Chapter 1: NFTs: A Resurgence on the Horizon

The NFT phenomenon peaked in early 2022, only to see a sharp decline as the broader cryptocurrency market faced challenges. However, recent developments indicate that NFTs may be on the path to revival. Here are some indicators of this potential resurgence.

In December, NFTs re-entered mainstream discourse when Donald J. Trump unveiled his “digital trading cards,” which featured his image superimposed on various exciting backgrounds. The initial release saw the cards sell out within hours, with the resale market inflating prices to ten times the original cost. Although resale values have since stabilized, trending back toward the initial $99 price point, Trump's venture has proven financially successful despite backlash from political circles. This event sparked renewed interest in NFTs, evidenced by a noticeable spike in Google searches related to NFTs following the announcement.

An NFT, or non-fungible token, is a distinctive digital asset that signifies ownership of a particular item or digital content. Unlike interchangeable cryptocurrencies such as Bitcoin, NFTs are unique and cannot be substituted for one another. They typically represent ownership of digital artwork, collectibles, and other digital goods, and can be bought and sold like other assets. A pivotal aspect of NFTs is their existence on a blockchain, which facilitates secure and transparent record-keeping of ownership and asset transfers.

Signs of NFT Revival as We Enter 2023

#### Competitive XRP Market for NFTs

In November, Ripple’s Chief Technology Officer, David Schwartz, revealed a new NFT standard on the XRP main network via an amendment termed XLS-20. The onXRP NFT marketplace, leveraging the XRP Ledger, recorded over 7.3 million XRP in sales, equating to around $2.45 million. This positions onXRP as the leading NFT marketplace on the XRP Ledger, with xrp.cafe and xMart trailing with sales of 434,000 XRP ($146,000) and 57,003 XRP ($19,184) respectively. OnXRP has also outperformed in terms of artworks sold, with 21,469 NFTs compared to just 2,451 on xrp.cafe and 211 on xMart.

Schwartz posits that the application of NFTs may extend beyond digital art. Ripple’s $250 million NFT fund has backed projects that explore NFTs in sectors like ticketing, music, and film. He emphasized that the XLS-20 amendment would simplify external projects' integration with Ripple’s technology, leveraging low fees and a stable network.

#### China to Unveil State-Supported NFT Marketplace

China is set to launch its inaugural NFT marketplace, the China Digital Asset Trading Platform, on January 1, 2023. This marketplace, developed in compliance with national regulations, will be managed by the government-supported China Technology Exchange and China Cultural Relics Exchange Center. It will utilize a blockchain known as the "China Cultural Protection Chain," allowing for the trade of digital collections, copyrights, and property rights.

This blockchain is touted as “the only credible depository service platform for tradable digital assets” within China. It will offer services such as digital asset registration, rights confirmation, and monitoring of copyright protection for both individuals and institutions. Additionally, the platform is collaborating with the "Digital Collection Home," the first metaverse digital collection credit evaluation platform in China, giving users access to digital collection-related data and services.

#### Generative Art in QQL NFTs

QQL, a series of Ethereum-based NFTs featuring generative art, was created by Tyler Hobbs and Dandelion Wist. Hobbs is celebrated for his Art Blocks project, Fidenza, which achieved several seven-figure sales in 2021. Upon its launch, QQL minted $17 million in NFT mint passes, despite prevailing market conditions.

The QQL artwork is generated using an algorithm on the blockchain, producing stunning patterns of colorful circles. Buyers of the mint passes can influence the final artwork, effectively becoming a part of the collection. Furthermore, the initial artwork seed creators receive a portion of royalties when their art is resold, introducing a gamified aspect to NFT minting.

The video titled "Line Goes Up – The Problem With NFTs" explores the challenges faced by the NFT market and how they impact the industry's future.

#### Proof-of-Merge NFTs Celebrating the Ethereum Merge

Mason Hall and Michael Blau, affiliated with Andreessen Horowitz, developed dynamic NFTs named “Proof of Merge” to commemorate the Ethereum merge event. These NFTs serve as proof of attendance for individuals who engaged with the Web3 network prior to the merge.

The NFTs evolved in real-time through the smart contract, beginning as separate black and white circles and morphing into partially merged designs during the merge. Once completed, the NFTs transitioned to their final form, featuring a Yin-Yang symbol inspired by an Ethereum panda bear meme, symbolizing the fusion of the blockchain’s execution layer and consensus layer.

#### NFT Trading Bots on the Horizon

RelyFund is preparing to launch its successful AI trading bot platform as a customizable NFT in early 2023. This NFT will grant access to the trading bot platform, allowing users to tailor their bot settings. Investors contributing the first $1.5 million will gain priority in acquiring the NFT, highlighting the growing trend of NFTs serving practical purposes.

#### NFTs as Intellectual Property Holdings

The Nouns NFT project, initiated in 2021, emphasizes community governance and open-source intellectual property development. The Nouns collection auctions a pixelated Noun profile picture (PFP) NFT daily, amassing approximately 29,150 ETH (around $37.8 million) in its treasury.

Noun holders vote on proposals and have allocated funds for various initiatives, including promoting Nouns at crypto conferences and supporting Web3 education in Brazil. They've also engaged in charitable efforts and even fielded a professional esports team. Prominent brands, including Bud Light, have collaborated with the Nouns project.

#### Reddit’s NFT Avatars

Reddit has integrated NFTs into its platform, launching “collectible avatars” that gained traction after their summer 2021 release. Minted on the Ethereum sidechain Polygon, these NFTs have become highly coveted, with over 7 million minted and more than 5.3 million unique holders. The success of Reddit’s NFT initiative is a significant milestone for both the Polygon network and the broader NFT industry.

#### NFTs in Crypto Play-to-Earn Games

Several gaming platforms are leveraging NFTs to enhance digital collectibles. Notable games include:

• Alien Worlds: A virtual strategy game running on Ethereum, BNB Chain, and WAX, featuring quests and competitions with native currency Trilium (TLM).
• Tamadoge: A platform that merges meme coin popularity with play-to-earn mechanics, allowing players to mint and battle their pets.
• Gods Unchained: A competitive card game that allows users to trade and sell cards as if they were tangible assets.

The narrative around NFTs has evolved significantly. While the market for purely collectible NFTs still exists, the increasing utility and application of NFTs across various sectors hint at a promising future. The integration of NFTs into gaming and fashion signifies a trend that could elevate their adoption further.

In the future, NFTs may become as commonplace as coupons in grocery stores—single-use, easily exchanged, and tied to real-world value.

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The second video titled "NFTs Are Dead! - Could They Come Back???" examines the potential for NFTs to regain popularity and relevance in the evolving digital landscape.