Are NFTs Dead?

A few days ago, Persona NFT announced the project was going bankrupt, they raised $6,000,000 just 2 years ago.

I think one of the biggest mistakes we made during the NFT boom was convincing ourselves that digital scarcity automatically created value. And I’m saying this as someone who spent years watching people pay ridiculous amounts of money for profile pictures.

Back in 2021, you didn’t necessarily need a good product to sell an NFT collection.

You needed a decent artist, a Discord community, some influencers talking about your project, and enough people believing they could sell their NFT to somebody else for more money.

That was basically the business model of half the industry. And for a while, it worked incredibly well, but five years later, I think we’re finally being forced to answer a question we should have been asking from the beginning.

What exactly are people paying for?

Look at what happened to some of the biggest NFT collections.

Their communities are smaller, their floor prices have collapsed, and many of the incentives that originally attracted buyers have either disappeared or become irrelevant.

Once people stopped believing somebody else would pay more for their JPEG, there wasn’t much left to justify the valuation. Personally, I don’t think NFTs are going away.

Tickets, memberships, gaming assets, digital ownership and authentication are all areas where the technology can make sense in the future.

But I also think the next generation of successful NFT projects will look very different from the collections that dominated 2021.