NFT Explained | Understanding the 6 Mainstream Types of NFTs

There are countless types of NFTs in the market, which type do you favor the most?

Oct. 2022, Vincy, Data Source: Footprint Analytics – Top Collection Overview

While the simple CryptoPunk sparked the NFT craze, NFTs now encompass content far beyond individual profile picture art and collectibles. Today, hundreds of new projects on the blockchain are proposing dozens of new use cases (some more likely to be popular than others).

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This article aims to provide a convenient classification guide for beginners, introducing the 6 mainstream types of NFTs in today's market.

1. Collectibles

Collectibles were the first type of NFT to enter the mainstream. As early as 2017, people began paying high prices for strange types of computer images known as Curio Cards, Rare Pepes, and CryptoPunks. Over the years, the term "NFT" became well-known, used for holding and collecting non-fungible personal data images without practical value, becoming synonymous with this type of digital asset. Subsequently, projects like Bored Ape Yacht Club, Mutant Ape Yacht Club, and others attempted to turn the communities around these collectibles into something bigger.

By market capitalization, trading volume, and floor price calculations, BAYC, MAYC, and CryptoPunks are the largest collection projects. Compared to art and digital asset gaming categories, they are the most popular projects and are listed as NFT blue-chip projects.

2. Art

Another popular type of NFT is digital art.

A notable feature is that artists can own the copyright to their artwork, and buyers can confidently purchase genuine authorized copies, eliminating counterfeit copyrights. Additionally, artists do not need to rely on third parties to protect their work, saving intermediary costs and ensuring artists receive more income.

One of the most memorable examples is the sale of artist Beeple's "Everydays: The First 5000 Days" in March 2021 for a staggering $69.3 million. This prompted another wave of NFT art projects, with projects like Art Blocks Curated ranking 7th in trading volume over the past 30 days.

3. Digital Asset Games

Many current games adopt the Play to Earn model, where each character in the game is an NFT, such as avatars, equipment, and cards. Players can acquire these digital assets by participating in the game, believing that the uniqueness, scarcity, transferability, and ownership provability of NFTs are crucial for enhancing the value of in-game items.

However, after the gradual rise of NFTs in early 2021, it is evident that the P2E game model combined with NFTs has attracted many. Data shows that the number of users participating in games has been increasing monthly, reaching a historical peak in January 2022.

Axie Infinity is one of the companies that first used this model to make players spend more time in the game. The most notable country is the Philippines, where hundreds of thousands of people play NFT games daily. During the pandemic, they earned more income by playing games than from traditional jobs. Subsequently, various game-related applications emerged, such as M2E.

4. Sports

NBA Top Shot is one of the most successful collaborations between professional sports and NFTs. NBA Top Shot is essentially a series of basketball cards in NFT form with its own market. One of NBA Top Shot's most famous moments is a clip of LeBron James' dunk, part of the Throwdowns series. Currently, it is priced at over $380,000, making it one of the most expensive sports collectibles in history.

5. Website Domains

ENS domains are built on the Ethereum blockchain and consist of custom encrypted wallets containing identifiable names or numbers. They simplify typical Ethereum addresses, which are just long strings of alphanumeric characters, with ".eth" being the most popular. They allow users to send and receive funds more easily.

ENS domains can be used for website addresses and applications, as well as sold as NFTs. Users can register domains on the Ether Name Service website for prices ranging from $5 to $640.

According to the rankings by Footprint Analytics, ENS: Ethereum Name Service has consistently ranked in the top 10 in trading volume over the past 6 months. In September alone, the number of new registrations reached 437,000. User interest in it has sharply risen mainly due to the trading prices of these domains potentially reaching millions of dollars.

However, the biggest drawback of crypto domains is that most browsers currently do not support them.

6. Virtual Worlds

Virtual worlds include digital games and land within virtual worlds. While still highly speculative, these types of NFTs have enormous potential and could be used for advertising in digital games, creating virtual assets, and more.

Conclusion

There have been many different types of NFT projects. They are not only closely related to digital and virtual assets but with continuous technological breakthroughs, NFT applications related to the real world will continue to be created, making transactions more transparent and secure.

This article is contributed by the Footprint Analytics community

Footprint Community is a global collaborative data community where members create impactful insights through visualized data. In the Footprint community, you can get help, build connections, and engage in blockchain-related learning and research on Web 3, Metaverse, GameFi, and DeFi. Many active, diverse, and highly engaged members motivate and support each other in the community, creating a global user base to contribute data, share insights, and drive community development.

The above content is for personal reference and communication purposes only, and does not constitute investment advice. If there are obvious misunderstandings or data errors, feedback is welcome.

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