Over the past few years, you've probably heard about how non-fungible tokens, or NFTs, are the perfect thing to tackle. NFTs, a type of crypto asset that proves ownership of digital files such as images and videos, are sold by individual tokens for millions of dollars and are collected by major brands such as Nike, Starbucks, and DC Comics to their fans and customers. It has appeared in the form of providing. As crypto insiders say, this trend was a rocket ship “to the moon.”
However, the rocket returns to Earth and appears to be plummeting at high speed.according to report By DappGambl, which analyzed data from NFT scans and CoinMarketCap. 69,795 out of 73,257 NFT collections have a market cap of 0 Ether, the native currency of the popular Ethereum blockchain. What this means is that 95% of people's NFT collections have no value at all. The NFT market has also evaporated, with weekly trading volume of around $80 million in July 2023, just 3% of the market peak of $2.8 billion recorded in August 2021.
I have witnessed the rise of NFTs during my time at Clockwork, but have mostly refrained from talking about them for fundamental reasons. NFTs are grafted onto aspects of cryptocurrency. These are digital collectibles sold at astronomical prices, with the promise of increasing in value over time. They also play an important role in the evolution of the global online experience and the discussion about another trend that is getting a lot of attention: the metaverse.
Considering the state of NFTs and their declining demand, there are lessons to be learned. Specifically, the lesson focuses on technology trends and the hype that drives them.
it's all about money
NFTs have been around for a while, but the trend took full effect in early 2021 with the introduction of an NFT created by digital artist Beeple. It sold for an astonishing $69 million at Christie's auction house.. This sale sparked a gold rush, with consumers and organizations flooding into the sector.Here in South Africa, the brand is Start your own NFT advertising campaign We offer tokens that represent anything from digital art. krugerlands. NFTs were also new products with new marketing opportunities. It is still used in some specific use cases.
However, NFTs are generally positioned as a vehicle for financial investment, which has attracted groups looking to exploit them. NFTs are A popular tool for scammers, use them to lure victims under the guise of legitimate ventures and projects. This extends to the abuse of well-known brands and platforms. Just a few months ago, his two girlfriends' Twitter (now X) accounts belonging to MultiChoice Facilitate cryptocurrency fraudthe post gave the impression that the company was getting into the business of decentralized finance.
The financial incentives and inherent risks of NFTs can backfire for brands leveraging them for marketing and consumer engagement. If a customer engages with an NFT in hopes that it will become even more valuable in the future, how will they feel if that investment never shows up?
We are currently seeing this happening with the world's most famous NFT collection. Investors are currently suing Sotheby's Over the Bored Ape Yacht Club NFT auction and promotion after the NFT price collapse. Defendants in the lawsuit include celebrities Justin Bieber and Paris Hilton, who are accused of promoting the collection without disclosing their financial ties to it.
Pay proper attention to proper techniques
The lesson to be learned here is don't fall for the hype. With so many promises potentially unfulfilled, brands and marketers must approach new consumer and technology trends with caution and due diligence. While there may still be a place for NFTs as digital collectibles (incidentally, they've been around in video games for years), the industry is still trying to label companies as advanced or technologically savvy. It is of little use for positioning. Even Meta, a company that has staked its future on the realization of the Metaverse, Withdrawal from work with NFTs on Facebook and Instagram earlier this year. Meta putting the effort on the back burner also points to the problem of NFTs not being present or compatible with today's popular digital ecosystems.
To be clear, this is not to say that brands should refrain from adopting technology trends. Innovations such as artificial intelligence (AI) and 3D printing are being leveraged in exciting ways. Generative AI, in particular, can be used to develop personalized marketing campaigns and offer new levels of brand interactivity to customers. Given the hype already surrounding generative AI, many customers expect it to become a part of their daily interactions and are actively working on it. Look at the attention ChatGPT is getting.
Technology can play a leading role in how customers view and interact with your brand, but it has to be the technology that works well with your customers. And while no one can judge the longevity or long-term relevance of that technology, NFTs show that hype can be a big deception.