Some of the challenges facing NFTs as they grow in popularity

Non-Fungible Tokens (NFTs) seem to gain more and more attention as ever-larger amounts  of money are spent on these digital assets and multinational corporations seem to be  encouraging their adoption. Adobe has recently launched an NFT option on its Photoshop  platform whereby helping users to address the challenge of being able to certify ownership.  There is a growing issue on NFT marketplaces fuelled by the need to have the assurance  that the entity wishing to sell an NFT is the actual owner. The onboarding of an NFT is not  dissimilar to a regulated entity, such as a bank or asset manager, having to carry out Know  Your Client (KYC) checks. Recently, a renowned photographer wishing to create and sell  NFTs from his personal collection claimed that it took over three weeks before he was able  to begin selling on one of the leading NFT platforms. In spite of these onboarding  challenges, trading volumes have reached new heights with turnover rising by 700% in Q3 this year compared to the previous quarter.  

What are NFTs? 

“I see NFTs as a way to innovate, empower others and push the boundaries of how creators  interact with their fans” – Paris Hilton 

NFTs are digital assets recorded on a blockchain and can include a wide range of items, e.g.  songs, photos, videos, art and even virtual assets from on-line games, such as Axie Infinity  (which has sold over $2billion of NFTs). For instance, an image can be made into an  exclusive ‘1-of-1’ NFT. This means there is only one copy of that asset available, which only  one person can truly own. All the information and related data about that asset is stored on  a blockchain whereby the authenticity, provenance and ownership history of the asset is  accessible to anyone. 

NFTs offer a huge opportunity for corporations and individuals which own creative content  because they are able to create NFTs from their collections and profit from this booming  digital economy on a global basis. Potentially, and even more interestingly, is that not only  can content owners earn money on the initial sale of an NFT but they can also generate  royalties which are sent automatically to their digital wallets every time the NFT is resold in  the future. 

Here is just a selection of some of the more active NFT sites: 


As the below screenshot from Opensea’s website reveals, an NFT’s performance can be a  real roller coaster – with some of the NFTs for sale on OpenSea increasing by 1419% and  others seen to be falling by 82% in just 7 days. OpenSea is the most popular NFT platform,  and in September 2021 it recorded a 10-fold increase in volume (compared to the previous  month) with sales of $3.4 billion in just September alone.

Weekly Blockchain and Digital Assets Analysis by TeamBlockchain Ltd. 

Performance of top NFT collections over the last 7 days 

Source: Opensea 


Rarible is another popular NFT platform and offers users the ability to participate in  decisions about the platform’s future once they hold the ERC-20 RARI token. Hence it has  been designed to reward active users with a voice on the platform’s future. Of note, is the  turnover of some of the NFTs that Rarible lists, i.e. millions of $’s in just the last 30 days,  thus demonstrating the capital that NFTs are attracting. 

Top Collections in the last 30 days 

Source: Rarible 


SuperRare hand picks artists and promotes their creations so is well regarded in the art  community and is making artist more widely available globally, thus providing competition  to swanky art galleries in major cities around the world. 

Weekly Blockchain and Digital Assets Analysis by TeamBlockchain Ltd. 

Portrait of Donald Trump a.k.a Satoshi Nakamoto #9 

Source: SuperRare 


Foundation calls itself the new creative economy, here to bring “digital creators, crypto  natives, and collectors together to move culture forward”. If you click here you will see that  a number of the NFTs that Foundation is selling are moving artworks as opposed to static  images. 

Current featured art 

Source: Foundation 


Melon offers a very specific style of NFTs based on a 120+ social media influencers which  Melon has selected, and which have active and large social media followers. As the below  shows, some of these creators have millions of people following them on a range of social  

media sites such as TikTok, Instagram, YouTube and Twitch. Melon has created viral NFTs to  tap into those social media influencers which have over 300 million followers between  them. Melon has turned its back on the traditional art world and instead is focused on the  mass market social media influencers. 

According to a report in the publication Sprout Social: 

• 55% of consumers learn about new brands on social media 

• 91% of executives anticipate their company’s social media marketing budget will  increase over the next three years – and the majority expect it will increase by more  than 50%. 

• 85% of executives report that, moving forward, social data will be a primary source  of business intelligence for their company. 

• 78% of consumers are more willing to buy from a brand and 77% will choose a brand  over a competitor after a positive experience with that brand on social media. 

The importance of social media influencers is certainly compelling. No doubt we will start to  see brands using these influencers promoting NFTs with these brands as part of a  company’s marketing and advertising spend. The Creator Economy (referring to the  independent businesses and ‘side hustles’ launched by self-employed individuals who make  money from their knowledge, skills or following) is worth $104billion – and NFTs are set to  expand this market even more. However, we do need to conclude with a note of caution:  there is no real clarity, let alone agreement, from regulators as to whether NFTs are to be  treated as regulated assets. Furthermore, another factor that could complicate matters is  the recent FATF guidance around digital assets proposing: “… creators, owners and  operators or some other persons who maintain control or sufficient influence in the DeFi  arrangements, even if those arrangements seem decentralized, may fall under the FATF  definition of a [virtual asset service provider]…… even if this is exercised through a smart  contract or in some cases voting protocols…” 

Selection of Melon’s 120+ creators