NFT Communities Thrive Amidst Market Fluctuations, OpenSea CEO Highlights Potential

NFTs—digital assets based on blockchain technology that represent ownership of unique items— peaked in trade volume at more than $3.2 billion per week in August 2021. Since then they have nosedived to under $100 million per week. Even through this downturn, enclaves of creators and collectors continue to flourish. They’re constantly on the hunt for new use cases and breakthrough technologies within the NFT ecosystem. OpenSea CEO and co-founder Devin Finzer is still upbeat about NFT’s long-term prospects. He views them as a critical component of digital ownership as more and more of our lives are conducted online.

The Evolution of NFTs

Finzer says the way NFTs have evolved is a very natural and expected shift. He points to the fact that enthusiasm usually floods in at the start with new use cases. That’s typically followed by a tide of crushing disappointment, as we saw in 2021.

"People get interested in the use cases, and there's this sort of period of mania, and that's really what was seen in 2021." - Devin Finzer

To downplay the speculation, Finzer stresses the flexibility and functionality of NFTs. He points to examples such as Claynosaurz, which provides animations competing with those produced by the big entertainment corporate players. He emphasizes Azuki’s founding mission to celebrate anime’s cultural legacy while paving the way for new creator-funding models.

Online Identity and Community

More often than not, new NFT projects are leaning hard into this “online identity” angle. 0xExceed’s KazeCreations, for instance, has gone beyond profile picture (PFP) NFTs to include banners and other high-fashion physical goods. This change reflects the new and innovative ways individuals are using NFTs to connect with their communities and represent themselves.

"There's something about owning a digital asset and going and making that purchase and then setting it as your profile picture on social media that demonstrates that you're part of that community," - Devin Finzer

In spite of the market ups and downs, committed communities are still deeply engaged with NFTs. 0xExceed, a web3 esports project fully invested in NFTs, recognizes this deeply engrained commitment.

"People keep saying NFTs are dead, but our community remains passionate," - 0xExceed

"The technology is evolving, and so are we." - 0xExceed

Finzer has a point when he suggests that a healthy NFT market includes multiple price ranges. From inexpensive NFTs within reach of everyday people to one-of-a-kind, extremely valuable creations.

"A healthy ecosystem can have an entire economy where NFTs are bought for 50 cents and the rarest one is $50." - Devin Finzer

Physical Items and NFTs

Finzer says that the intersection of physical items and NFTs is one of the most exciting new fronts. Toikido exhibited Pudgy Penguins at New York’s 2023 Toy Fair. As the above examples illustrate, NFTs are rapidly becoming integrated with physical products. As Luca Netz, our co-founder and chief executive, points out, robust intellectual property (IP) will be crucial in facilitating crypto adoption.

"the Trojan horse for crypto adoption is IP" - Luca Netz

Pudgy’s transformation from a PFP collectible used as profile pictures to an ecosystem of mainstream-friendly merchandise reinforces this concept. Supply constraints helped crypto ecosystems token PENGU, which is based on Solana, rally in trading volume this year, pushing it into the top 10. Finzer believes that NFTs will play a critical role in society moving forward, especially as more people engage in the digital world.