Everyone has an opinion about non-fungible tokens (NFTs). Many deem them just another fad that will soon fizzle out. While others see them as the future of crypto. No matter your position on the issue, digital collectibles like these will continue to have an impact on the crypto market in 2022.

NFTs first rose to prominence in early 2021, when digital artist Beeple sold an NFT of his artwork Everydays: The First 5000 Days for a record-shattering $69 million at Christie’s auction house. That milestone opened the floodgates and led to countless headlines, involving more non-fungible assets such as crypto art, NFT avatars, real estate and GameFi. NFTs were such a hot topic in 2021 – be it on mainstream newspapers or major social media platforms – that the Collins English Dictionary ended up selecting the acronym as its word of the year.

Besides their impact on the general population, NFTs have also opened up a whole new world for blockchain technology, with new developments in smart contracts, the Ethereum blockchain and many others.

As developers come up with more applications for the technology, the popularity of NFTs shows no signs of slowing. To give you an idea of where the market may trend, we’ve taken a snapshot of the latest and hottest trends that we’re likely to see more of in 2022.

1. Going Art, Going Up

Beeple’s record-breaking NFT coup was far from the only high-profile NFT art sale reported in 2021. To quickly recap, a GIF of the Pop-Tarts®-bodied feline meme sensation Nyan Cat sold for 300 ETH (worth an estimated $590,000 at the time). A month later, in March 2021, a digital card displaying an image of a morph between Homer Simpson and Pepe the Frog called Homer Pepe sold for 205 ETH (equivalent to $320,000 at that time).

NFT art (or crypto art) has become so popular that Sotheby’s Auction House launched a dedicated NFT marketplace called Sotheby’s Metaverse, which reportedly achieved almost $100 million in sales before the end of 2021.

The hype didn’t just stop with crypto art, as NFT avatars — algorithmically generated digital images of cartoon characters — quickly became the next big thing, with numerous avatars selling for millions of dollars. Perhaps the most famous examples of avatars from 2021 are the collections from Bored Ape Yacht Club and CryptoPunks, which count major celebrities such as Snoop Dogg and Jimmy Fallon among their fans.

The staggering rise of NFTs in the art scene has naturally raised questions about what makes art valuable, the nature of ownership, and perhaps most importantly, what else we might expect in 2022 and beyond.

The trend going into 2022 appears to be buying and selling fractionalized NFTs of real-world artwork by famous artists. Fractionalized NFTs are opening up investment opportunities for high-value crypto assets, but at a fraction of the cost.

One event to watch for is the auction of NFTs representing a mural by iconic street artist Banksy called Gorilla in a Pink Mask, which was removed from a wall in Bristol, England, in September 2020. Exposed Walls, the company that extracted the mural, is set to sell the graffitied wall this year as a collection of 10,000 fractionalized NFTs, each of which will sell for around $750.

Following Exposed Wall’s example, another company, Particle, is planning to launch the sale of NFT collections representing fine art masterpieces from around the world. Like Exposed Wall, Particle divides each individual art piece into a grid of 10,000 NFTs. The platform acquired the physical version of Banksy’s 2005 work, Love is in the Air, from Sotheby’s in May 2021 for almost $12.9 million. The artwork will be the first to be fractionalized by Particle into 10,000 NFT parts, each one selling for just over $1,400, for a total value of $14 million.

Fractionalizing assets may sound like a strange model for ownership, but it’s actually started to gain traction in 2021. Picasso’s Fillette au béret (valued at $3.68 million) was fractionalized into a collection of 4,000 NFTs in July 2021 (or $920 per fractionalized share). In addition, platforms like Masterworks are offering investors the opportunity to buy and sell fractionalized shares of individual multimillion-dollar works by blue-chip artists, including Banksy, Jean-Michel Basquiat, Keith Haring, Andy Warhol, Kaws (aka Brian Donnelly), and more.

Amidst the NFT boom, crypto art isn’t without its flaws. However, art investors seem to be embracing the technology and exploring its possibilities for profit as the next evolution of fine art collecting.

This new model is also a boon for creative industries, enabling artists to monetize their work while providing a larger pool of people with the opportunity to invest. Digital art creators will also be able to receive royalties from secondary sales

Besides revolutionizing the art world as we know it, NFT art has the potential to democratize and increase transparency in the annual $50 billion art market.

2. NFTs Spice up Gaming

Gaming was probably the second biggest area of development for NFTs in 2021. GameFi (a portmanteau of gaming and finance, otherwise known as NFT gaming) paved the way for this development with blockchain-based play-to-earn games that reward players with in-game NFT assets.

Games and tokens like Gods Unchained (GODS), Axie Infinity (AXS), Genopets (GENE), Illuvium (ILV) and My Neighbor Alice (ALICE) made waves in 2021 with play-to-earn (P2E) models that make gamers real money. Players are free to collect, trade or sell their NFTs as they please because they have complete ownership of them. Unlike traditional in-game assets, which are locked on the platform where you’ve acquired them, NFT assets can be transferred to NFT marketplaces — where they can be sold for cash or traded for other assets.

Axie Infinity (AXS) is the most popular game of the bunch, with reportedly over $1 billion worth of in-game assets traded on its platform. The game is inspired by Pokémon and features collectible pets called “Axies,” which are NFTs with a unique combination of abilities. The game also has its own in-game tokens, Axie Infinity Shard (AXS) and Smooth Love Potion (SLP), which function as currency in the Axie Infinity ecosystem.

Play-to-earn games aren’t the only projects in the GameFi space. There are also text-based games which use NFTs. For example, Loot is a community-created game template which features 8,000 distributed “loot bags” containing randomly generated lists of items, including weapons and other equipment of varying rarity, to be used in a game that will be designed by its online community. The items are collectible NFTs which are completely free (apart from associated gas fees). Loot is still under development, and there are currently no more details on the properties of the items that are minted in loot bags.

Games leveraging NFTs are just getting warmed up. There are numerous blockchain-based games slated for release in late 2021 and 2022, including Thunder Lands, Idle Cyber, Sipher and MetaWars.

3. NFTs Take on Hollywood

One of the bigger changes caused by the Covid-19 pandemic is the model for how studios release and monetize new movies — as even blockbuster films now go straight to streaming. The television industry has similarly experienced change, as it adjusts to the popularity of nonlinear streaming viewing habits.

Streaming has completely revolutionized content delivery. But is having a middleman who controls what you can and can’t watch really the future of entertainment? Some crypto experts think NFTs are the next frontier — which could change how content is consumed.

NFTs enable a whole new way to monetize, merchandise and crowdfund film/TV projects. Some big industry names have already started to release NFT TV shows, including:

• GenZeroes: GenZeroes is a live-action NFT TV series produced by the House of Kibaa that’s set to be released in March 2022. The show’s NFT release and episodes can only be viewed by purchasing NFTs. Depending on the level of NFT purchased, viewers receive access to a range of benefits such as graphic comic books, exclusive collectibles, and even fractional ownership of the show itself.
• Stoner Cats: The adult animated web series Stoner Cats (featuring cats who get high) managed to raise $8.4 million in an NFT sale that granted holders the exclusive right to watch episodes of the show. The NFTs — which function as a lifetime ticket to stream the show — reportedly sold out in just over 30 minutes. Unsurprising, given that the cast of the show, which is being produced by Mila Kunis, is stacked with big names including Chris Rock, Ashton Kutcher, Jane Fonda, and even Ethereum creator Vitalik Buterin.
• Dominion X: Another NFT TV show that’s currently in production is Dominion X, a stop-motion series conceived by Steve Aoki and the creators of Robot Chicken. The project acquired funding for a pilot episode after almost instantly selling out 500 Dominion X NFTs. However, unlike the Stoner Cats NFTs, the Dominion X NFTs are splices of the episode, not tickets to stream the show. The rights to Dominion X will still be sold to distributors like Netflix or Fox, and there are no guarantees the pilot episode will be a success.
• NFTme: NFTme is a documentary TV series scheduled for release in Q1 2022 that highlights the emerging NFT industry by showcasing NFT brands, creators, pioneers and entrepreneurs. The goal of the series is to educate the public on the innovation, collaboration and creativity coming out of the NFT space. The project includes the sale of 52 exclusive utility NFTs that grant holders VIP access to NFTme live events.

NFT TV shows are just one piece of a much larger puzzle. There are also TV shows that aren’t NFTs, but are based on NFT characters, such as the Robotos TV series being developed by Time Studios, the film and TV production studio of Time Magazine.

Several TV shows and film projects are using NFTs to acquire funding, such as Men of the House, whose pilot episode was completely financed by NFT sales. Actress Jennifer Esposito (NCIS, The Boys, Crash) leveraged NFTs to finance her upcoming directorial debut, Fresh Kills. The crime movie, whose screenplay was written by Esposito, was financed through a $3.5 million IPO of securities on the Upstream exchange.

Clerks director Kevin Smith announced in April 2021 that he would be taking part in the NFT experiment by auctioning off his upcoming horror movie, Kilroy Was Here, as an NFT. According to a statement from Smith, the studio that purchases the movie NFT can monetize it traditionally — or even choose never to screen it.

NFTs have also found their way into TVs, quite literally, as Samsung recently announced an “NFT Aggregation Platform” in its newest models of smart TVs (Neo QLED, MICRO LED, and The Frame TV models) scheduled for release in 2022. Viewers can use the feature to browse NFTs for sale on several marketplaces, and even buy them directly using their TV.

It’s a pretty big endorsement for the NFT space, and perhaps the clearest sign that NFTs and the entertainment sector are only going to become more entwined in the future.

4. Sing Along with Music NFTs

The music industry has also caught the NFT bug. It’s no secret that it’s difficult for musicians to earn under the current system, with artists getting paid fractions of pennies per stream. Independent musicians are turning to NFTs as a new financial model that offers more creative freedom. The trend in 2022 appears to be more NFT albums and songs.

Musician Daniel Allan, who was recently featured in Time Magazine, is one example of an artist who has reportedly sold digital copies of his songs as NFTs for thousands of dollars each. Allan, who makes electro-pop music, uses platforms like Glass to showcase his work. Glass is a video streaming platform where every video is an NFT that’s owned by the creators, who get to decide how the content is monetized without any middlemen.

Other ventures in the music industry include Band Royalty NFTs, which enable music lovers to earn a share of income collected every time a song in the platform’s catalog is performed. Band Royalty reportedly has 3,000 NFTs on its platform, with the long-term goal of having a total of 12,000 NFTs over the next 18 months.

A famous example of an artist successfully selling an NFT album is DJ 3LAU, who released a crypto album that made $11.6 million in less than 24 hours. The EDM producer sold 33 unique NFTs of his album, Ultraviolet, in an auction he announced on Twitter. His next project is an NFT-based music platform called Royal, which lets fans purchase NFTs to share in royalties earned by their favorite musicians.

Other prominent artists who have shown interest in NFTs include rapper Meek Mill, who announced last year that he’s going to release an NFT mixtape in 2022. Kings of Leon also released an NFT album (When You See Yourself). The band dropped three different types of tokens: One was a special album package, the second offered perks like front-row concert seats for life, and the third contained exclusive audiovisual art.

As you can see from the examples above, this new formula has been tried and tested for success. It won’t be surprising if more big artists start releasing NFT versions of their albums as record labels jump on the NFT hype train.

5. Taking Out Loans Using NFTs

It might sound like the only good potential use cases for NFTs are in digital art, media and gaming, but they go far beyond play-to-earn games and prohibitively expensive cartoon profile pictures. One up-and-coming use case is NFT loans. Investors are putting their NFTs and NFT collections to work by using them as collateral to obtain loans for emergencies and new potential investments.

Several DeFi (decentralized finance) platforms were launched in 2021 to facilitate loans using NFTs as collateral. For example, Arcade is a DeFi platform that offers NFT-backed loans. The borrower and lender must first agree to the terms before the collection is locked in an escrow account facilitated by a smart contract deployed by Arcade. The NFT(s) remains locked up and irretrievable until the loan is paid in full or defaulted.

As of January 2022, Arcade reportedly supported 50+ NFT collections that have “some amount of value against them,” including NFT avatars from Bored Ape Yacht Club and CryptoPunks. The platform recently secured $15 million in Series A funding from notable crypto investors including Pantera Capital and Franklin Templeton.

Another popular DeFi platform for NFT-backed loans is NFTfi, a marketplace where users can put up NFT assets as collateral for loans or offer loans to other users. Any ERC-721 token can be used as collateral in exchange for a loan in ETH. Once the loan is repaid, the NFT is transferred back to the borrower. If the loan defaults, then the asset is transferred to the lender.

6. Coming to a Big Brand Near You

Brands in all industries have been coming up with creative ways to grab a slice of the NFT pie. Food brands likeCampbell’s, McDonald’s and Taco Bell, and fashion brands including Gucci, Nike and Louis Vuitton are leading the charge by releasing limited-edition NFT collectibles as a way to build brand loyalty, boost social media engagement, generate new revenue streams and raise money for charity.

For example, Pringles® has created CryptoCrisp, a limited-edition digital collection of crypto-themed crisps with a “virtual flavor.” Limited to just 50 versions, the NFT is an MP4 file that shows an animated spinning golden Pringles can with the “CryptoCrisp” flavor.

The price for the CryptoCrisp NFTs started at 0.0013 ETH, or approximately $2, which is the price of a regular Pringles can. The NFTs are now available for prices starting at 4 ETH on OpenSea and Rarible.

A more humorous example ― given the recent pandemic-induced toilet paper shortage ― is Procter & Gamble’s (P&G) NFT collection featuring rolls of Charmin® toilet paper. Each NFT comes with a physical display that people can use to show off the NFT toilet paper “in their bathroom alongside real rolls.” P&G donated all proceeds from the NFT auction to Direct Relief, a humanitarian charity that supplies medical resources to healthcare professionals.

Using NFTs to generate brand value has become the newest strategy in the marketing playbook of numerous big brands, a trend that’s losing no steam heading into 2022. Expect more brand-specific NFTs to be released by companies in every industry, as marketers start to explore creative branding opportunities in the metaverse.

The Bottom Line on NFT Trends

NFT ownership is mostly certainly on the rise and is quickly revolutionising the way we deal with digital art and the blockchain. The future of NFTs is brimming with possibilities as the technology continues to evolve from basic and experimental use cases to more meaningful ones. Even as you read this article’s conclusion, new NFT projects with novel applications are popping up. Just think: NFT ticketing, NFT streaming…the possibilities seem endless.

The one consistent NFT trend over the past year is their steady growth and ever-increasing popularity. To become a part of this brave new world, check out our guides on creating NFTs — and then get started on the Bybit NFT Marketplace.