- Despite the buzz, NFTs have a long way to go before becoming mainstream, Rarible cofounder Alex Salnikov said.
- They have to become more affordable and accessible, and companies figure how they might appeal to consumers, he told Insider.
- Interest in the digital assets has skyrocketed, prompting celebrities and leading corporates to put out their own NFTs.
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Non-fungible tokens have skyrocketed in price and popularity this year, as celebrities and major companies jump onto the hype, but they have a long way to go before really reaching the mainstream, according to Rarible cofounder Alex Salnikov.
To do that, NFTs have to become more affordable and accessible, and companies have to think hard about what value they have for ordinary consumers, Salnikov told Insider in an interview this week.
This includes making it easier for people to understand the market and simplifying the purchasing process. Right now, buyers have to set up a crypto wallet and add funds to it if they want to get an NFT.
“It’s not as seamless as just going onto Amazon and buying something,” said Salnikov, who is also head of product at Rarible, one of the biggest NFT marketplaces.
NFTs are a class of unique digital assets – such as videos, audio, images or even tweets – whose ownership is inscribed on blockchain ledgers.
To break into the mass market, those offering the digital assets must first figure out what use they could have for the ordinary buyer, Salnikov said.
“The biggest part of mainstream NFTs that needs to happen is the exploration of the real-use cases that appeal to consumers, in order to participate in that market,” he said.
We don’t yet know what those use cases are, according to Salnikov. At the moment, the digital assets are mainly bought by rich people with an existing interest in crypto, who treat NFTs as an asset class.
Only one person can own an NFT, which makes them attractive for collectors in particular. Others use them as a store of value, or to make a connection with the creator of an NFT, or a community.
Interest in NFTs is skyrocketing. In the 30 days to August 5, a total of 175,179 NFTs were sold for an overall $510.6 million, according to data from NFT tracking platform Nonfungible.com. That is a record for amount of money spent on NFTs in that length of period, it found.
The buzz grew in March when digital artist Beeple sold an NFT artwork for a record-breaking $69 million. Since then, a stream of celebrities such as Katy Perry, and leading organisations such as US Space Force, have jumped in to sell their own NFTs, raising their profile further. NFTs have also entered the sports world, with the NBA’s Golden State Warriors launching an NFT collection. Luxury auction houses Sotheby’s and Christie’s have sold digital assets such as CryptoPunks for millions of dollars.
These high-profile sales of often expensive, one-off NFTs aren’t helping set the stage for the asset class to move into the mainstream, Salnikov believes. Even though mass-market brand Coca-Cola recently launched an NFT, it was for $500,000, he noted.
“It’s still not for the consumer,” Salnikov said. “Big businesses that have intellectual property need to figure out what is speaking to their audience. What are the NFTs that would benefit the audience, not the business?”