Since its launch in 2015, Ethereum has given the world dozens of different uses for blockchain, from decentralized gaming to identity verification using an immutable and open blockchain.
At the moment, perhaps the most popular application of the Eth network has become the sphere of unique NFT tokens, which create trading volumes of millions of dollars almost daily. For the creator of the project, Vitalik Buterin, this is a very unexpected fact, as he recently announced on his Twitter during an impromptu question-and-answer session.
Note that Vitalik Buterin often comments on what is happening with the blockchain he created. For example, in July at the EthCC conference in Paris, the developer called for the use of the network not only for the decentralized finance industry. According to Vitalik, Ethereum needs to move beyond positioning itself as a DeFi blockchain.
It looks like the current NFT boom is in line with Vitalik’s wish. However, the scale of popularity of unique tokens impressed the engineer anyway.
What is Ethereum for
Recall that NFTs are unique tokens , mainly issued on the Ethereum blockchain under the ERC-721 standard. The concept of linking objects from the real world (even in digital form) was invented several years ago, but it was only at the beginning of this year that the NFT sphere began to grow rapidly . A striking example of this is the dynamics of volume growth on the most popular trading platform for NFT OpenSea. In August, this figure exceeded the $ 3 billion mark .
Note that NFTs are also gaining momentum in other blockchains like Solana, Avalanche or Tron. However, the trend has indeed been set on the Ethereum network.
For Vitalik, the explosion in demand for NFT was unexpected: he announced this when asked by the founder of the Ethereum wallet MyCrypto Taylor Monahan. Buterin did not explain his answer, but in his previous interviews he has already touched on the issue of unique tokens and their huge role in the growth of blockchain adoption.
By the way, just this week, the ETH price managed to grow by more than 20 percent, which can be interpreted as the growing popularity of NFT in August.
Apart from the question of unique tokens, Vitalik also touched upon the topic of the greatest regret in the development of Ethereum, according to Decrypt . As it turned out, it was a “very quick and non-discriminatory” selection of eight co-founders of the project. For example, at the beginning of the journey, this list included the developer Charles Hoskinson, who later separated from the team and founded his own successful project Cardano .
To understand the full scale of the hype around NFT, it is worth taking a look at the DOG token, issued by the PleasrDAO organization the day before. Previously, she purchased a unique token with a reinforced image of the famous Doge meme for $ 4 million, after which she split it into billions of tokens for further sale. PleasrDAO then held an auction on the MISO platform, where it sold 20 percent of the total circulation of the 16.96 billion DOG tokens associated with this NFT. 1,796 bidders paid 11,942 WETH for tokens, or approximately $ 45 million at current exchange rates.
Another 3.3 billion DOG can be purchased right now on several decentralized exchanges, while the trading volumes for all DOG transactions have already surpassed the $ 302 million mark. That is, PleasrDAO managed to make tens of millions of dollars in revenue from one token . And this is all due to the fact that now investors are ready to pay even for a billionth share of an ordinary image fixed in the blockchain.
We believe that the main motivation for the bullish trend in the NFT sphere is the massive desire not to miss out on potential profit – each owner of a unique token expects that in the future his asset will definitely be bought at a higher price. Unfortunately, this strategy only works with the overall growth of the entire cryptocurrency industry. And as the spring market correction showed, any serious collapse in the price of BTC almost immediately leads to a fall in the value of all other crypto assets.
We think the sheer scale of NFT’s popularity this year has really surprised us. At the same time, many analysts are inclined to believe that in the future, unique tokens will attract the lion’s share of the art industry and other unusual uses. So it looks like we have yet to see the next phase of NFT growth.