During the NFT rush near the end of 2021, millionaires were made and fools were discovered. The jump from web2 to web3 was just beginning to start and even we at Blushark Media were beginning on our journey. Everyone was waking up with the promise of a new life and their hope hanging right at their fingertips thanks to some digital images and promises made by those who understood how to code on the blockchain.
NFTs were here and according to the developers, social media managers, and community managers they were here to stay and change things for the better. There were news reports, social media blitzes, and tons of celebrities involved, and those that created these “digital collectibles” ended up becoming millionaires overnight.
Selling “collections” of 10,000 images at $200–300 a pop or even more ended up netting creators multimillion-dollar paydays while taking money from people who were foolish enough to “believe in the hype.” So many promises were made and so many people would see false growth and think they had an opportunity to get rich as well. This was all until things like “wash-trading” and “rug-pulls” came into play.
Trickery such as wash trading was especially devious as the people within the community were purchasing the NFT, selling it at a higher price, and recycling those actions to artificially raise the value of the NFT and make it seem like things were successful or that people had a chance. Celebrities bought into the projects for tens of thousands if not hundreds of thousands of dollars only to have some of their NFTs stolen and held for ransom.
Rug pulls were the next devious move made by developers and their teams. Constant trickery to steal money and get away was rampant within the NFT sector. A rug pull as you may now know is when the developer or team waits till they have a large amount of funds from a sale and then disappears into the night like an evil Batman.
All of these shady tactics staled the image of NFTs and what they could potentially bring to the table. What could have been an amazing new way to give power back to the people turned out to be just another way to scam people and take from them the money they so desperately needed. The developers took advantage of people and their hope to get out of the rat race we are all so chained to.
Currently, All NFTs are losing value even the most prolific NFT collection: The Bored Apes by Yuga Labs is losing a lot of the power it once had. The market is still low and though there are a few sales here and there, it is hardly what it used to be. A recent study and report by dappGamblhas looked at the price of thousands of collections and discovered that 95% of NFTs are worthless. There are over 70,000 NFT collections out there and 69,705 of them have a market cap of …zero and this data can be backed up by CoinMarketCap and NFT Scan.
So to put it in a way Gen Z says, NFTs are “cooked” One could even say they are burned in the current state they are in. Companies like Starbucks which created NFT collectibles with its Odyssey initiative have now backed out of such practice. The Odyssey initiative has been shuttered and Starbucks in a sense carried out a rug-pull of its own.
With the way things are currently NFTs are probably not going to be making any real moves anytime soon but there are some real ways NFTs can be used it just depends on the developer and the team but the biggest hurdles- the hurdles of public opinion and trust- may just be too high to leap over anymore.