NFT: Unlocking Crypto for the Masses

The internet changed the way we transfer and share value, and now blockchain technology is changing how we transfer value and assets. These assets can be land deeds, audio recordings, design files, event tickets, photographs, in-game assets, collectibles and so much more. The lack of programmability had curbed the potential of these digital and real-world products. Nevertheless, blockchain technology is now unlocking supercharged utilities for these goods and we are excited to be a part of this growth journey.

Non-fungible tokens (NFTs) will allow users to truly own digital assets and it will have far-reaching impacts on how people interact with technology.  

Let’s deep dive into all things NFT!

What are NFTs?

Non-fungible Tokens (NFTs hereafter) are digital assets with blockchain-managed ownership.

Individual NFTs have four important aspects: rarity, uniqueness, interoperability and, digital ownership.

The ability to have verified ownership, easy movement across applications that support NFTs, and creator mandated scarcity makes them perfect for tokenizing both real-world and digital assets. 

The potential use cases for NFTs can be tremendously vast, and we probably can’t even conceive all of them today, in these early days for this fascinating technology. Here are some of the use cases that we find particularly interesting.

Use cases

  • Marketing
  • Supply chain management
  • Luxury item certification
  • DeFi staking
  • Insurance policies
  • Asset backed lending
  • Virtual real estate
  • Personalized avatars
  • Themed collectibles

  • Badge of attendance
  • Collectible sets
  • Sponsor marketing
  • Intellectual property
  • Voting
  • Land deeds
  • Trading cards
  • Digital sport assets
  • In-game assets

Before we discuss these exciting developments, let’s take a trip down memory lane.


‘Colored Coins’ on the Bitcoin network was among the first experiments in the NFT space. Further down the line, CryptoPunks lowered the barrier to entry by introducing an on-chain marketplace. However, there is one project that ignited the growth of the sector.

NFT’s growth spark: CryptoKitties

CryptoKitty is an NFT collectibles game. The “Kitties” are adorable, shareable, fun and they brought mainstream attention to NFTs like never before. 

Although they exist on the Ethereum blockchain, CryptoKitties are very different from Ether. Every CryptoKitty has its own “cattributes”, is breedable, and is completely unique.

What makes these two blockchain tokens different is their “DNA”. While Ether is an ERC-20 fungible token, CryptoKitty is an ERC-721 Non-fungible token. This means that every Ether token is exchangeable and carries the same value and characteristics as every other Ether token, whereas, every CryptoKitty by its code definition is unique and carries different value from other digital cats.

That’s great, but how are CryptoKitties doing now?

At its peak in Dec-2017, CryptoKitties had 17,500 daily users spending US$ 1000s on these digital cats. Daily average pending transactions on Ethereum ballooned from 1,500 to 11,000. The CryptoKitty bubble burst soon after, however, fans kept the community alive and over the past month, the current average price for a kitty has been US$ 14.62 .

This project is iconic for the NFT space. It brought these tokens to the mainstream and one can actually consider BC (Birth of CryptoKitties) as the dawn of the NFT era.

Following the CryptoKitty mania, the NFT industry went back to the drawing board and strong projects like OpenSea emerged. Since 2018, the quality of projects has consistently improved and teams are leveraging different features of NFTs to solve real-world problems. 

Why are NFTs exciting?

NFTs provide:

  • Standardization: By representing NFTs on blockchains, developers can build common, reusable, inheritable code. These include basic functions such as ownership, transfer, and simple access control. 

which leads to Interoperability: This is enabled by open standards that provde a clear, consistent, and, permissioned API for reading and writing data.

which leads to Tradeability: The most compelling feature enabled by interoperability is free trade on open marketplaces.

which leads to Liquidity: more people trading NFTs provide liquidity to the market.

  • Verified ownership: 
    • Blockchain provides immutable ownership records
  • Control over secondary transactions:
    • Royalties on the resale of art, music, books, etc
    • Event hosts can ban secondary ticket sale for exclusive events
  • Fraud protection:
    • Fake items eliminated as the origin is instantly verifiable
    • An important feature for tickets, gaming items, and art

NFTs have a market size of US$ 392 million, some use cases already have high traction because of tremendous value addition to these assets classes:

Categories like art, collectibles, metaverses, and gaming are driving the entire ecosystem towards sustainable growth. Furthermore, it would be remiss to skip over utilities NFTs provide to enterprises that are looking to interact with their users in an innovative way.

Enterprise solution

Brands that wish to interact with their customers in digital reality, face monumental challenges:

  • Digital duplicates of branded products flood the market
  • Digital assets have low programmability 
  • Servers fail with high traffic 

Enterprises are looking to deploy engagement activities like collectibles hunt, fan badges, etc, in digital spaces that have a robust infrastructure, are fraud-proof, can handle traffic, and have a strong user base. NFTs are a perfect fit for these enterprises to launch their digital assets.

Many popular non-crypto brands are exploring the growing NFTs market.

With exciting use-cases and talented teams working in the NFT space, the market numbers will act as a litmus test for the innovations being carried out with these tokens.

Current market numbers

Source:, as of 10-Mar-21

Over the past two years, the market has done over US$ 400 million in transaction volume, with more than 5.4 million NFTs being circulated.

It is important to note that market capitalization is an inadequate signal for NFT’s success because it takes into account the prices of those NFT which may never sell at their listed auction price. Thus, we look at transaction volume because it represents tokens being sold. This metric is also distorted by Wash trading, however, it can be scaled down to represent a growth signal for the NFT ecosystem.

March market mania

March 2021 has been a dizzying month for the NFT space. You will probably recognize the artwork below:

Beeple’s Opus

This collage of 5,000 art pieces was Christie’s first-ever digital-only art piece and it was sold at an eye-popping price tag of US$69.3 million. It was a historic sale in many ways: this marked the first time an NFT was sold by a major art auction house and the payment was accepted in cryptocurrency.

With Elon Musks’s offer to sell his ‘song about NFTs as an NFT’ fetching bids of over US$ 1.1 million, Jack Dorsey’s first tweet NFT being valued at US$ 2.5 million, Grimes selling her NFTs for US$ 5.8 million and 3LAU raising US$ 11.6 million in sales the world is waking up to the potential of celebrity NFTs.

Projects like Foundation, Ethernity Chain, Cryptograph, Nifty Gateway, Terra Virtua, Yellow Heart, Valuables, etc are onboarding mainstream celebrities to the world of NFTs. We’re excited to witness the powerful network effects that this phenomenon will bring about, because ‘Celebrity NFTs’ will introduce millions of fans to crypto-tokens and consequently to blockchain technology.

The market is moving at an exponential pace and thus, it becomes essential to segment the NFT space into sub-categories and analyse the potential in each of them.

Segment analysis

Let us now breakdown NFTs into five sub-sectors and analyze how value and volume flows through the sector. The 5 segments analyzed are as follows:

  • Gaming
  • Collectibles
  • Domain Names
  • Real Estate
  • Art
Source: NonFungible

Although we see that Art and Real Estate account for 71% of the transaction value, we’re skeptical that some of this value might be stemming from wash traded assets. Thus, we’re bullish on the Gaming and Collectibles sectors, which take up a mammoth of 77% of the transaction volume of NFTs. These transactions are high frequency and low value and have the potential to grow into a massive industry.

However, even though the market numbers are looking exciting, the NFTs sector is facing numerous challenges.

Hurdles to growth

The overall space is facing the following issues:

User acquisition barrier:
  • Technical knowledge barriers
  • Bubble reputation:
    • Speculative trading of NFTs have made new entrants wary of collectibles’ valuation
    • Example: CryptoKitties & Ether Tulips
Network problems:
  • High gas fees:
    • Cause a drop in use of dApps
    • Assets might be worth less than the transaction fees (high frequency, low value transactions)
  •  High storage costs on Ethereum
  • Slow transaction confirmation
Valuation is complex:
  • NFT Diversity:
    • Each project has its own characteristics which need to be considered while valuing the NFT
    • Subjective valuations
  • Market is still highly speculative
  • Lack of liquidity
  • Whale interference
Malpractices by projects:
  • Wash trading 
  • Fake pre-sale hype
  • Such practices create the illusion of high demand for the project.

Where there are gaps, there are opportunities. Talented people from all across the world are entering this field in order to unleash the full potential of NFTs. Here is a compilation of some of the top projects working in the space.

Snapshot of the current ecosystem

At Woodstock Fund, we have been evaluating NFT projects for last year and here are some projects we’re super excited to support and work with.

Virtual experiences & collectibles: Terra Virtua

Terra Virtua’s mantra is “everyone is a fan of something” and they are transforming the digital collectibles industry. Their platform is a technical marvel and every single product is meticulously designed. They are working with brands like The Godfather, Top Gun, Lost in Space and Mean Girls to bring fascinating collectibles to the NFT world.

Terra Virtua has not only crafted a technically sound platform but they have also created a fantastic user experience with premium content, true ownership of assets, avenues to showcase collectibles, a vibrant marketplace and most importantly, a strong sense of community.

Marketplace spotlight: Mintbase

With both marketplace & minting functionalities and a clean UI, Mintbase is a strong contender to becoming the perfect entry point for the next wave of NFT users. It has been built by a small team and extremely talented individuals. They support 9 categories of NFTs, have a testnet to familiarize new users with the interface and the team is constantly pushing the boundaries when it comes to NFT utilities.

This project has bootstrapped its way into the NFT community’s heart. Their telegram group is always abuzz and the artist support is strong. We are confident that Mintbase’s user centric design will make it one of the top projects in this space.

Bridging deFi and traditional finance: Persistence

Persistence facilitates business financing to increase the speed and efficiency of real-world trade while allowing investors to access new fixed-income investment products. Comdex, a project building on Persistence has done a transaction volume of US$ 41M+.

Team Persistence is working on the edge of DeFi and NFTs. They unlocked the potential of NFTs as collateral and are now working towards closing the US $1.5 trillion business trade finance gap.

NFT art for the digital generation: Ethernity

Ethernity is dedicated to exploring digital art through NFTs and the opportunity they provide for philanthropy and social good. They work with leading figures from the blockchain, music and entertainment worlds like Tyler & Cameron Winklevoss, Christian Vieri, Paolo Maldini, Dmitri Vegas & Like Mike and Michael Rubin.

The CEO, Nick Rose Ntertsas, has leveraged his connections in the entertainment industry to unlock a powerful use-case of NFTs. Ethernity creates a win-win situation for both the NFT collectors and charities.

Farming for NFTs: SuperFarm

With NFTs from SuperFarm, users will be able to access limited edition items and experiences within popular video games. In this way, NFTs are no longer pixels on a screen, but hold power to unlock unique digital experiences.

Elliot Wainman’s EllioTrades community has over 260,000 crypto users. This grants projects that are building on SuperFarm an easy access to a large audience, which will allow them to grow at an exponential rate.

With innovation happening at breakneck speeds, the future of NFTs is definitely bright.

The road ahead

While DeFi competes with the finance sector, NFTs aim to take on the art, virtual worlds, gaming, and collectibles market along with other use cases taking shape as space grows. The user interface of the applications will have to be exceptionally simple and fun in order to attract people to the dApps. 

It is exciting to witness the growth journey of this space. On a parting note we present some trends that we’re looking forward to:

NFT platform aggregators emerge
  • The industry is fragmented, with individual projects focusing on niche areas
  • Incoming users need a unified point of entry to the NFT space
  • Popular projects like Superrare, Known Origin to start supporting more assets
  • More marketplaces open up
NFT game goes viral
  • Gamers easily adopt new technologies
  • Word of mouth ensures a high rate of user adoption
  • Easy integration with mainstream brands
  • Number of Crypto wallets interacting with the game
  • Number of Google Searches
  • Big brands announcing blockchain partnerships
Tokenization of real-world assets to grow exponentially
  • Legal NFTs like real estate deeds, bill of lading, etc will improve system efficiency
  • Media NFTs like art and music allow creators to earn a fair amount for their work
  • Luxury items can also be represented by NFTs to prevent fraud and maintain reliable ownership records
  • Industry outlook towards blockchain and their commitment to digitization
  • Volume flowing through projects Persistence and Arianee
Marketing via NFTs
  • Traditional brands are looking to interact with their audience in innovative ways
  • Digital duplicates are eliminated by NFTs
  • A strong feedback loop between customers and brands
  • Number of online events being supported by the blockchain community
  • Growth of projects focusing on collectibles
  • Non-Crypto brands announcing blockchain plans
ERC-1155 will prevail
  • Allow batch transfers
  • Better scaling
  • Well suited for multiple use cases
  • Projects announcing ERC-1155 support
  • Number of 1155 tokens in circulation
  • Announcements by Enjin team
Value could accrue outside of Ethereum
  • Ethereum cannot handle traffic
  • High gas fees
  • New projects cognizant of Ethereum’s constraints
  • Number of projects building on alternate platforms like Matic, Near, Polkadot, Cosmos, Harmony, etc
  • Events being organized by layer-1 protocols to attract NFT projects, for example Matic’s NFT Fest
NFT ticketing will bloom
  • Online tickets are already mainstream
  • Eliminates fraud
  • Strong control over secondary sales
  • Revenue sharing and sponsor promotion possibilities
  • Decrease middlemen charge
  • Ticketing methods being adopted by blockchain community events
  • Emergence of proof-of-attendance concept

Lets tokenize the world!

Author: Ishita Srivastava
Contributor: Himanshu Yadav
Infographics: Deepa Vishwanathan

The views, information, and opinions expressed are solely those of the authors in their personal capacity and do not reflect the official position or views of Woodstock. The authors have taken the utmost effort to ensure the research is up-to-date and accurate. However, no warranties or representations, express or implied, are made as to the timeliness, completeness, or accuracy of the information. Readers are advised to obtain independent professional advice before making any investment decisions or investing. Woodstock does not endorse the views expressed by the authors. Under no circumstances shall Woodstock, its affiliates, partners, directors, employees, or advisors be liable for any loss suffered by a reader on account of the views, information, and opinions expressed herein.


CryptoKitties market numbers
Art tokens
OpenSea’s Non Fungible Token Bibles
Big brands getting into NFTs
Ticketing market size
Gaming market size
NFT ecosystem report-2
Wash trading
Terra Virtua

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