February 19, 2025
Despite headlines declaring NFTs dead, their underlying technology continues to drive innovation in digital ownership, branding, and community building. While speculative hype has faded, major brands are embracing NFTs as tools for engagement, loyalty, and new business models, signaling a shift toward practical and long-term adoption.
NFTs are dead. At least this is what you can read in most headlines nowadays, covering this topic. So why do we believe that it’s the perfect time to write about NFTs and their powerful effect on brands, individual people and communities?
Because we believe in the underlying technology and the digital ownership it enables. And because we believe in the numerous possibilities and long-term business opportunities this decentralized technology creates. In this article, you will find a recap of what happened in the past couple of years and our outlook for the coming years. But first, let’s check the current pulse.
What comes into your mind when you hear the word “NFTs”?
a) Overpriced JPEGs
b) Scams
c) Ripoffs
d) Ponzi schemes
e) all of the above
Yes, yes, we completely understand. NFTs have gone from all the rage in 2021 to the ugly duckling in Q3, 2022. Some would even equate the term NFT with credit default swaps or speculative pump & dump stocks like Gamestop. If you look at the current trading volume of Opensea, the largest NFT marketplace, it has dropped by 95% compared to the same time last year. Opensea has even laid off 20% of their workforce because market conditions were worsening. How exactly did this happen and why did the mood change so suddenly at the end of last year?
Are you completely new to NFTs? Then click here to watch our educational movie where we explain what NFTs are and check out our glossary of terms used in this article.
The first mention of Non-Fungible Tokens happened in 2014, when Kevin McCoy’s “Quantum” NFT was minted on the Namecoin blockchain. A couple of years and NFT projects later, a collection called CryptoKitties, launching with the new ERC-721 standard for Ethereum, hit the nerve. It was the first time a collection got mainstream attention and traded for amounts up to 600 ETH (at that time USD 172K) on secondary markets.
Since then, there have been many successful NFT projects that have attracted stars and starlets like Gwyneth Paltrow, Paris Hilton, Justin Bieber and Jimmy Fallon. This led to even more absurd prices and even greater popularity of those little jpegs.
The art sector was the first to see a useful case in the adoption of non-fungible tokens, which certified that a unique physical or digital asset is the unforgeable original and that it belongs to one particular owner. This owner has full ownership and can decide upon his/her discretion whether to list it on the market or not. The biggest headlines were made by Beeple during a Christie’s auction in 2021, where his artwork collage “Everydays” achieved the incredible price of 69 million USD. Another example is the famous Bored Ape Yacht Club Collection, where a single monkey image was bought for 11.8 million USD.
This hype was created by a new kind of coolness and the urge to belong to this “cool kids” crowd. First, you have to be a bit of a nerd and understand what a blockchain is. Then you have to understand what a fungible token is. Then you have to know the difference between fungible and non-fungible ones. And most importantly: You have to be in the KNOW and have a feel for the latest market vibe.
Waking up at 4 in the morning to be one of the first hungry souls to mint an NFT is just what you did. Refreshing the minting page 200 times to see if your mint transaction went through really made your heart pump. Paying gas fees of 100 dollars and more is just what you did to be one of the first ones and making sure you would get a limited edition NFT. Everything is about scarcity and exclusivity —the right to sell if the price is right.
NFTs went from being a technological innovation, which finally made it possible to own and transfer ownership of digital items, to a very powerful marketing tool, where individuals wanted to be part of a super exclusive club like the BAYC.
And then, last year in late 2022, the hype was suddenly over. Prices dropped and NFTs worth millions two years ago, were suddenly a fraction of their former value. What has happened?
Many factors played a role in the downturn of the NFT market. The global economy was heading into a recession and the crypto world slid along with it. The two largest cryptocurrencies Ethereum and Bitcoin lost over 60% of their value last year, which is one of the biggest dips ever recorded since their respective inception.
Bitcoin & Ethereum to USD
Liquidity has vanished into thin air, and on top of that, a number of scandals have taken place that shook the crypto world to its core: Terra/Luna, Celsius Network, 3AC and most recently, the FTX bankruptcy, to name a few, stripped people of their trust in cryptocurrency and anything related to it.
In addition to the financial crisis, another industry seemed to have turned their backs heavily on NFTs: The gaming industry. Gaming OGs on Twitter have slashed the benefit of incorporating NFTs in games and publicly made fun of large gaming companies like Ubisoft for using NFTs in one of their games called “Ghost Recon Breakpoint.”
There was also a lot of resistance towards the high amounts of energy which NFTs minted on the Ethereum blockchain consumed. One user on Twitter called NFTs a “planet-burning scam” and he was not completely wrong about that. But after the big merge which happened mid-September 2022, the energy consumed by minting NFTs on Ethereum has been reduced by over 99%. Other popular blockchains like Polygon have always had low minting costs, coming in at a fraction of a cent per transaction.
So what else happened last year, amidst the financial market turmoil? Was everything doomed to fail? While most companies, institutions and private investors threw up their hands when they saw or heard the word NFT or anything related to blockchain, many established brands have quietly and intensively engaged with the underlying technology and launched extremely successful NFT projects last year. Just look at Nike, Tiffany’s, Reddit, Starbucks, Bulgari, Adidas, Gucci or Prada, who raised millions of dollars selling NFTs by engaging with their communities. All these brands have tapped into the potential of Web3. People are attracted to the idea of belonging to the nascent digital communities being built by these brands. Is that really so surprising considering people define their identities with those same brands?
If you haven’t heard about the term Web3 yet, you will soon encounter it if you are interested in the digital world. Web3 is “the decentralized internet designed to flip control of data and apps from centralized entities towards communities and individuals.”
This year, more brands like Porsche, Louis Vuitton and Hugo Boss are following. How does that go together, you may ask?
At the beginning of the article we said that we still believe in NFTs and Tokens in general. You may think to yourselves, “Wait, really? After everything that happened last year?”
We believe that NFTs went through the same bubble as the internet back in the day. New technologies need to be tested on a broad scale so that eventually you can see where they can really be best used. The trajectory becomes clear in hindsight. Just take a look at the Blockchain and Web3 Hype Cycle created by Gartner Research, who predict that “a tipping point in adoption will soon be reached, as risks are managed proactively.”
We truly believe that we won’t be even mentioning the term “NFT” in the future anymore but instead will be using the underlying technology seamlessly like we now use the internet. Does anybody know how the “Transport Control Protocol” (TCP) and “Internet Protocol” (IP) EXACTLY work? Thought so.
In 2022, there was this seismic shift from NFTs being regarded as “investments” and thus a vehicle of speculation, to NFTs regarded as digital collectibles and a tool for brands to build strong, engaged consumer communities.
Successful NFT projects all built very strong communities before launching their NFT. Through important social media channels like Twitter, Discord or Instagram, they have been explaining the holders’ benefits and how they might participate in the brand by holding the NFT in their digital wallet. Educational communities like myBFF have programmed many perks into their NFTs, so that holders could get other products and services for free or for a large discount. Community members were encouraged to participate in events in order to network, learn and support each other. With a strong purpose and message, brands are embarking on a new journey to build superfans and a new generation of followers.
“New technologies are building on the shift in behavior, enabling a new wave of community-first, product-later models that boost customers’ connection with a brand.”
Source: Accenture Life Trends 2023
The brands that do best will be those who shape their offering around the benefits and utility for customers, and let the technology sit quietly in the background.
It is up to the brands, which benefits they will create for their customers and how much creative power they are willing to give them. But it is more than just the power of co-creating and shaping products and experiences. It is also about ownership and future revenues, as the latest example from Bacardi is showing.
Bacardi launched a program for underrepresented female musicians who created mixtapes in the form of an NFT and listed them on a marketplace called Sturdy Exchange, a platform made by creatives for creatives. It differentiates itself by putting the artist in the driving seat and letting them control the whole process, from the creation to the listing of their NFTs. The buyers of collectibles, on the other hand, will become “fanvestors” who will earn a percentage of the streaming fee whenever their song gets played.
We all agree that last year was a very difficult year for the crypto world. Probably this year will also continue a certain reluctance and uncertainty towards everything related to crypto, blockchain and web3. Despite all this, we could see how a few companies might fearlessly plunge into the world of web3 and reap the first fruits of their ventures.
We also see great potential in tokens, be they non-fungible or fungible tokens (such as a currency, where tokens are indistinguishable and divisible.) The possibilities are truly endless when programming a token. Customers might become part owners through tokens of their favorite company and have a say in which direction the company will go. Or they can get exclusive access to events, products, bonus programs when they own and use a token. The way companies can now communicate with their customers is much more personal and targeted than ever before. The concept of “community-first, product-later” also helps companies develop products and services that really have an organic demand.
We are still at the beginning of this new paradigm shift, and mass adoption may still take a few years. But if you start building the foundation and forming a clear strategic vision now, you will be able to tap the full potential of this amazing new market in the coming years.
We appreciate the time you took to read this article and would like to hear your thoughts about it in the comments section below!
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