Forecasting the 2024 Resurgence of NFTs

• NFTs Gaining Traction in Web3 Space
• Next-Gen NFT Products: A Different Outlook
• The Everything Token: A Glimpse into Crypto's Future
• Mass Market NFTs: A New Trend
• NFTs and Consumer Accessibility
• NFTs Turning Customers into a Community
• NFTs and Small Businesses
• Disclosure

NFTs Gaining Traction in Web3 Space

As 2023 draws to a close, a renewed interest in Non-Fungible Tokens (NFTs) is evident. Major companies are making their foray into the NFT world, and blockchain-based games are being launched. In addition, NFT-infused brands are selling at both online and physical stores. NFTs, as a result, are set to be a significant catalyst for the adoption of Web3 in 2024.

Next-Gen NFT Products: A Different Outlook

The succeeding wave of successful NFT products is expected to deviate from the high-value, limited quantity assets we've been accustomed to. These NFTs will be mass-produced and offered at a more affordable price, thereby appealing to a wider consumer market. They will directly create value instead of being speculative. A notable number of customers may unknowingly use these digital assets on crypto rails.

The Everything Token: A Glimpse into Crypto's Future

The Everything Token, available for pre-order and set to hit stores on the 23rd of January 2024, predicts the future of crypto.

Mass Market NFTs: A New Trend

Experiments with mass-market NFTs as digital collectibles have already been conducted by renowned brands like Nike, Reddit, Starbucks and even former U.S. President Donald Trump. Concurrently, NFT-native brands such as Pudgy Penguins, Cool Cats, and Kitaro Studios have experimented with phygital activations. These activations include a physical product with an associated NFT, either directly linked to the product or through a claim code delivered at the point-of-sale.

In addition, established players like Ticketmaster and newcomers such as tokenproof and YellowHeart have explored NFTs for event tickets, memberships, and other forms of fan engagement. These provide consumers unfamiliar with NFTs an opportunity to experience the digital ownership associated with this emerging technology.

NFTs and Consumer Accessibility

Early adoption of NFTs required complex self-custodial wallets. However, the current wave of NFTs feature a platform design that masks the underlying blockchain technology through a partially or fully custodial wallet system. This does not prevent consumers from deriving utility from these tokens, nor integrating them into their digital identities on social media and other platforms. It also doesn't prevent them from participating in the broader NFT ecosystem if they wish to do so.

Making digital assets more technologically accessible and affordable greatly expands the potential market and lays a solid foundation for brands to build upon.

NFTs Turning Customers into a Community

As described in the upcoming book, The Everything Token, NFTs provide a novel way for a company or a creator to leverage decentralized value creation. This transforms their customers into a community linked through the asset to the brand and each other. Meanwhile, ownership motivates consumers to share the brand and contribute to its growth.

NFTs and Small Businesses

This strategy is not only effective for major companies but also for small businesses and solo creators. It is most effective when the community is large and growing. To maximize the benefits of their NFT products, brands like Starbucks or Nike need to make these products accessible to their entire global customer base. Also, customers who wish to join the brand's digital ecosystem should be able to do so. This indicates that the smaller, more broadly accessible NFT products are not just experiments but are, in fact, the future.

Brands are expected to go big with small NFTs in 2024. As they do so, they are likely to attract many more consumers into the space.

Disclosure

Both Kaczynski and Kominers hold digital assets, including fungible and non-fungible tokens from some companies mentioned. They also offer advisory services on marketplace and incentive design, Web3 strategy, NFT brand-building, and other topics. Additionally, Kaczynski is the Community Lead for Starbucks Odyssey, and Kominers is a Research Partner at a16z crypto, which invests in crypto projects, including NFT projects and platforms. For a16z disclosures, visit https://www.a16z.com/disclosures/.

Edited by Jonathan Stoker