Even before the FTX crash, non-fungible token (NFT) pools were already feeling the impact of the crypto winter, with trading volumes plummeting by 98%. With the debacle of FTX, the once thriving space appears to have hit the final nail in its coffin. However, industry executives are optimistic about the space’s recovery.
With a massive amount of users’ funds stuck on the FTX exchange in the midst of a liquidity crisis, users have been trying devious ways to withdraw their funds. One of the alleged ways to withdraw balances is to buy NFTs located in the Bahamas. Many community members have criticized this method for bypassing bankruptcy laws, even mocking the usefulness of NFTs in the process, and painting a negative picture of NFTs.
However, Oscar Franklin Tan, CEO at NFT platform Enjin, believes that this is not a fair summary. Speaking to Cointelegraph, Tan said that while NFTs have been used, other items could also have been used. “It has nothing to do with NFT technology, but more with this loophole for users of the Bahamas,” he noted.
The CEO is also positive about the survival of the NFT space despite the effects of FTX and the bear market. Tan highlighted that the space should refocus on how NFTs show acceptance of digital ownership, new models for content creators and funding for content creation. He explained that:
“Admittedly, there has been a lot of hype and overabundance for some models, but that is true with all the new technologies. The NFT space will certainly stabilize and coalesce around the strongest communities, and then we will see a second generation of smarter and more sustainable NFT models.”
Tan highlighted that in order to recover, NFT projects must focus more on utilities and building their communities. Avoiding short-term speculations and unrealistic roadmaps is a must. Instead, it should have long-term sustainable value.
Related: FTX Contagion: Which Companies Have Been Affected by the FTX Crash?
Various players in the NFT space also echoed the sentiment. Jamie Thompson, CEO of NFT game studio Vulcan Forged, commented that the proven utility market NFTs are bound to continue. Thompson told Cointelegraph that the same cannot be said of NFTs based on speculation and bragging rights. However, the executive said that these types of NFTs will “suffer more from frugal hands” as users wait for a better market. Thompson further said:
Less guesswork, more mandatory benefit. As with tokens, if an NFT is essential to the project’s functionality or user existence, there is less worry about price fluctuations. In essence, an item for gaming, access to certain features, and access to added value. ”
Meanwhile, NFT artist Jonathan Schultz believes that the era of interestless NFTs is waning. “That’s why we’re seeing more projects with a lot of use cases and facilities,” he said. Schultz also told Cointelegraph that for space to survive, it must move beyond what he described as the “taste” of things. This means building important projects and helping the entire space.
Alex Salnikov, co-founder of Rarible, also commented on this topic. According to the CEO, while current demand for NFTs may be lower, high-end brands and world-famous athletes are jumping on board. It’s important, Salnikov said, not to just view pricing as the only consideration when looking at the current state of NFTs. he said that:
“The space will survive by looking beyond cash and focusing on building new technological innovations that offer new types of utility. We have been through bear markets before and we will navigate this market as we have in the past.”
In addition, the co-founder of Rarible also urged the community to focus on winning back people’s trust and rebuilding momentum, similar to the NFT craze of 2021. However, Salnikov also emphasized that it should be more sustainable.
With FTX’s NFT market caught in the midst of the company’s collapse, Nick Rose Ntertsas, founder of NFT platform Ethernity, offered suggestions on how to do it better. Speaking to Cointelegraph, Ntertsas said that the centralized exchange-based FTX model of its NFT platform has been closed. It is to explain:
This model should have been democratic and transparent. NFTs should eventually become cross-chain and be interoperable, not isolated by a single gatekeeper, which is something we’re working on and excited about.”
Unlike other sentiments, Ntertsas believes there is no one thing NFT projects should focus on, as different projects will have different goals. However, the CEO wants to see more projects that challenge the space to “rethink what’s possible with NFTs.”
