Innovation, Caution and Absurdity: The NFT Space Continues to Evolve
NFTs are still the latest buzzword in the cryptocurrency space and continue to make headlines. Sales had a breakout year in 2021, and the NFT craze has pushed total NFT sales volume to $24 billion as artists, investors, and entrepreneurs descend upon the budding Web 3 space. As the NFT space matures, new challenges emerge, and innovation thrives. Want to showcase your creativity? Design and mint up to 1000 digital creations with Appy Pie’s NFT Collection generator.
Visa inspires innovation
Credit card giant Visa recently launched an NFT creator program to support small businesses to take part in the digital economy. Cuy Sheffield, the Head of Crypto at Visa, stated, “We’ve seen rapid growth in the NFT ecosystem over the past year,” Cuy Sheffield, head of crypto at Visa, told TechCrunch. “We think NFTs represent a new form of e-commerce.” Visa’s one-year immersive program brings together creators, artists, designers, filmmakers, and more to teach scalability with NFTs. In the future, Visa aims to further embed itself in crypto technologies to follow the future of commerce. “We’re incredibly excited about NFTs,” Sheffield said. “We want every NFT marketplace to be able to accept Visa cards because we think NFTs will exist across many different networks.”
A call for caution
From innovation to calls for caution when investing in NFTs. Roughly $625 million worth of cryptocurrency has been stolen from Ronin, the blockchain supporting the popular crypto game Axie Infinity last week. Ronin and Axie Infinity operator Sky Mavis reported the breach on Tuesday and froze all incoming and outgoing transactions on the Ronin bridge (which facilitates depositing and withdrawing funds from Axie Infinity’s blockchain).
Sky Mavis is now working with law enforcement to recover 173,600 Ethereum (around $600 million) and 25.5 million in the cryptocurrency USDC, which they believe the hacker used to withdraw funds from the network last month. Sky Mavis suspects that an attacker used hacked private security keys to compromise the network nodes that validate transfers to and from the Ronin blockchain. This recent hack further highlights the importance of security and keeping your security keys safe to protect your funds.
“As we’ve witnessed, Ronin is not immune to exploitation, and this attack has reinforced the importance of prioritizing security, remaining vigilant, and mitigating all threats,” the company said in its announcement. “We know trust needs to be earned and are using every resource at our disposal to deploy the most sophisticated security measures and processes to prevent future attacks.” Though the in-game characters Axies have not been compromised, the freezing of transactions has temporarily locked out new players, and the fate of remaining users’ funds on the blockchain is tenuous. Sky Mavis will now collaborate with “law enforcement officials, forensic cryptographers, and our investors to make sure there is no loss of user funds,” calling that its “top priority.”
Beware of NFT scams
Unfortunately, Axie Infinity is not the latest victim of foul play. U.S law enforcement in Los Angeles arrested two twenty-year-old men in connection with an NFT scam worth up to $1.1 million. (3) Launching their NFT project Frosties, which consisted of 8,888 ice-cream scoop cartoon characters in January, the pair sold out their collection on OpenSea. Promising new investors early access to further developments in the project like a metaverse game and character breeding abilities, Frosties created a community of around 25,000 on Discord alone.
Hours after the NFT drop on the 9th of January, the creators abandoned their project, shut down their website, and transferred all the earned funds, effectively “rug pulling” their investment community. Arrested on conspiracy charges to commit wire fraud and money laundering, the pair may face a maximum of 20 years imprisonment.
“Mr. Nguyen and Mr. Llacuna promised investors the benefits of the Frosties NFTs, but when it sold out, they pulled the rug out from under the victims, almost immediately shutting down the website and transferring the money,” U.S. Attorney for the Southern District of New York Damian Williams said in a statement. “Our job as prosecutors and law enforcement is to protect investors from swindlers looking for a payday.” Frostie NFTs originally sold for 0.04 ETH (around $123 to $136), with the price plummeting after the rug-pull. The sharp fall in price has left some investors desperately trying to recover the tokens as they are still visible on the blockchain. According to Markets Insider, in a process called “wrapping,” collectors have been re-minting them with a new smart contract outside the original developer’s control. There are now nearly 2,000 “Wrapped Frosties” on OpenSea, but the floor price is only 0.01 ETH (about $34) which means it remains unlikely that investors will ever recover their investments.
NFT projects head to space
Lastly, on to the absurd. Jeff Koons, the most expensive living artist on Earth, sets his sights even higher, aiming to send his art to the moon. In his new project titled “Jeff Koons: Moon Phases,” the 67-year-old artist will present his first NFT collection with Pace Verso (the Pace gallery’s Web3 platform). His collection is inspired by the technological advancements of humans and their endless fascination with the moon. Koons plans to have each unique digital work from the “Moon Phases” series correspond to a physical sculpture and launch them into space later this year. A limited number of NFTs will be sold through Pace, and proceeds from some of the first sales will be donated to Doctors Without Borders.
“I wanted to create a historically meaningful NFT project rooted in humanistic and philosophical thought. Our achievements in space represent the limitless potential of humanity,” Koons said in a statement. “Space explorations have given us a perspective of our ability to transcend worldly constraints. These ideas are central to my NFT project, which can be understood as a continuation and celebration of humanity’s aspirational accomplishments within and beyond our own planet.”
“This moon-based NFT project, the scale of which aligns with Jeff’s monumental career and impact in the arts, confirms his legacy as one of the world’s greatest creative visionaries,” said Pace President and CEO Marc Glimcher.
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