The sale of non-fungible tokens (NFTs), digital assets that represent real-world objects such as art, reached $10.7 billion in the third quarter, a leap of more than 800% from the previous quarter.
The data from decentralised applications portal DappRadar highlights the growing demand for this latest offshoot of the crypto assets sector.
Non-fungible tokens are unique units of data stored on a blockchain and are typically used to represent non-interchangeable, or fungible, versions of digital files.
The market for NFTs has grown inexorably since the first NFT project was launched in 2015. In 2020, the market tripled in value to more than $250 million and has continued to soar. In the first quarter, sales exceeded $2 billion, 20 times the previous quarter. In March, auction house Christies sold a digital collage as an NFT for $69 million.
While it may be some time before NFTs become a part of fund manager’s portfolios, money is being put into developing more use cases involving NFTs.
Crypto settlement platform Ripple has announced plans to set up a $250 million fund to support developers working on NFT projects.
“While NFTs have opened the door for a tokenized future, actually navigating these concepts is a different ball game for many,” said Monica Long, general manager of RippleX at Ripple. “By starting with marketplaces and creators, our fund seeks to take the guesswork out of NFT projects to unlock unexplored tokenisation use cases on the XRP Ledger.”
The surge of the NFT market was also noted in a recent Funds Europe webinar on digital assets and the likely transformation of the funds market. The webinar can be heard here.
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