This article is contributed by Felix Xu, cofounder of ARPA and Bella Protocol.
Non-fungible tokens (NFTs) had a fantastic journey in 2021, inaugurating one of the most remarkable episodes in the history of emergent decentralized industries. NFT trading volume stood at $2.5 billion in June 2021. It surged ten times in the next six months, with total NFT sales reaching a whopping $23 billion by December 2021. In contrast, the 2020 total NFT trading volume amounted to just $100 million.
To grasp the extraordinary success story of NFTs, we need to chart their trajectory throughout the last year. This article will adopt a chronological approach to explain the NFT craze and what lies ahead of us.
Laying the foundations
Cryptocurrency historians often debate whether any singular event led to the explosion of NFTs in the crypto domain. While there is no definite answer, the sale of Beeple’s NFT art for $69 million created ripples across the global market. People suddenly saw a spurt in NFT projects with attention-grabbing headlines on newspapers and web portals. Moreover, most of these NFTs reimagined the nature of artwork with their finite series of algorithmically-generated collectibles.
CryptoPunks, one of the earliest NFT generative art projects on Ethereum, surpassed $1 billion in total sales in August 2021. A single CryptoPunk collectible sold for $10 million in December, becoming one of the most expensive NFT collectibles. Another popular NFT series to recently cross the $1 billion mark is the Bored Ape Yacht Club (BAYC). These projects became immensely popular with the active support and promotion from NFT influencers.
For example, NBA player Stephen Curry bought a BAYC for $180K while hip-hop sensation Eminem bought another BAYC for $500K. The diverse NFT influencers’ community ranges from Reddit co-founder Alexis Ohanian and comedian Steve Harvey to Dallas…
