Non-fungible tokens (NFTs) were the most discussed crypto assets in 2021, taking the ‘word of the year’ according to Collins dictionary.
This rising cryptocurrency niche recorded over $23 billion in trading volumes as per the latest DappRadar report. Currently, NFT-related active wallets account for close to 50% of the total crypto industry usage, a statistic that will likely increase given the continued interest in 2022.
Before jumping into the developments and prospects, it is worth understanding why NFTs are gaining traction across the board. Well, there are many factors behind the sudden surge but the most significant one is the indistinguishable nature of NFTs. Each NFT token has a unique value, making them a suitable on-chain asset to represent digital collectibles such as in-game items or off-chain assets like property and tokenized stocks.
While most of the early NFT innovations were on Ethereum, the trend has caught on with decentralized exchanges such as Binance and Crypto.com, both of which launched NFT marketplaces last year. Today, an artist can leverage any of these exchanges to create their own NFTs and trade them on the featured marketplace. So far, Binance has supported the creation and listing of over 2 million NFTs while Crypto.com touts over 220 NFT drops.
Integrating NFTs with Artificial Intelligence (AI)
Going by the rate at which NFTs ballooned in 2021, it is no secret that this market still has a lot of upside potential. Developers in the emerging tech field are now working to integrate blockchain technology with Artificial Intelligence (AI), a move that will improve the efficiency of smart contracts used to create NFTs.
AI leverages computer systems to replicate human intelligence. The concept, which borrows heavily from Alan Turing’s seminal work ‘Computing and Machinery Intelligence’, has found a place in modern-day products, including self-driving cars (Tesla), recommendation systems (Amazon & YouTube) and speech recognition (Siri).
With blockchain and cryptocurrencies emerging as the future of finance, AI is yet again a fundamental tech in improving the underlying infrastructure. At the core, blockchain ecosystems are designed to operate on-chain, leaving a huge gap in access to off-chain data or advanced technologies such as AI.
Luckily, this issue is being addressed by decentralized oracle API providers like Oraichain. This platform is designed to bridge NFT smart contracts with external APIs, featuring a marketplace where developers can access and integrate the best API services. The Oraichain ecosystem also features an NFT generation platform dubbed aiRight.
Unlike the existing NFT marketplaces, aiRight uses artificial intelligence to enhance its capabilities. Creatives who leverage this platform can automatically generate NFTs, alongside copyrights on the aiRight database. The AI functionality can also be used to verify the authenticity of listed NFTs, tracking user behaviour to avoid potential attacks by fraudulent bots.
In addition to the aiRight NFT marketplace, Oraichain features a supporting decentralized data hub. The project recently launched an Annotator Qualification Campaign, enabling whitelisted annotators to earn ecosystem rewards for data labelling (label-to-earn).
Though most of these integrations are in the early stages, the combination of smart contracts with AI will be a game-changer in the NFT ecosystem. Stakeholders will not only be able to mint and sell digital collectables but integrate complex algorithms such as machine learning to improve the current state of the NFT marketplace.
The Holy Grail of Crypto Adoption
Cryptocurrencies, in general, have been around since 2009; however, it is not until recently that the space started to attract people from other industries. NFTs are the digital assets behind this spike in adoption, a sentiment shared by Dallas Mavericks owner Mark Cuban. Speaking at the recently concluded North American Bitcoin Conference, the billionaire told Miami Mayor Francis Suarez that NFTs are what got him fully immersed into the crypto ecosystem,
“I always paid attention to bitcoin, the pricing, the tokens and the [crypto]currencies, But what really got me into it was, about a year ago, when I minted my first NFT.”
Even big brands like Adidas have joined the crypto industry, thanks to the NFT hype. The multinational sportswear manufacturer bought a virtual parcel of land on the Sandbox metaverse, not to mention their collaboration with NFT projects such as Punk Comics and the Bored Ape Yacht Club.
With AI integrations now in the picture, the NFT market is set to open up new opportunities for users in decentralized markets. The integration will likely trigger a shift from the proof of concept NFT innovations to more intelligent and user-friendly blockchain-oriented solutions.
“NFTs, while they’re hot right now and everybody is talking about them, they’re really more just a proof of concept for what you can do with smart contracts and decentralization,” – Mark Cuban.