After the cooling of DeFi, can NFT become the new hotspot?

As the enthusiasm for Decentralized Finance cools down, practitioners in the blockchain industry are beginning to look for new investment opportunities and hot topics. Recently, non-fungible tokens (NFTs) seem to be taking the baton from DeFi, becoming the focus of market attention.

Data shows that as of October 28, the total trading volume of the NFT market has reached $133 million, with over 4.96 million NFTs sold and an average price of $26.9. These three indicators have shown a significant upward trend in the past month, in stark contrast to the declining popularity of Decentralized Finance.

NFT is a unique digital asset, with each token having unique identification information that makes them non-fungible with each other. This characteristic makes NFTs particularly suitable for areas such as digital art, collectibles, and gaming items. Unlike divisible and fungible tokens (such as Bitcoin), NFTs place greater emphasis on their uniqueness and scarcity.

This year, the NFT market has rapidly heated up due to a project called "Pineapple" (MEME). This experiment, originally intended to satirize "fast food-style DeFi projects", unexpectedly generated over $1.2 million in trading volume within 24 hours. The price of Pineapple tokens soared to $1930.2 in a short period, creating a jaw-dropping wealth effect.

This event has sparked an innovative wave of the integration of Decentralized Finance and NFT. Various NFT artworks and collectibles have started to enter the trading market, among which the 21st piece of the blockchain artwork series "Portraits of a Mind" was sold for over $130,000, setting a record for NFT auctions. In addition, well-known IPs such as Batman and the NBA have also begun to venture into the NFT space, launching digital collectible cards.

However, despite the vibrant development of the NFT market, its scale and influence are still relatively limited compared to DeFi. Data shows that an active user base of a leading NFT project is only 24,000, while a well-known DEX has 300,000 active users. The scale of the NFT market is only about 2% of the DeFi market. Therefore, it may be premature to claim that NFTs can completely replace DeFi.

In fact, NFTs are not a new phenomenon. As early as 2017, Cryptokitties rose to fame as the first practical application of NFTs. However, due to the limitations in application fields and target audiences, its popularity did not last long. This year's boom in NFTs is largely driven by high return expectations and market speculation, which may carry a certain degree of speculative nature.

The long-term development potential of NFTs should not be overlooked. In addition to games, collectibles, and artworks, NFTs have broad application prospects in areas such as intellectual property, digital rights confirmation, identity authentication, and electronic ticket storage. However, to realize these possibilities, NFTs still require a conducive development environment and more technological breakthroughs.

For the current NFT market, we need to remain rational and vigilant. Excessive enthusiasm may lead to a bubble, which is detrimental to the long-term healthy development of the industry. As someone said, "Innovation comes at a cost," but this cost should not be a huge bubble triggered by speculation.

Overall, the future development of NFTs is full of possibilities, but it still faces many challenges. Whether it can truly become the next blockchain hotspot after DeFi remains to be seen and will require the test of time and market considerations. In this process, both investors and practitioners should remain calm and focus on the actual applications and value creation of NFTs, rather than blindly chasing short-term gains.