原文：《2023 CMC Crypto Playbook: NFT Market — 2022 Recap and Outlook for 2023 by Sfermion》by Sfermion

Compiled by: Katie Gu

CMC spoke with Sfermion investor Mo Patel to provide a detailed overview of the NFT market’s performance and growth in a challenging 2022, as well as insights into the market outlook for 2023.

Q1: How to measure the success of the NFT market in 2022?

The NFT market faced a sharp drop in volume in 2022 due to the bear market and overall downturn, and people were worried that NFTs were dead. However, if the bull market-driven 2021 is excluded, the NFT market in 2022 is actually booming in many areas in terms of trading volume and development. The slight decline in NFT transaction value compared to the decline in NFT transaction volume shows that people are still using NFTs, and the downturn is just a broader market trend.

For example, the rapid adoption of L2 solutions such as Arbitrum and Optimism means the growth of new addresses holding NFTs, which is a sign of an increase in the number of construction activities supporting the L2 field. At the same time, Polygon is also actively involved in NFT business development and continues to attract outstanding Web2 talents and customers to join the blockchain. Music NFTs have also been successful on various platforms, with high sales and increased minting.

Web3 social platforms using NFTs are also gaining traction, such as Aave's Lens Protocol, which has nearly 100,000 users since its launch in May 2022. In addition to a lot of quantitative data, there is also a lot of qualitative data that shows that the recent NFT craze has led to a large number of strong Web2 builders entering the Web3 field and building with NFTs. This highlights the success of the NFT market and the global attention it has gained in a very short period of time.

These new entrants include leading Web2 founders and game studios who have built mature products in the Web2 space and are now using Web3 and NFTs to drive new applications, such as NetEase, Pixel gaming, Wildlife, Japanese gaming giant Square Enix, Ubisoft, and social game Zynga. First-tier brands such as Gucci, Nike, Adidas, and Prada have adopted NFTs in their marketing, using NFTs as a medium to connect with customers. Instagram, which has more than 500 million daily active users, is now actually an NFT market. Reddit suddenly used NFTs as the core technology of its digital collectible avatar plan this year, bringing in a large number of new users and wallet holders.

Web2 giants are also taking advantage of the world's largest sports and entertainment events, such as the World Cup and the Super Bowl, to enhance real-life (IRL) experiences by leveraging NFT airdrops, such as the Coca-Cola NFT airdrop we saw at this year's World Cup. Web3 gaming company Limit Break plans to offer free minting as early as next year's Super Bowl event. By scanning the QR code, you can get free NFTmint.

The above applications of NFT allow for seamless trading of digital property rights and interoperable assets. Despite the current market volatility, the continued involvement and innovation of top builders and brands in the NFT space is laying the foundation for strong future growth. These projects will become active and, ideally, rise in tandem with the market.

Although the overall crypto space is sluggish under the current bear market, we are still optimistic about the adoption of NFTs and many applications for online consumers. Whether it is a bear market or a bull market, players will always play games and consumers will always spend money. If NFTs continue to unlock these digital property rights and allow owners to trade in these games using interoperable assets, it will only be a matter of time before quantitative data is obtained. From this perspective, 2022 can be seen as a very successful year for NFTs.

Attached below is the list of the “Top 10 Best-Selling” NFTs of 2022:

Bored Ape Yacht Club – $1.57 billion

Mutant Ape Yacht Club – $1.14 billion

Otherside - $1.1 billion

Azuki - $849.9 million

Moonbirds - $613.4 million

CloneX - $605 million

CryptoPunks – $575.2 million

Doodles - $391.6 million

Sorare - $318.1 million

Axie Infinity - $291.1 million

Q2: Which NFT verticals and use cases will be the focus in 2022?

The main focus in 2022 remains Web3 games and related consumer services such as loyalty and ticketing systems, while metaverse experiences and Web3 social applications have also received attention. NFT data analysis for tracking on-chain assets is also an ongoing trend and has been further built.

We are also seeing a "cooling" of the DAO and Guild tooling narrative. In 2022, the P2E gaming model collapsed due to the bear market, poor token economics, and failure to provide a sufficiently compelling gaming experience to retain players. It's clear that the industry is beginning to realize that Web3 gaming and the Metaverse will take time to become mainstream. As a result, our focus is shifting to building the right experience and infrastructure around this.

This change in focus will foster development in areas such as gaming infrastructure to build better gaming applications, wallet and market infrastructure, NFT products that can serve a more complex metaverse, and Web3 social applications and products that help unlock Web3 intellectual property (IP).

In 2021, the popularity of avatar NFTs has spawned a large number of new IPs, mainly interactive pictures and images. The goal in 2023 will be to create more advanced game products and applications to help unlock and enhance IP through the potential application of AI-based utilities or in-game utilities.

Q3: Why did NFT “derivatives” such as NFTFi and SocialFi fail to meet expectations in 2022?

Some 2022 NFT “derivatives” have failed to live up to last year’s massive hype.

Although "Metaverse" is a buzzword in 2022, the industry now understands that this hype is premature and that fully immersive digital experiences take time to develop. It is not even clear whether the Metaverse will be PC-based, AR-based, VR-based, or a hybrid of the two, which will ultimately be determined by the market. Therefore, the focus now is on creating the infrastructure and experiences that make up the overall Metaverse experience, starting with small games, for example.

DAO tools (a set of software, applications, and smart contracts that decentralized autonomous organizations use to operate) were also massively hyped in late 2021 and early 2022, but lost traction this year as the market realized it was building a product to meet a need that had not yet been effectively fulfilled. DAOs are still in their infancy, but are expanding rapidly and clear use cases are emerging. As DAOs continue to form and operate, especially in a bear market, people now have a better understanding of which tools can support DAOs and meet their needs.

Guild tooling suffered a similar fate in 2022, with investors and users realizing they jumped on this gaming-driven niche too early. In hindsight, it was a mistake to think that first-generation game modes like Axie Infinity provided a blueprint for all future games. As more games enter the market and utilize guilds in different ways, it will be important to remain flexible and adaptable.

NFTFi also failed to meet expectations, mainly due to market downturns and reduced liquidity, which will take time to recover. Nevertheless, it has clearly demonstrated the huge potential of NFTs in providing powerful financial applications, such as issuing tokens and representing bonds, as we have seen in projects such as Solv Protocol (a financial NFT platform used to issue bonds).

Over time, direct NFT financial services such as loans will improve with pricing, and NFTFi will remain one of the focuses in 2023 due to better liquidity and more users than before. Although many users are hesitant about the risks of NFT-based loan applications, it is important to note that the long-term prospects of NFT in the financial services sector remain strong and it is expected to take several years to fully "fire on full steam".

Q4: What is the development trend of NFT in 2023?

Many companies are building new NFT standards, using new economic models (such as free-to-own), and challenging new verticals such as on-chain experiences. These companies (including strong Web2 companies and studios making persistent Web2 games) are innovating rapidly and even porting Web2 IP to Web3. These companies bring things that fit the Web2 world, such as casual, mobile, and PC console games, and use NFTs as a technology to enhance these experiences.

We are also tracking how Web2 brands and intellectual property (IP) entering the NFT field apply NFT, and the birth of new Web3 native IP will continue to be a core focus in the NFT field.

The interaction of NFTs and AI, such as art and game asset creation, game design, games using AI-based NPCs, and the overall creation of cross-media content, remains a focus. The evolution of wallets and markets towards providing premium services for specific users is also exciting. We are seeing a surge in building wallets that are more suitable for Web2 and adding elements such as social factors and DeFi functions for DeFi users. Independent markets for specific collectibles, such as those focused on games, are also emerging. In general, the focus is on the NFT vertical field and where further development and improvement can be made in the future.

In addition, L2 advances have attracted the interest of builders, especially in the field of zero-knowledge (ZK) rollups, which will "show their strength" in 2023. ZK-rollups are expected to make NFTs more accessible and convenient to use, which will lead to an increase in the number of builders building on these tracks and using NFTs for social media experiences, thereby bringing in more users.

Web2 social media platforms are also applying NFTs. Reddit allows for the integration of avatars, and Twitter allows for the display of avatars. However, avatars are really just “Mavericks trying out the knife”. Instagram has gone a step further and can publish and mint content as NFTs. These are just the applications for version 1, and we are very excited to see where V2 and future iterations take NFT innovation. It will be interesting to see how NFTs are used to enhance the social media experience over time.

In 2022, we also saw the emergence of a new generation of NFT markets, such as LooksRare, X2Y2, Blur, and Magic Eden, which are challenging OpenSea’s dominance and reshaping the NFT landscape.

There are many strong players and well-established markets that are innovating with token-based airdrops, advanced social features, shared liquidity, focusing on certain markets (like hardcore traders), having optional royalties, going multi-chain, or focusing on specific genres (like games, music, or video). These products and applications are just beginning to fully understand their user base and target them accordingly.

For example, Magic Eden and Fractal understand that they are gaining a lot of traction on the Launchpad market, so they are doubling down on that front while focusing on how to play. Meanwhile, OpenSea continues to defend and enforce NFT royalties, and they are joined by companies like X2Y2 who choose to respect royalties for creators. It will be interesting to see how the debate over royalties plays out over time, with strong support for both camps.

We look forward to how these markets cater to users and enhance the user experience through features such as multi-chain, multi-wallet support, fraud detection, and better recommendation tools. For example, with the emergence of NFT series, it is becoming increasingly important to help users find what they want more efficiently and create a more personalized market experience.

Q5: Where will venture capitalists deploy capital in 2023?

Among the current NFT verticals, VCs are still most interested in Web3 games, despite their poor performance this year, as it is widely believed that games will eventually bring the masses into Web3. This extends not only to NFTs, but also to the crypto space, such as using hardware wallets, software wallets, interacting with DEXs, and using on-chain lending resources. As users enter the crypto space through Web3 games, this adoption will eventually permeate other areas of cryptocurrency. Therefore, VCs are still looking for strong studios and builders in the Web2 gaming space, as well as strong infrastructure.

In addition, venture capital is also paying close attention to NFT IP. Every year, new IPs are likely to emerge in the NFT field, as well as unlocking existing IPs to enhance the community experience, which is exactly what the Web2 field lacks.

Web3 social media is another exciting frontier, and unrest on Web2 social platforms (user anger over censorship and monetization of personal data) will attract users to Web3 social platforms. However, it is still in its early stages, with only a few platforms actively building and gaining traction.

There are many games that choose to cater to both Web2 and Web3 users. It is possible to have a game that is considered "Web2.5", and Web2 players (who may not be interested in using NFTs or tokens) can still experience the game while slowly moving into Web3. In the long run, this approach of prioritizing player intent makes more sense, rather than trying to force players to accept NFTs and tokens from the beginning.

Our New Year's resolution is to be able to actually experience all the games we are looking at and really understand what is feasible and what is not feasible, as games take a long time to build. As Web3 social media develops, anyone can start creating their own on-chain credentials and social presence. The same applies to L2 ecosystems and understand which ecosystem is best for the end user based on their interests and goals. As the user experience of cryptocurrency improves year by year, we expect to see more and more users using cryptocurrency and NFT-based applications every day.