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The most profitable NFT-projects in 2021

This year for cryptocurrency investors has become a symbol of the growing popularity of non-fungible tokens (NFT). The concept, which has been known to the cryptocurrency community for several years, has only relatively recently become widespread. This has led to a rapid growth of NFT-related projects. Today, we will take a closer look at this phenomenon and take a look at the ten most popular NFT-related startups.

What is NFT?

 Non-fungible tokens or NFTs are crypto-assets in blockchain with unique identification codes and metadata that distinguish them from one another. Unlike regular cryptocurrencies, they cannot be traded or exchanged on an equivalent basis. This distinguishes them from interchangeable tokens, which are identical to each other and therefore can be used as a medium for commercial transactions.

NFTs have the potential for a wide range of real-world applications. For example, they are an ideal vehicle for the digital representation of physical assets such as real estate and artwork. Because they are blockchain-based, NFTs can also be used to remove intermediaries from the trading process, as well as closer communication between content creators and their community of consumers. 

Much of the current NFT market is centered around collectibles such as digital art, unique cards and rarities. A prime example is the NBA Top Shot platform, which collects unique moments related to the U.S. National Basketball Association. in the form of digital cards. Some of these cards have sold for millions of dollars this year. 

Another popular use of NFT is to create historical value for memorable moments in the history of the modern Internet and crypto market. Twitter CEO Jack Dorsey recently tweeted a link to a tokenized version of the first-ever tweet. Its NFT version was sold for $2.5 million.

Like physical money, cryptocurrencies are fungible, meaning they can be sold or exchanged. For example, one bitcoin is always equal to the value of another bitcoin. Similarly, one Ethereum coin is always equal to another cryptocurrency coin. This characteristic of interchangeability makes cryptocurrencies suitable for use as a means of transaction in the digital economy.

NFTs have created a new paradigm by making each token unique and irreplaceable. Moreover, in some cases, non-fungible tokens can be combined with each other, creating new digital objects with other unique identifiers. This opens up a huge number of possibilities for trend gamification.

Most Ethereum-based NFTs are ERC-721 tokens. Its code is different from the ERC-20 token code, which is used to create interchangeable Ethereum-based coins. The main difference is the characteristics that make ERC-721 tokens unique. One of them is the tokenId parameter, which can be used to distinguish one NFT from another.

Why are NFTs so popular?

The ERC-721 standard was invented in September 2017, but the idea of unique digital objects had been discussed in the crypto investor community at least a few years earlier. In 2018, the first notable wave of NFT popularity was triggered by the CryptoKitties project. It is an online game in the form of a decentralized app in which users exchange non-fungible tokens associated with virtual images of cats. Its main feature was the ability to “breed” virtual pets by combining and creating new tokens.

The popularity of CryptoKitties was once so great that at one point more than 11 percent of all transactions in the Ethereum blockchain were NFT transfers of this project. Most interestingly, CryptoKitties was not the first NFT project – that title belongs to the startup CryptoPunks, which significantly outperformed CryptoKitties in terms of transaction volume, but already in 2021. So what are the reasons for the high popularity of non-fungible tokens? Here we should highlight several of their advantages at once:

  • Uniqueness. The fact of owning something in a single instance can already give the thing a fundamental value;
  • Immutability. Data about the NFT is recorded in a blockchain, where it cannot be deleted or changed;
  • Limitations. Collections of NFT tokens have a relatively small number of instances (e.g., the CryptoPunks series tokens are only 10,000);
  • Digitalization. Thanks to NFT, almost any physical object can be linked to information in a blockchain, which gives it additional value.

The benefits of NFT in 2021 dramatically attracted the attention of a huge number of investors. Because of this, projects related to non-fungible tokens showed unprecedented returns in a time span of just a few months.

Top 10 NFT projects of 2021

Below we take a look at the most popular series of non-fungible tokens, exchange platforms and other projects associated with the new trend. The rankings are in random order, meaning a spot on the list does not automatically make one project better than another.

NBA Top Shot

NBA Top Shot is a platform created by Vancouver-based blockchain company Dapper Labs with the support of the NBA that allows users to acquire collections of the best basketball moments in the form of unique digital objects. To get NFTs from the NBA, which are called “moments,” you can buy sets from which tokens are dropped, or you can buy the tokens themselves already on the secondary market.

These “moments” vary in a certain degree of rarity and have a value depending on the following rarity scale:

  • Regular, meaning moments that can have more than 1,000 digital copies. They can be purchased in common sets, such as those priced from $9 for nine moments;
  • Rare (150-999 digital copies): these moments can be found in rare sets and up at prices starting at $22. One has seven common moments and at least one rare moment;
  • Legendary (25-999 digital copies): these can be found in Legendary sets priced from $230;
  • Platinum Ultimate (3 digital copies): only available at auction;
  • Genesis Ultimate (only 1 digital copy): also available only at auction.

Since its inception in just about two years, the number of active NBA Top Shot users has surpassed the 1 million mark. At the same time, the volume of transactions with unique moments of basketball games in a year exceeded the level of 1 billion dollars. Many tokens from NBA collections have increased in value dozens of times since the beginning of the year and continue to increase in value as NFT becomes more popular.

CryptoPunks

In 2017, Matt Hall and John Watkinson, founders of Larva Labs in New York, created a program that generated thousands of different weird-looking characters. At first they thought they had the makings of a smartphone app or game. They ended up with a paradigm-changing model for the digital art market and challenged the very concept of “ownership.”

CryptoPunks is a 24×24 collection of pixel art style images. There are exactly 10,000 tokens in total, each with its own personality and a unique combination of distinctive, randomly generated features. There are 6,039 male “cryptopunks” and 3,840 female “cryptopunks.” They are divided into their own categories based on different characteristics, such as hair color, availability of accessories, and so on. There are also eight punks without any distinguishing characteristics, sometimes called Genesis punks.

The Larva Labs website has a composite image of all 10,000 “crypto-punks.” Anyone can save a copy of the image file. Each token also has its own page detailing its features and full transaction history. But only one person can officially own an NFT, as the official ownership of each instance of CryptoPunks is laid out in the Ethereum blockchain code. 

The system invented by Hall and Watkinson is sometimes compared to owning a piece of physical art that is permanently loaned to a public museum. As a reminder, CryptoPunks pioneered the world of NFT and have deservedly gained the most popularity among investors.

Rarible

Rarible is an Ethereum-based platform that facilitates the creation, sale, and purchase of ownership of digital works of art through NFT. Although Rarible was launched as a centralized platform, its creators plan to gradually decentralize it over time, eventually transferring control to a decentralized autonomous organization (DAO) to be managed by the Rarible community. Rarible plans to achieve this through its RARI management token, which gives users the right to participate in the management of the platform. In 2021, Rarible announced that it will launch Flow, a blockchain-based trading platform from Dapper Labs, which is designed to host decentralized applications and enable fast transactions.

To use Rarible, you need an Ethereum wallet like Metamask, Argent or Coinbase, and some ETH to pay commissions. You can purchase ETH directly on the platform with a credit card. After signing your wallet into the service, you can browse the NFT Rarible trading platform looking for non-fungible tokens to buy. The platform displays top-selling items and art collections, and also allows you to search for NFTs in categories such as photos, games, and memes. NFT sellers can choose whether to set a fixed selling price for their assets or hold an auction.

Also, if you’re an artist or creator, you can use Rarible to create your own NFTs. If you produce NFTs, you don’t have to sell them, you can just post them on the platform. That said, you must pay two fees when you first issue a token – one to give your wallet permission to interact with Rarible, and one to “call the mint function” that puts your file into the Inter-Platform File System (IPFS) and Ethereum blockchain.

Both fees are network fees – the cost of interacting with the blockchain – and do not go towards the revenue of the platform itself. For future issuance, you will only be required to pay a transaction fee, although this may vary depending on the load on the network. When you do decide to sell the NFTs you’ve created, the Rarible Art trading platform will allow you to collect NFT license fees from sales, which means you can get a percentage of the price not only on the first sale of your NFT, but also on subsequent token transactions by third parties. In fact, this opportunity to make easy money on a chain of token transactions is what has made the platform so popular.

OpenSea

OpenSea is another decentralized trading platform that allows you to buy and sell non-interchangeable tokens. It was founded in 2017 and served as a marketplace for transactions of CryptoKitties NFT tokens, but later expanded its services significantly for its customers. OpenSea now supports a myriad of digital asset types, including NFTs for art, domain names, gaming items, music, and more.

OpenSea is built on the Ethereum blockchain, so you must have an Ethereum wallet to work with the platform. OpenSea also supports several other blockchains, including Polygon and Klaytn. You can choose from 241 payment methods, including Stablecoins, so anyone can buy and sell digital items on the platform.

Hashmasks

Hashmasks are virtual works of art created by a decentralized team of 70 artists run by Suum Cuique Labs. Each “mask” has a distinctive feature, the most notable of which are skin color, character, and eye color. Hashmask is different from any other ordinary NFT drawing because each mask has no name. The owner of the token is responsible for naming their Hashmask, thereby making a creative contribution to the artwork.

The creators of the project have produced 16,384 tokens and associated images. The masks have their own gradation in value similar to the NFT-series CryptoPunks. Here, the background of the image is important, as well as special features like hair color, eyes, and so on. The most expensive deal with this collection of non-fungible tokens was the sale of the mask for 420 ETH or $1.69 million at the current cryptocurrency exchange rate.

Enjin

Enjin is a Singapore-based blockchain platform designed to be used as an infrastructure for decentralized games, meta sites, and non-fungible tokens. Originally created in 2009, it is now one of the largest gaming community platforms in the world, spanning hundreds of thousands of gaming communities and around 20 million registered players.

Enjin Coin (ENJ) is the project’s native token. It has about 835 million ENJs in circulation out of a maximum of 1 billion. Between January and April of this year, ENJ has seen tremendous growth, with its price rising from 14 cents to $3.46 in just a few months.

Enjin already boasts a large community of users. The success of the platform is due to the general rise in the popularity of NFT and meta universes. These ideas continue to dominate the cryptocurrency market and thus should ensure a steady demand for the platform in the future. 

Flow

Flow is a decentralized ecosystem and blockchain-based platform with scalable solutions for interactive interaction, decentralized application projects, and blockchain-based games. The Flow network focuses on providing a scalable environment and architecture for fast transactions without congestion to create an environment for NFT, dApps, and games. The Flow team was involved in the creation of NBA Top Shot, another popular platform already mentioned in this ranking. 

Flow solves the scalability problems seen in the Ethereum platform without using sharding. Instead, the platform is based on the Proof-of-Stake algorithm. In this way, Flow ensures smooth operation and minimizes network congestion for dApps and games.

Flow distributes work on the network among the nodes that support the system, with different nodes being assigned different tasks depending on their technical capabilities. Increased blockchain throughput is achieved by separating nondeterministic processes (e.g., forming transactions into a block) from deterministic processes (e.g., executing that block of transactions).

To reduce the load on the Ethereum network, Flow uses a multi-node architecture with multiple roles. To make scaling the entire network possible in an efficient and cost-effective way, Flow breaks up the block validation process using four roles of network participants, allocating different tasks to different types of nodes.

Decentraland

Decentraland is an Ethereum-based project that aims to encourage a global network of users to manage a shared virtual world. Decentraland users can buy and sell digital real estate by exploring, interacting and playing games in this virtual world. Over time, the platform has evolved to implement interactive applications, internal payments, and even a sphere for virtual communication.

Decentraland uses two types of control tokens:

  • LAND. This is a non-interchangeable token used to determine the ownership of land representing digital real estate;
  • MANA. It is a cryptocurrency that facilitates the purchase of LAND as well as virtual goods and services used in Decentraland.

Changes to Decentraland’s software are introduced through a set of blockchain-based smart pins that allow participants who own MANA to vote on policy updates, land auctions, and subsidies for new developments.

Axie Infinity

In Axie Infinity, players buy, breed, and fight against each other with monsters called Axies to win in-game SLP currency. This business model is known as “play-to-earn,” where players earn real rewards for their time spent playing the virtual game.

Each Axie is a non-fungible token and collectible item that can be bought or sold in off-game exchanges. Players must have at least three Axies to start a battle, with the cheapest ones selling for about $200. The most expensive monster was sold back in 2020 for 300 ETH.

The game’s explosive popularity has helped development studio Sky Mavis make millions of dollars this year. The company has generated $700 million in revenue from in-game transactions, 17% of which is owned by the developer. Its capitalization is expected to solidify above the $1 billion mark by the end of the year. 

The game developer recently raised $152 million in Series B, led by Andreessen Horowitz, valuing it at $3 billion. Because the company does not own all of Axie Infinity’s tokens, its valuation is below the market capitalization of its currency. Sky Mavis says it will use the fresh capital to launch an improved combat system, a decentralized exchange, and a new game.

The Sandbox

The Sandbox is an Ethereum-based meta world and gaming ecosystem where users can create, exchange, and monetize resources and game experiences in a virtual world. Pixowl’s project is set to overturn the gaming industry, in which platforms own and control user-generated content and the rights of creators and players are restricted. In Sandbox, users completely own their virtual objects.

The project consists of three key components:

  • VoxEdit. Allows users to create and animate 3D objects in the meta-universe. These objects are called assets and use the ERC-1155 token standard, allowing both interchangeable and non-interchangeable tokens to be created using a single smart contract;
  • Sandbox Marketplace. This is a marketplace where users can publish and sell their assets after they first upload them to the InterPlanetary File System (IPFS);
  • Sandbox Game Maker. Allows users to create 3D games for free.

Although no programming knowledge is required to participate in The Sandbox, its powerful toolkit allows users to create and embed valuable assets in the rapidly growing field of online games and virtual worlds. This is what led to the growth of the native SAND token to its all-time high in 2021.

Conclusion

Before the advent of non-fungible tokens, objects in the virtual world had no fundamental value just by the fact of their existence. In other words, an ordinary computer file could be copied many times without changing its properties in any way. With the advent of NFT, people were able to monetize virtual content, which became the foundation of the modern Internet. Thus, unique tokens can become not just a passing fad for crypto investors, but a very independent sphere of the digital asset industry.

This means that in the future, investments in NFT-projects will still please us with rapid growth. And to accumulate your first investment capital, we advise you to use the services of our Bitcoin cloud mining platform Hashmart.io!

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