and is transformed into a NFT such that is cannot be replicated. This has given the digital artists an opportunity to earn through their art works. Owing to this reason it is estimated that digital art will contribute to the considerable amount of global non-fungible market.

Non-Fungible Tokens Market - By Market Type

NFT market is primarily divided into two segments:

• Primary market/sale
• Secondary market/sale

Primary market/sale is determined by the first and original sale of an asset and secondary market/sale is determined by the sale of the asset occurring after the initial primary market sale. 

At present, the digital art and sports segments contributes to the maximum share of the primary market. As digital artists are becoming aware of the Non-Fungible Tokens and the concept of ownership of the digital art, they are putting their digital art for sale on various NFT marketplaces. Owing to this reason the primary market of digital art is estimated to grow considerably during the forecast period. Meanwhile, the secondary market will continue to remain very limited as work of digital art is considered as a holding asset by the buyer for getting good ROI in the long run. Sports segment is rapidly gaining momentum as sports industries are realizing the potential of blockchain technologies. Increased opportunities to increase the fan engagement, captivate sponsors and engage into the global market. For instance, amid COVID-19 pandemic, in year 2022 Sorare; a fantasy game of soccer, where players buy, sell, trade, and manage a virtual team with digital player cards; observed a sale of $5.7 million (US). The primary market of sports segment is observing a upsurge but in coming years the sports segment is estimated to reach a maturity point and at this point the NFT market of sports will be driven by secondary sales market. 

The gaming segment currently is in its mature state as more than 75 % of the trades are made on the secondary market. But still the gaming market still has significant growth potential. The collectibles segment has also reached its maturity state, but unlike gaming segment the collectibles segment tokens are issued significantly on the primary market i.e., about 70% of the total collectible’s sale and trade on secondary market is relatively few.

Non-Fungible Tokens Market - By Cryptocurrency Usage

All the transactions on various NFT marketplaces, blockchain gaming platforms are done using various cryptocurrencies. Ethereum (ETH) is most extensively used for trading NFTs. For instance; Sorare, F1 Delta; NBA Top shot uses ETH cryptocurrency. New cryptocurrencies will be introduced during the forecast period as it is considered a safe of conducting transactions. 

Cryptocurrencies are used for NFT transactions because it is a fraud-proof transaction and all the transactions are uploaded on a public ledger. This ledger ensures that all the transactions between the “digital wallet” can calculate an accurate balance. All these transactions are checked by the cryptocurrency provider to make sure that the coins used are owned by the spender. This ensures secured digital transaction encryption and “smart contracts” that makes the entity virtually unhackable and void of fraud.

Regional Analysis

Non-fungible token market has continued to gain steam in the U.S., as brands like Gucci have rolled out digital-only sneakers and artists like Beeple have set records by way of multi-million dollar auctioned-off artworks. The NBA partnered with Canadian-based Dapper Labs, makers of the CryptoKitties game, to make its version of a collectible digital asset. NBA Top Shot is a crypto-collectible consumers can purchase as a non-fungible token (NFT).

In Europe, France is buzzing with NFT startups amid this pandemic. In March 2022, NFT startup Arianne, which certifies ownership of virtual luxury goods, raised €9m in VC. That came just two weeks after NFT-based fantasy football platform Sorare raised a €40m round of VC led by International A-list investors such as Benchmark and Accel.

In Aisa, Indian company WazirX, the country's Bitcoin and cryptocurrency exchange & trading platform, announced that it will launch a non-fungible tokens (NFT) marketplace for Indian artists and creators for the auction of their digital assets and earn royalties. NFTs are becoming a trend in China but the Chinese art market has an extremely poor understanding of crypto art, and Chinese NFT artists have a lot of catchup work to do compared to its western counterparts. And moreover, the impact of Chinese regulations, which are particularly stringent when it comes to the crypto space. 

Impact of COVID-19 on the Global Non-Fungible Tokens Market

The Covid-19 pandemic has forced populations into a more sedentary lifestyle due to generalized lock-downs across the world. These population, of all ages and of all origins, have had to find alternatives for social interaction whose confinement had deprived them. Therefore, these users became part of various online Metaverses platform to increase social interaction and to get exposure of NFTs. For instance, AxieInfinity, a digital pet universe on blockchain, has attracted thousands of newcomers to blockchain technology from developing countries who were looking for new income streams during the Covid pandemic. According to NonFungible.com; in 2022 the NFT market grew by 299% as compared to 2022. 

Top Leading NFT providers:

NBA Top Shot, Cryptopunks, Hashmasks, Sorare, CryptoKitties, Decentraland, Rarible, OpenSea, SuperRare, Ethereum Name Services