Binance’s head of NFTs, Helen Hai, believes that NFTs are around to stay but haven’t reached their full potential.
Despite NFT Google searches being down 74% by the end of May and plummeting sales figures for the Bored Ape Yacht Club collection since January in the wake of the Terra collapse, one executive believes we haven’t yet scratched the surface of NFT potential. Binance’s head of NFTs told Yahoo Finance that she had not purchased many NFTs because she considers their real value has yet to emerge. “I still think the real value creation of the NFT is not really here yet,” said Helen Hai adding that the way to push NFTs forward is to bridge the gap between the user and the creator. “How can we actually connect everything together?” she says.
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NFTs are digital certificates of authenticity “minted” on the blockchain that immutably attribute digital or physical item ownership. In most cases, an NFT is not an actual digital image of a cartoon ape or an 8-bit cartoon character. However, it contains a URL that links to a server from which the file can be downloaded.
Are NFTs subject to systemic risks?
Despite celebrity endorsements and FOMO catapulting NFTs into the limelight in 2021, the first quarter of 2022 has seen NFT sales cool by almost 50%. This plunge comes amidst a rocky time for the broader crypto market, with the crash of TerraUSD, the subsequent bitcoin sell-off, and the de-pegging of Tether, the world’s largest stablecoin, to $0.95. Hai says people are trying to understand whether NFTs carry the same risk as to the broader crypto market, adding that the line between one risk and systemic risk is very fine. “There’s panic. People are wondering, “Is this actually a single risk, or is there going to be systemic risk?”
Invest in NFTs with long-term utility
With threats of recession and the Russian invasion of Ukraine putting further pressure on people’s pockets, Hai stresses the importance of judging the value of any NFT project, as all projects are not created equal. “People need to differentiate and appreciate. It’s like going to buy art. This is a very judgmental thing.” You shouldn’t invest in crypto simply because a famous person creates much hype around a specific project and wastes your money, Hai says. Instead, you should invest in an NFT with long-term utility.
“That’s how you actually create a sustainable future for NFTs,” said Hai.
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