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Advancements in the NFT Market Spark Growth

The NFT market has grown a lot since it gained attention last year. It’s worth over USD$100 billion with a CAGR of 35.27%. However, the market has challenges and risks that need caution. At the same time, it offers good chances for solving problems.

Even though the crypto market is going down and people feel less positive about it, the wider crypto world is still changing and growing. NFTs are part of this change, like we saw in 2021.

NFTs are becoming more popular and building on what started in 2017. More people know what an NFT is now. But there are problems in this area, like scams and not doing what they promised. Unlike cryptocurrencies, NFTs are still in a smaller world with not much buying and selling, and they also have some technology problems. The current market is not working very well and is not very advanced, but it’s getting better.

Functionality and Scalability Potential

It is essential to momentarily set aside the buzz and commotion surrounding the market and delve into the fundamental technology. In its essence, NFTs represent a mechanism of digital ownership, offering a swift verification of ownership within the digital domain. A simplified view categorizes various asset types into fungible/non-fungible and physical/digital domains. Traditional cryptocurrencies fall under the fungible digital assets category, while tangible assets like fiat currency, gold, and casino chips can be deemed fungible physical assets. Stocks occasionally straddle this definition.

Envision an application that symbolizes ownership in a real company, with records primarily residing within the digital realm. In the physical world, non-fungible assets encompass properties, artworks, and tickets; in the digital sphere, they encompass intellectual property, digital artworks, gaming elements, and more.

In practical terms, NFTs address a fundamental human need: ownership. The ability to establish ownership in a trustless, unchangeable, and efficient manner carries potential well beyond the confines of the cryptocurrency or digital arena. NFTs are poised to revolutionize diverse realms, including physical art, properties, tickets, gaming, intellectual property, collectibles, music, entertainment, and media. The horizon is boundless. Nonetheless, the prevailing challenge lies in amassing a critical user base and necessary infrastructure to transcend the current form and propel this space towards greater expansion.

Do They Provide Real-World Solutions?

Presently, NFTs largely remain confined within the digital realm and are unfortunately tarnished by a negative image that deters adoption. Additionally, the space is plagued by various scams, unscrupulous actors, and dubious practices. These issues collectively erode confidence, reinforcing the notion of a “Wild West NFT market.” These factors not only discourage potential users but also underscore the pressing need for self-regulation or regulatory oversight within the sector. However, the fusion of NFTs’ contemporary nature and their potential for real-world transformation might inherently drive the market towards self-regulation and innovation to combat a significant portion of the challenges.

Self-regulation and effective governance mechanisms instituted by projects within the sector foster healthy ecosystems, enabling assets to flourish with bolstered market confidence. Moreover, resolving prevalent issues with a forward-thinking perspective on NFT sector expansion positions project holders to benefit from the essence of “survival of the fittest.” Simultaneously, substantial growth is impeded by the scaling constraints of ETH and BNB networks. With XRPL validators endorsing XLS-20D, a fresh wave of XRP-based NFT expansion heralds low fees, enhanced liquidity, and heightened marketplace resilience. The trajectory of the NFT space appears remarkably promising.

Defining practical implementations in the real world can prove challenging, particularly within nascent technology domains. Essentially, as a holder, one grapples with the demanding task of predicting the future.

While new technologies can be integrated into existing systems under the guise of “real-world change,” a more pertinent inquiry revolves around the benefits they confer. In the context of the ETH NFT ecosystem, we observe a front-runner that introduced the concept of NFTs to the world. However, subsequent innovation appears to have stalled shortly thereafter. XRPL-based NFTs seem poised to spearhead a more inclusive and scalable market, facilitating the .JPG NFT market to accommodate smaller lots and democratically priced offerings. Beyond this, speculation about the future emerges, underscoring the necessity of this exploratory endeavor for genuine innovation.

The original essence of NFTs lies in digital ownership, a concept that, when executed correctly, has the potential to enhance nearly every facet of physical and digital ownership. The prospects are boundless. For instance, consider a concert ticket transformed into an NFT equipped with an advanced “smart” contract to manage secondary sales, transfers, and rights. Enhanced contract drafting for .JPG NFTs would ensure clear ownership guidance as a foundational requirement, encompassing royalties, prints, sales revenues, copyright, trademark, and licensing. Many NFT owners face a significant risk, as they possess nothing more than a limited copyright agreement.

While some may contend that the existing modus operandi suffices, this reasoning is fundamentally flawed in light of historical patterns of innovation. The efficacy of the solutions NFTs bring forth hinges on the individuals, companies, and code underpinning them. With a focus on infrastructure, the future of NFTs appears promising indeed.

Can the Domain Encourage Positive Transformation?

Environmental, social, and governance (ESG) investing is rapidly transitioning from a niche approach to a necessity on Wall Street. Nicholas Dodd from KPMG succinctly put it: “No ESG, no capital.” This sentiment is fast becoming the rule of thumb in conventional financial markets. As digital assets gain traction, they are bound to intersect with the boundaries and regulations of established markets. This makes ESG investment principles even more vital in the digital asset arena. Fortunately, Ripple Labs and other industry players are well-versed in this domain, embracing all three pillars of ESG investing. However, the broader digital asset market, coupled with the decentralized nature, presents a more intricate picture. When assessing Proof of Work (PoW) chains through an ESG lens, they fall short on nearly every count. Taking Ethereum (ETH) as an example, the following major drawbacks are evident:

  1. Environmental Aspect

PoW’s excessive power consumption rivals that of substantial cities or even a small nation. Inherently inefficient and carbon-intensive, PoW is environmentally problematic. In 2021, each Ethereum transaction produced 103.42 kilograms of carbon dioxide. With over 460 million transactions that year, the carbon emissions totaled a staggering 47 million tonnes.

Ethereum Foundation lacks a coherent environmental management system.

The proposed shift to Proof of Stake (PoS) is a damage control measure rather than a true solution, as it doesn’t address the inherent environmental risks.

  1. Social Dimension

ETH doesn’t ensure equitable access, with minimum NFT minting fees around $70. This financial barrier excludes a significant portion of the global population, resulting in a wealth divide that hampers equal opportunities and undermines the argument for social value…

The NFT industry lacks adequate customer protection measures, relying solely on “exchange goodwill” to safeguard clients.

Failures in implementing KYC/AML for ETH-based NFTs have exposed the sector to illicit activities. These shortcomings have deceived clients, tarnished the market, and inflated ETH’s price, raising both legal and ethical concerns.

  1. Governance Component

From evading sanctions to questionable business practices, the Ethereum foundation has been embroiled in several high-profile controversies. This indicates, at best, a lack of corporate ethics and, at worst, a disregard for compliance…

Viewing the ETH foundation and EEA as token-holders, their history of offloading millions of dollars’ worth of ETH during market peaks before significant sell-offs raises concerns about their intentions and legality.

Considering JPM’s influential stakes in ETH infrastructure like MetaMask and Infura, board independence raises skepticism. While some lack of independence might be reasonable, concealing it through various means suggests questionable conduct…

Given these insights, it’s evident that the NFT ecosystem’s flagship, ETH, falls short of Wall Street’s ESG paradigm. This precludes a substantial portion of capital from entering the ETH segment of the NFT and crypto markets. To nurture a thriving NFT ecosystem, the industry must transition toward rigorous compliance, offering robust safeguards for stakeholders and customers alike.

For a substantial transformation in this sector, embracing ESG principles is paramount. This shift will not only address glaring vulnerabilities but also open doors to greater investment and confidence. However, achieving this will require infrastructure companies to seamlessly blend technology with comprehensive compliance measures.


To conclude, the NFT ecosystem is approaching the culmination of its initial cycle. Further advancements within this sector will not only challenge established players but also offer remedies to the ongoing challenges within the ecosystem. While risks persist within the cryptocurrency realm, as NFTs evolve beyond their current phase and begin tackling real-world problems, a natural and enduring expansion is expected. This growth will bestow both financial and social value upon the broader financial markets and stakeholders. The future of NFTs holds promise, contingent upon the resolution of crucial challenges.