Saturday Night Live created a non-fungible token (NFT) skit. One of the clips was eventually sold as an NFT for $365,000 in an auction. Late last month, Saturday Night Live created a diagram of NFTs showing Pete Davidson and rapper Jack Harlow. Ack! On Tuesday, a chart of the NFT, which is just a 10-second video attached with its token, was auctioned off for 171.99 ETH, an equivalent of $364K. An NFT stands non-fungible token which refers to a cryptocurrency that one can link to a file and sell on auction as evidence of ownership.
The NFT bubble is diminishing
In February, the NFT market gained popularity when many artists earned a huge amount of money by selling their GIFs and JPEGs. However, the hype seems to be fading away gradually. The NFT market reached its peak when Beeple, a famous digital artist, earned $69 million from the sales of his art collectibles on Christie’s platform.
While NFT backers have praised it as a unique innovation that fosters progress and democracy in the art industry, which was hitherto made to be favorable only the prominent artists, critics are asking why just an image file could be sold for a whopping $69 million, a development they see as a recipe for economic inequality.
In addition to the above concern, skeptics are worried about the environmental impact of NFTs. They hinged their reason that NFTs are built on the Ethereum blockchain that consumes massive energy because it uses a proof of work consensus mechanism. The higher the number of transactions on the Ethereum exchange, the higher the cost of energy consumed.
The industry needs a secondary market to sustain its growth
Somebody known as “Dr_Dumpling” snatched SNL’s NFT to grant the right to both the token and two tickets to attend a life SNL taping. Till now, Dr_Dumpling has never listed the NFT on the secondary market.
In the past few months, many brands have associated themselves with the prosperous NFT industry, while firms such as Taco Bell and Charmin have been minting their own NFTs. Venture capitals are also springing up. For example, OpenSea, a popular crypto marketplace that auctioned off SNL NFT, raised $23 million through its Series A financing in March.
NBC has used the proceeds of its NFT earnings to support charities. Firms such as The NewYorkTimes, TacoBell, Charmin, among others, had earlier donated their NFT earnings to support charity organizations. Artists are selling their NFTs for vast amounts of money. But can they sustain the rising value?
NFT market is growing at a fast pace but is somehow concentrated on celebrated artists. Some pundits say that there is a huge prospect for an NFT boom. The primary sales are rising in prices. Since March, some crypto artists have sold thousands and millions of their artworks in auctions.
However, to sustain the NFT market’s growth and prevent the bubble from bursting, a secondary NFT market must be readily available. As of now, it is unclear if the highly-priced NFT artworks being bought are resold. Also, one is not sure of the current value of the said NFTs.