The state of NFT markets during these turbulent times

Does the downfall of crypto affect the overall Web3 space?

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GM! This is Focus Market. The only NFT photography newsletter that keeps digital artists calm during these turbulent times. 

Here's what we got for you this week:

  • Does the downfall of crypto markets affect the overall Web3 space?

  • The state of NFT markets

  • Quick intro to Web3 photography

  • Photography feature of the week

Does the downfall of crypto markets affect the overall Web3 space?

If you've been following the events in crypto during the past few weeks then you're probably aware of all the madness that's been taking place.

For those who might have missed it, here's a quick summary:

As a result of being unable to keep up with the increasing demand for customer withdrawals, FTX, one of the biggest cryptocurrency exchanges, has filed for bankruptcy.

The markets reacted immediately, and everyone rushed to sell their FTT holdings or withdraw their personal funds from FTX accounts.

The value of the company imploded overnight, and soon after, all the withdrawals got suspended. It's been estimated that FTX suffered a whopping $8 billion in losses.

This story is quite similar to the collapse of the Terra blockchain and its native token, Luna, earlier this year.

Since the beginning of the past summer, cryptocurrencies have been experiencing a constant decline which naturally prompts a question of what's bound to happen next.

Here's our take on the situation:

First of all, we have already experienced several of these downturn markets in the past. People that were heavily active in the general Web3 space before the market crashed are still there, which makes the situation quite different today.

Of course, the examples of FTX and Terra clearly indicate severe problems in the crypto segment that need to be dealt with. However, if we look at other Web3 applications such as NFTs, the picture is very different. 

There is a large number of brands trying to utilize the vast opportunities of Web3 and use that to build a stronger connection with their audiences.

Examples worth mentioning:

 Nike's recent rollout of a Web3 platform .SWOOSH. It will allow users to co-create things, buy, display, and trade physical and virtual goods, gain access to events and goods, and more. 

A similar strategy is being taken by its main rival Adidas. The German sportswear brand is releasing a Virtual Gear NFT collection aimed to accelerate a collective drive towards strengthening web3, and the Adidas community-based, member-first, open metaverse pledge.

It's very likely that we will see more interesting use cases in the coming months and years and they will certainly expand beyond typical monetary incentives that were available for holders during the NFT craze back in 2021.

As we look forward to the future, we are interested to see how Web3 is going to influence Web2-native photography brands and create a space for opportunities.

The State of NFT Markets

Here are the main takeaways:

  • NFT prices have fallen more than those of both native tokens as well as many DeFi projects. The key driver is the concentration of value in a small number of collections, exacerbated by the native token (that NFTs are denominated against) losing value. 

  • The transition to new NFT use cases could come sooner rather than later. Losses incurred by investors on collectibles have been larger and more consistent. Attention may be shifting towards segments like utilities that benefit from new features on emerging marketplaces.

  • Ethereum has lost notable market share to Solana and other blockchains in the last few months; increasing Solana’s share to highs of~43% in September. One reason is the scalability and low fees of other blockchains. Another is that Ethereum’s role in the NFT space may be gravitating towards more of a store-of-value.

  • Competition between marketplaces is heating up. X2Y2 on Ethereum and Hadeswap on Solana are taking notable market share from leaders OpenSea and Magic Eden respectively. Emerging marketplaces battle on the basis of new pricing models, optional royalties, and lower fees.

The market slowdown clearly reflects the decreasing demand for NFTs. Particularly, digital collectibles. However, this situation may open the gates for new and more utility-based NFT use cases going forward.

If you want to read the full report, click here.

Quick Intro to Web3 Photography

Our community manager, Paul Hamilton, has put together a quick easy-to-read guide explaining the core concept behind Web3 technology and how it can benefit the photography space.

Photography Feature of the Week

Barbican
By Andrew Eberlin in A Photo and a Few Words A Day

The Barbican fascinates me. Built on a site razed by the Blitz as a city within a city. An example of the optimism and ambition of post-war architecture—an icon of brutalism.

At its opening in 1982, the Queen described it as “one of the wonders of the modern world.”

The sights and sounds of the Barbican show how concrete living could work.

Dominated by the splendour of the towers, the neighbourhood has adopted the church of St Giles (the one surviving building from the Blitz) and hosts a calming lake in the centre (which provides a roof to the Central Line).

The Barbican is a car-free, pedestrian-friendly neighbourhood.

The lack of traffic means you can listen to students practicing at the Guildhall School of Music & Drama, hear excited squeals at playtime from the London School for Girls and the bounce of a ball in one of the sports grounds.

I like a day like this. A day dedicated to photography in a place that inspires me. It gives me time to linger, absorb the place, and notice the details.

Even in the rain.

Thanks for reading!  

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See you next week!