The Next NFT Bull Run

It's been an absolutely unhinged week in crypto.

We thought two billionaires were feuding, but one was actually acquiring the other's company...? Regardless, it sent prices tumbling as panic led to mass withdrawals.

We need something good to look forward to, don't you think?

Let's take a look at what may kick off the next bull run, and which businesses could be a part of it.

INDUSTRY ADOPTION OF L2 CHAINS

Polygon NFTs are having a moment, and Web2 brands are driving their momentum.

• Yesterday, Drifter Shoots sold out 50 $999.99 Polygon NFTs in 10 seconds... on Instagram.

• Reddit created 3 million new wallets for their Polygon digital collectibles and did $10M+ in secondary sales within a few months.

• Starbucks is using Polygon for their web3 loyalty program, Odyssey. 

Layer-2 (L2) solutions get security from their parent blockchain (Ethereum in Polygon's case), while using their own tools to address scalability issues of parent blockchains.

This means Polygon is supremely scalable and lightning-fast. All eyes will be on the adoption and long-term success of these companies leveraging Web3 tech. If it goes well, it could be a catalyst for industry-wide growth.

WEB2 USING WEB3 DATA STORAGE

Remember the company Pied Piper from the hit HBO show Silicon Valley? Part of what they did was match people with spare hard drive space with those who need it to store data.

That's what Arweave does as a decentralized data storage solution. And Meta recently selected them to store NFTs minted on Instagram. 

The more we see Web2 giants coverage adopting Web3 protocols, the more the mainstream may take notice. 👀

FRICTIONLESS ONBOARDING

Let's be honest, being a beginner in crypto and NFTs is intimidating. There are so many considerations: wallet setup and security, mobile wallet setup, fiat-to-crypto onramps, knowing what to buy, finding new projects, and navigating scammers.

83% of the world's population own a smartphone, but only 0.25% of the world has an active MetaMask wallet. While this figure doesn't represent all of NFTs, it's still important to note how much farther we have to go for mass adoption.

Reddit NFTs managed to get ~3 million people to customize avatars while calling them "digital collectibles," though they are in fact NFTs. Their fun, simple setup rebranded wallet to "vault," and was much less technical than the norm.

The tech needs to be so seamless that it's invisible to the user. That's what will take us to the next bull run.

REGULATION CLARITY

Many in the NFT space fear regulation, while many others are begging for clarity on it. The US government has been clear as mud on which existing laws apply to NFTs. There has been minimal guidance on the treatment and classification of digital assets.

Kevin O' Leary (of Shark Tank fame) recently said that getting stablecoin regulations done would have a positive trickle-down effect on the rest of the crypto market.

If there are regulations put in place, at least we will know where we stand, which could make investors more comfortable getting involved. That's why some think that this will spur a bull run.

However, it really depends on what happens. If ETH is suddenly declared to be a security? We've got bigger problems. 😵‍💫

VR/AR FOR METAVERSE & GAMING

Nobody's going to walk around with a whole current-gen Meta Quest on their head all day. When VR/AR hardware catches up with software innovations, "the metaverse" will transform digital communities forever.

NFTs enable authentic ownership of gaming, wearables, and land assets on the blockchain, and can come in the form of transferrable 3D assets. Token-gated communities will unlock unique experiences to holders.

Some simple examples: The Atari NFT sneakers by RTKFT in early 2021, where people could try on their sneakers in AR. Horse-racing game ZED RUN allows you to see your NFT horses right in your own home.

VR/AR tech has a long way to go, but the $300 billion global gaming industry is a perfect place for it to take off. However, many in the gaming industry are still fighting against NFTs. Will they be able to see the light?

SOLVING FOR ARTIST ROYALTIES

The royalties debate rages on, as most NFT marketplaces have eliminated royalties in search of market share. OpenSea has been roasted for making a tentative statement with a mysterious end date of December 8.

Smart contract innovations that solve artist royalty protections will bring more quality artists into the space. They need confidence that their royalties will be protected as they continue to add value to their projects.

The Bored Ape Yacht Club team has proposed using an allowlist to shut out zero-royalty marketplaces. Betty from Deadfellaz is working on a coalition, bringing founders together for a solution.

If there is an on-chain innovation to enforce royalties, it may help move us towards a bull run.

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