Binance’s BNB Chain appears primed to remain competitive in 2023 after facing down last year’s headwinds, according to the crypto analytics firm Messari. Messari research analyst James Trautman notes in a new analysis that the non-fungible token (NFT) sector of the BNB Chain had a “breakout year” in 2022. The chain’s secondary NFT sales volume […]
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Discover the unique world of phygital NFTs and how they combine the physical and digital realms to create a new level of ownership and authenticity.
The world could be tokenized, and NFTs could be the means through which we perform commerce. Could that be the future?
Phygital nonfungible tokens have a strong value add and can be a part of any brand’s community initiatives. Considering the fact they are new, there is a buzz around them that brands can benefit from. With many Web2 incumbents and digital native companies jumping on the bandwagon, phygital NFTs are poised to be a major part of the community and marketing initiatives of companies.
However, the widespread adoption of phygital NFTs will likely depend on the development of practical and cost-effective solutions for storing, tracking and verifying the physical items represented by the NFTs. Additionally, phygital NFTs will also need to compete with conventional NFTs, which offer many of the same benefits without the added complexity and cost associated with tracking physical items.
Moreover, it remains to be seen how these initiatives can scale sustainably and add value to the brands utilizing them. Legal and regulatory frameworks around phygital NFTs also need clarity before phygital nonfungible tokens can become a household phenomenon.
Proof of physical presence (PFP) NFTs have been the poster child of the NFT paradigm. Can phygital nonfungible tokens dethrone the king by virtue of their utility?
The PFP NFT acts as a certificate of authenticity, enabling the owner to prove that they own a unique, one-of-a-kind item, and can be used to verify the authenticity and ownership of physical items in the same way that traditional NFTs are used to verify the authenticity and ownership of digital assets.
Their value depends on demand and the utility around the NFT. While phygital NFTs also bring a physical touchpoint to the digital realm, the value of an NFT and its worth are contingent on a multitude of other factors, not to mention the appeal of the art.
So, it’s difficult to say that phygital nonfungible tokens are better than conventional NFTs. Both have their advantages and disadvantages, and the ideal solution may depend on the item being monetized and the intended use of the NFT. However, phygital NFTs promise to be the bridge between the digital and brick-and-mortar world. They are also bridging Web2 brands with Web3 fundamentals.
On top of the community experience, phygital NFTs also help build traceability into a product that is being sold to a customer. The history of the product and its providence can add credibility and commercial value to a physical good.
Community experience is just one big use case of phygital NFTs. Considering nonfungible tokens are authentic and tamper-proof, any person buying phygital NFTs can trace the evolution of the goods they buy right from the person who purchased them first. This helps build authenticity and trust, one of the cornerstones of economic transactions.
Thanks to traceability, phygital NFTs can also help with countering counterfeit products in the market, leading to original goods being sold. Finally, phygital nonfungible tokens create more collaboration and are a means for artists to monetize their skills. For instance, artists can monetize their work on Felt Zine by collaborating with a brand, such as Givenchy, to create branded content for the brand’s advertising and marketing campaigns.
This may entail producing fresh photographs, artwork or other visual materials that highlight the Givenchy brand or products. The artist may be compensated for their work in the form of a fee, royalties or a cut of sales proceeds from any products that incorporate their work. The artist may also gain visibility and acknowledgement for their work, which can strengthen their personal brand and attract new business opportunities for them to profit from their art.
This new technology has unearthed a few ways of collaboration across creators, developers, brands and their consumers using Web3 design fundamentals.
Being a nascent technology, brands are still just scratching the surface for use cases for phygital experiences. However, phygital NFTs could be a way to token-gate a community, create an incentive mechanism and a brand identity, and as a result, can help with user retention. Brands have used them for many of these purposes so far.
There are multiple ways that brands enable phygital activations. One of the ways that brands create phygital experiences is by asking users to buy the NFT and then nudging them to burn it for access to physical goods or experiences. An example of this is the Nouns Vision project.
Another strategy is providing access to an alternative nonfungible token upon burning. There are also in-store NFT activations where customers collect an NFT once they have purchased a real-world product or service. Brands use these nonfungible tokens to offer targeted community experiences. These experiences provide customers with a sense of belonging, proving to be vital in retention and further acquisition.
Physical NFTs are also being used by gaming companies to provide new gaming experiences and to honor players for their accomplishments. For instance, a gaming corporation might let users buy and sell distinctive phygital NFTs that depict the characters, goods or weapons they use in-game.
These are just a few instances of how various brands are utilizing phygital NFTs to provide their clients with fresh and inventive experiences. Future applications of phygital nonfungible tokens are likely to be even more creative as this technology develops.
With several Web2 brands wanting to create closely knit communities, industry use cases for phygital NFTs are limited only by imagination.
Nonfungible tokens are truly industry agnostic. Most industries could create seamless community experiences using phygital NFTs that could have strong brand recognition and recall effects. However, brands that have embraced this paradigm have been in the luxury, fashion, food and beverages, wearables, entertainment and even fast-moving consumer goods sectors.
Here are some brands that have tapped into phygital NFTs to engage with their communities:
The above-mentioned examples are a small subset of a host of brands that have adopted phygital experiences, clearly validating the movement of companies toward phygital experiences and phygital NFTs.
Phygital NFTs go beyond just the virtual use cases of NFTs and connect real-world products to the virtual world while relying on Web3 design principles.
The world is moving toward an experience economy focused on communities. As more businesses enter markets to serve their customers, one of the key distinguishing factors that could create a meaningful impact from a customer’s point of view is a community experience.
Phygital nonfungible tokens (NFTs), an amalgamation of physical and digital nonfungible tokens, enable community experiences as brick-and-mortar businesses look to engage with their customers through NFTs.
Phygital NFTs allow buying and selling real-world physical goods and experiences through digital collectibles or NFTs. As collectors of phygital NFTs grow and thrive, they start identifying themselves as being part of a tribe, thereby increasing customer retention for the business.
Phygital NFTs do not necessarily rely on native Web3 communities. For instance, NFT communities on Ethereum and Solana often rely on native users of these blockchains that the NFT is created on. However, communities around phygital NFTs can be blockchain agnostic and focus on the brand that they feel an affinity to.
Explaining Web3 social networks — their benefits, challenges and how they work.
Traditional Web2 social media platforms are plagued by fundamental problems such as censorship, lack of users’ privacy and demonetization. Decentralization is a potential solution.
Many of Web2’s major social media are already looking for a way out by making steps forward to Web3 and decentralization. For instance, Reddit touted community points, which are ERC-20 tokens that users can earn by posting quality content and contributing to online communities. To do so, Reddit is working with Arbitrum, a layer 2 protocol designed to scale Ether (ETH) transactions.
Twitter rolled out support for NFTs, allowing users to connect their wallets and display NFTs as profile pictures. Meta is also experimenting with nonfungible tokens on Instagram. Blockchain-based social media platforms continue to provide new functions and methods to interact with technology and one another.
Despite the number of challenges, the future will more likely see continued growth and widespread adoption of Web3 social media platforms as users seek more control over their data and privacy; and seek ways to monetize it on their terms. Enhanced security, pseudonymity, censorship resistance and freedom of speech are important reasons for increasing the use of decentralized social media networks.
Blockchain-based social networks are gaining traction. There are dozens of social media projects in the cryptocurrency space with millions of users. As technology evolves, more decentralized social networks are expected to emerge, each offering different features and widening functionalities.
Here are a few examples of popular decentralized social media networks:
By many parameters, decentralized social networks are an innovative alternative to traditional centralized ones.
Here are some key differences between traditional Web2 social networks and decentralized social networks:
It is important to note that decentralized social networks are still in their early stages of development, with their features and benefits subject to change.
Web3 social media also has several drawbacks compared to traditional centralized ones. These issues can impact the adoption and success of decentralized social networks, but the technology is still evolving and these challenges may be addressed over time.
Decentralized social networks struggle with attracting a large user base, as most people are accustomed to using major social networks such as Facebook, Twitter, or Instagram and may be hesitant to switch.
Furthermore, decentralized social networks are more complex to use and understand compared with traditional ones, acting as a barrier to adoption. Sophisticated user interfaces and a need to dive into the crypto world still scare non-techy users.
Moreover, decentralized social media may suffer from a shortage of attractive features. Lots of them have limited functionality compared with centralized social media, which can impact their usefulness and appeal to potential users.
Also, social media platforms usually require large throughputs to support fast, constant social interactions and effective functioning. For decentralized social networks, scalability is a pain point since their decentralized nature limits the ability to handle large amounts of traffic and data.
Blockchain-based decentralized social networks with native crypto economies may be subject to cryptocurrency market volatility and could be influenced by unpredicted events. The situation on the market can quickly impact the value of rewards earned by content creators and the overall stability of the social network.
Moreover, it may cause a shutdown of the network if it lacks funds. This, in turn, will lead to users losing their social connections. The answer is sustainable economic models for platforms. Using decentralized storage systems like the InterPlanetary File System (IPFS), social networks can protect user information from exploitation and malicious use.
And last but not least, decentralized social networks may face challenges with regulation. To date, there are still no global standards for blockchain. Governments and financial institutions still seek to regulate decentralized networks and the crypto space.
Needless to say, decentralized social media, like any social media platform or service, promotes connectivity, community building and knowledge sharing. Moreover, based on how they work, decentralized social networks offer several benefits compared with traditional centralized social media.
First, Web3 social media platforms increase privacy since they allow users to control and own their data, making it more difficult for major companies or governments to access or misuse their information.
Furthermore, decentralized social networks are less susceptible to data breaches, as user data is stored across a decentralized network of nodes rather than on a central server. Users can create accounts without linking them to real-world identities, like email addresses or phone numbers. These networks often rely on public key cryptography for account security rather than on a single organization to protect user data.
Web3 social media provide censorship resistance and supports freedom of speech. Such platforms are a great place for free speech and expression, as no central authority can control or censor content. Nevertheless, decentralized social media’s ugly side can include political misinformation, cyberbullying and criminal activity because they are largely unmoderated.
Other benefits include ownership over personal data and improved control over user-generated content. Decentralized social media allow users to retain the rights to their content and provide an opportunity to earn rewards for it.
A unique feature of Web3 social networks is governance through decentralized autonomous organizations (DAOs). With it, they can be governed in a decentralized manner, offering users the ability to decide on the direction and development of the network. Smart contracts lay the foundation for the activities of the DAO. They are clear, verifiable and publicly auditable, allowing any potential participant to fully understand how the protocol will work at all times. A DAO treasury is funded by issuing tokens, giving tokenholders the right to vote.
Economic neutrality is an important ethos for many decentralized social networks. Such networks aim to be independent of intrusive advertising and the privacy risk it poses. As a result, apart from venture capital financing, they utilize new forms of monetization to stay solvent, including digital currency to ensure business resilience and reward users.
Web3 social media benefits create a more secure, transparent and user-centric social media experience, with a more democratic and open alternative structure to traditional centralized social networks.
Web3 social networks use blockchains to store and manage the platform, its data and its content.
Here are the essential components and an overview of how a decentralized social network operates:
Blockchain brings trust back to the privacy of social networks thanks to its transparent and cryptographic nature. Also, blockchain-based social networks store data separately between several different independent nodes. Therefore, user data, such as profile pictures, information, posts and interactions, are stored in a decentralized manner across the network.
Decentralized social networks are powered by smart contracts. The contract code serves as the backend for these social media platforms and characterizes their business logic.
A consensus mechanism, such as proof-of-stake (PoS) or proof-of-work (PoW), is used to validate transactions and enable trust and security in the network.
A token economy component that powers decentralized social network monetization includes cryptocurrency. It is often used to incentivize social network participants and reward them with tokens for content creators.
Many Web3 social networks are available as decentralized applications (DApps) or support DApps on top of them that offer additional services and functionality, such as payments, NFTs and more.
Decentralized social media users, like users of the majority of Web3 services, are identified and authenticated through a secure public key infrastructure.
Decentralized social media platform users can create and share any content on the network without moderation. No centralized third party can censor their expressions and remove or modify their content.
The above features work together to create a more secure, transparent and user-centric social network experience.
Decentralized social networks are networks where user data and content are stored on a blockchain and independent servers rather than centralized servers controlled by a single company.
While Web2 social media platforms have benefits and challenges, Web3 technology can drastically improve space. The key flagship of that change is decentralized social media networks — an emerging type of social network which operates in a decentralized manner. This allows for more privacy and security and gives users control over their data, digital identity and content, fostering transparency, as anyone can view the data at any time.
Blockchain-based social platforms aim to promote free speech and provide censorship resistance, with no central authority controlling or manipulating the content. Additionally, no third party can own, collect, or sell user data.
Also, Web3 social networks often utilize fungible and nonfungible tokens (NFTs) as new ways to monetize content. Thus, decentralized social networks are not just a change in the infrastructure of centralized Web2 platforms; they are also changing the method of how social media companies make money.
A social network is a platform or service that enables users to set up either fully or partially public profiles, share content and connect with other users based on common interests, life experiences, or personal connections.
Since its emergence in the mid-1990s, social media has become an important and undoubtedly integral part of people’s everyday lives, covering half of the world’s population. The rise of social media is not surprising since social networks as a phenomenon have many benefits and catching features.
First and foremost, social media can connect friends, families and communities, no matter the distance, providing an opportunity for real-time correspondence. Second, they make it easier to exchange information and ideas, facilitating communication and other forms of expression. Social networks offer entertainment through online content and enable the creation of communities around shared interests.
Lastly, social media may be a tool to boost businesses, allowing them to reach a wider audience and build a stronger online presence. In the 21st century, social networking is a significant opportunity for marketers seeking to attract, engage and acquire customers.
The current state of social networks in Web2, the web we know today, is complex and controversial. On the one hand, they play a significant role in shaping public opinion, driving political discourse and connecting people worldwide; on the other hand, social media faces increasing challenges, such as privacy concerns. For instance, it is widely known that centralized social networks earn money by selling consumer data. The public is becoming increasingly aware of the risks associated with personal and sensitive information sharing on social networks and requires greater confidentiality and control over their data.
Social media space monopolization is another hot issue. A few dominant companies, such as Facebook, Twitter and YouTube, control a large portion of the social media market and users’ data. As a result, they face growing criticism of their power and influence.
Censorship, the suppression of speech, public communication, or other information, is also challenging. Governments in countries like China and North Korea, along with major Web2 social networks, can censor content or ban any account on the platforms.
Also, social media platforms are a constant subject of increased regulation. Governments worldwide enhance their regulatory supervision of social media in response to concerns about data confidentiality, election interference, spreading fake news and harmful, misleading content.
On top of that, social media’s advertising-driven and data-collection business model is under scrutiny as concerns about data privacy and the spread of misinformation continue to grow.
Non-fungible token (NFT) sales rose slightly last week, increasing 1.23% to $232.49 million in recorded sales. The top two NFT collections, Otherdeed and Doodles, saw growth of 44% to 58% compared to the previous week. Ethereum continues to dominate the NFT industry, accounting for more than 81% of total sales last week with $188.51 million […]
The online marketplace giant, Ebay, is seeking to fill several positions in the area of Web3 and non-fungible token (NFT) technology, according to several Linkedin job postings. Ebay is looking for a “creative crypto attorney” for the marketplace, Knownorigin, which it acquired in June 2022. Big Corporations Still Seek Workers to Manage Crypto and Blockchain […]
Fumio Kishida said there were “various possibilities for using Web3” in Japan and has previously supported blockchain-based initiatives for authorities using digital solutions.
Fumio Kishida, the Prime Minister of Japan, has come out in support of blockchain as a potential solution for technological issues facing the country.
In response to questioning from Liberal Democratic Party member Masaaki Taira before the Budget Committee of Japan’s House of Representatives on Feb. 1, Kishida said there were “various possibilities for using Web3” in Japan. He added that the Japanese government could use aspects including nonfungible tokens (NFTs) and decentralized autonomous organizations (DAOs) in efforts to revitalize regions and promote ‘Cool Japan’ — a national strategy aimed at showing off the country’s innovations and culture to the rest of the world.
“If you consider DAOs, people who are interested in the same social issues can form a new community,” said Kishida. “NFTs can also be used to diversify the income of creators and maintain highly loyal fans.”
Taira chairs the government’s task force on Web3 policy. He pointed to coordination with tax authorities in Japan as well as research into releasing a digital yen — the country’s central bank announced in November it planned to start a pilot program for a digital currency starting in spring 2023.
“I think that these types of blockchain technology and technology using Web3 are effective in solving the various problems we have,” said Taira.
Since taking office in October 2021, Kishida has occasionally spoken on the Japanese government’s intentions of investing in Web3 services as part of the country’s digital transformation. In September, his cabinet allowed the issuance of NFTs as a reward for regional authorities using digital technology to solve problems.
Related: Japanese prime minister says gov't investment in digital transformation will include Metaverse, NFTs
The deputy director-general of Financial Services Agency’s Strategy Development and Management Bureau of Japan has called for more stringent rules on crypto akin to those of banks. Amid the crypto market downtown, exchanges including Coinbase and Kraken have shuttered operations in Japan, while the local subsidiary of bankrupt firm FTX has until March 9 to suspend business.
DeFi protocols have seen significant growth in total value locked in January 2023, with Lido Finance leading the charge.
Decentralized finance (DeFi) protocols experienced a boom in total value locked across different staking pools in January 2023. The market hit $74.6 billion worth of staked assets, increasing by 26% from December.
In its latest monthly report, DappRadar outlined the growth of the DeFi sector alongside rejuvenated nonfungible token (NFT) markets that have also had upticks in trading volume and sales.
Optimism emerges as the top DeFi performer, seeing a 57.44$ increase in total value locked (TVL) at $808 million. Blockchain Analyst Sara Gherghelas told Cointelegraph that Optimism’s transaction volumes were likely driven by a "learn-to-earn" incentives program that ended midway through January.
A sudden drop in daily transactions on Jan. 17 suggests that educational incentive programs might play a role in driving DeFi adoption and onboarding as Gherghelas explained:
“By providing a hands-on learning experience, these incentives can help users gain a deeper understanding of DeFi technologies and the potential benefits they offer, thereby driving greater adoption and usage of DeFi products and services.”
Solana saw a 57% increase in its TVL to reach $548 million, driven by Marinade Finance’s introduction of a token incentive scheme rewarding SOL depositors with liquid staking derivative mSOL. The protocol reached $152 million TVL between December 2022 and January 2023.
It’s not all positive for the Solana ecosystem, with platform Everlend announcing its closure on Feb. 1, citing a lack of liquidity for shutting down its service.
Related: NFT sales topped 101 million in 2022: DappRadar report
Ethereum’s upcoming Shanghai upgrade is also driving staking in DeFi due to the expected opening of withdrawals from Ethereum staking contracts. Lido Finance flipped Maker DAO as the largest DeFi protocol in January, driven by popularity of liquid staking derivative protocols.
According to Gherghelas, Lido’s liquid staking solutions have proven to be a major drawcard for users looking to maximize staking returns.
“What sets Lido apart from other DeFi protocols is its innovative staking solution, which allows users to access liquid Ether staking without committing to the traditional 32 ETH minimum.”
Lido saw over $8 billion worth of value staked in its platform, an increase of over 36% since December 2022. Gherghelas highlighted the recent rally in cryptocurrency markets contributing to the increase in DeFi’s TVL:
“The crypto market has been bullish, leading to an increase in investor confidence and an inflow of capital into the DeFi space.”
NFTs have also enjoyed a resurgent start to the year. Trading volume reached $946 million, marking a 38% increase month on month and the highest trading volume seen since June 2022.
Ethereum still dominates the NFT market, accounting for 78.5% of total trading volume at a value of $659 million in January. Yuga Labs enjoyed a good month, with $324 million in trading volume from its exclusive collections.
NFT collections DeGods and Monkey Kingdom helped drive a 23% increase in Solana’s NFT trading volume. Meanwhile, Polygon saw a significant 124% jump in its NFT trading volume and a total of 4.5 million NFT sales, driven in part by the Collect Donald Trump Cards.
As Cointelegraph explored at the end of 2022, unique active wallet data (UAW) comparing 2022 to 2021 showed a 50% increase, with DeFi, NFTs and blockchain gaming-driven activity and trading volumes.
PRESS RELEASE. FIO Protocol, the leading decentralized solution for global blockchain usability, has announced the launch of FIO Domain wrapping on the Polygon blockchain. Wrapping is the process of taking a token from one blockchain and making it available for use on another. This launch moves FIO Protocol into the $31.4 billion NFT market by […]
Amid the controversy surrounding the Ordinals project and the debate over what types of data should be stored on the Bitcoin blockchain, the network mined its largest block, nearly 4 MB in size, containing just 63 transactions. One of the transactions was a 3.94 MB Ordinal inscription featuring an image of a wizard, and the […]