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From Success to Failure: The FTX Saga

Cryptocurrency exchange FTX and its founder and former CEO, Sam Bankman-Fried, were at the center of a significant collapse in the crypto industry in late 2022.

FTX was founded by Sam Bankman-Fried, the CEO of small trading firm Alameda Research. Alameda made money by buying and selling cryptocurrencies in different parts of the world, using borrowed money (leverage) to fuel its trades and make larger returns. As the price of cryptocurrencies soared, Alameda had no trouble paying back its loans in either dollars or crypto. However, as more sophisticated investors entered the market, these types of trades became less lucrative for Alameda. In an effort to bring in additional revenue, Bankman-Fried decided to build a cryptocurrency exchange, resulting in the creation of FTX. The exchange became popular with investors, who were attracted to the trading discounts offered through the use of a token called FTT. Alameda served as the main market maker for FTT, buying and selling a majority of the tokens and using them as collateral for more loans to facilitate its trading activities. Initially, the token was valued at almost $80 and there are currently almost 250 million in circulation. However, FTT proved to be the downfall of the company. The FTT was part of a rewards scheme for customers of the exchange, who could use the token as collateral and execute trades at a discount. However, the tokens were not widely distributed and a large portion was owned by FTX and affiliated companies, as well as Bankman-Fried’s hedge fund, Alameda Research. This lack of transparency allowed Alameda Research to use FTT to make risky bets on other cryptocurrencies and financial products, funneling money from the FTX exchange to the hedge fund. The largely unregulated world of cryptocurrency allowed these practices to go unnoticed until the recent collapse of FTX, leading to bankruptcy proceedings and legal and regulatory scrutiny for Bankman-Fried.

The events leading up to the collapse began on November 2nd, when CoinDesk published a report revealing that FTX-affiliated trading firm Alameda Research, also run by Bankman-Fried, held a position valued at $5.8 billion in FTT, the native token of FTX. The report also disclosed that Alameda’s investment foundation was in FTT, rather than a fiat currency or other cryptocurrency, raising concerns about the undisclosed leverage and solvency of Bankman-Fried’s companies.This raised concerns about FTX’s financials, CZ the CEO of rival exchange Binance sold his company’s FTT holdings, causing the value of the token to plummet and leading to a run on the currency.

FTX valuation through the years

October 31, 2019: $25 billion
January 1, 2022: $32 billion
November 1, 2022: $10.3 billion
November 9, 2022: Zero

The many problems for FTX and Alameda began when the crypto market started to decline and the value of FTT dropped. In fact, the value of FTT has significantly decreased since then, falling by around 90% from almost $25 per token to less than $2.50. This drop in value alone could erase much of Alameda’s equity. Alameda struggled to pay its lenders, leading to a downward spiral for both the exchange and the hedge fund. The news prompted a liquidity crisis at FTX, with customers demanding withdrawals worth $6 billion in the days following the report. Bankman-Fried sought funding from venture capitalists and eventually turned to rival exchange Binance for a bailout. Binance initially announced a nonbinding agreement to buy the non-U.S. business of FTX, but ultimately backed out after conducting due diligence. The value of FTT fell by more than 80% in two days, and the crypto market as a whole lost billions, falling below a $1 trillion valuation.

On November 11th, Bankman-Fried stepped down as CEO of FTX and was replaced by a court-appointed CEO with restructuring experience. The company filed for Chapter 11 bankruptcy protection. In the hours following, FTX reported a possible hack in which hundreds of millions of dollars’ worth of tokens were stolen. The Bahamas also froze the assets of an FTX subsidiary and took control of FTX assets held in the country. Bankman-Fried was later arrested by Bahamian authorities and extradited to the U.S. to face criminal charges, which he has pleaded not guilty to. He was released on a $250 million bond, the largest in history, in December 2022.

The collapse of FTX had significant repercussions on the international crypto community, as the company was a major player in the industry. Its failure shook investor confidence and demonstrated the risks and vulnerabilities of the volatile crypto market. The aftermath of the collapse also highlighted the importance of transparency and proper risk management in the crypto industry. The events leading up to and following the collapse of FTX are still being investigated and the full extent of the damage is not yet known. It remains to be seen how the collapse will impact the future of the crypto market and the businesses and individuals involved.

After the recent collapse of a company valued at more than $30 billion, it is expected that there will be some remaining value in the exchange. While certain assets may still have some value, the token for this company (FTT) is expected to decrease in value as more information becomes available about the company’s bankruptcy. Some investors may hope that the company will be bought out of bankruptcy, while others view FTT as a collectible item similar to Zimbabwean trillion-dollar bills. In the future, FTT may be seen as a new type of collectible worth marveling over.

The FTX collapse serves as a cautionary tale for those involved in the cryptocurrency industry and highlights the importance of due diligence when choosing an exchange. It remains to be seen how the industry will respond to the collapse and whether regulatory changes will be implemented to address the issues that led to the downfall of FTX.

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Avalanche NFTs Now Available to Shopify Merchants via Venly Partnership

Avalanche, a leading blockchain platform, has recently announced a partnership with Venly, a NFT (non-fungible token) marketplace, and Shopify, a popular e-commerce platform. This partnership allows Shopify merchants to design, mint, and sell their own NFTs on the Avalanche network, providing a major advancement for the adoption of blockchain technology and the use of NFTs in e-commerce and digital ownership. Through the partnership with Venly, Avalanche NFTs are now available to millions of Shopify merchants through the Venly Shopify NFT merchant app. This app allows merchants to easily design, mint, and sell NFTs in just a few clicks, diversifying their store offerings for customers. Buying and selling NFTs for customers will be just as seamless as the existing merchant experience, as Avalanche is able to finalize transactions nearly instantly and at a low cost.

For those unfamiliar with NFTs, they are unique digital assets authenticated on the blockchain, providing a reliable way to verify ownership and authenticity. They have gained popularity in recent years for their use in the art world, where they have been used to sell digital artworks for millions of dollars. However, their potential extends far beyond the art world and into any industry that deals with unique digital goods.

The partnership between Shopify and Venly allows millions of Shopify merchants to easily create and sell their own NFTs through the Shopify platform. This opens up new opportunities for merchants to sell a wide range of unique digital goods such as music, videos, and other forms of media using NFTs.

The integration of NFTs into the Shopify platform is significant for several reasons. Firstly, it allows merchants to benefit from the decentralized, transparent, and secure nature of the blockchain while providing a user-friendly experience for their customers. Secondly, it brings NFTs to the general public, giving consumers the ability to purchase and own these unique digital assets directly from Shopify merchants.

The app represents a new chapter in the evolution of e-commerce and digital ownership. It signifies a shift towards the use of blockchain technology and NFTs as a means of verifying ownership and authenticity of digital goods. This partnership could potentially lead to further adoption of NFTs in various industries and pave the way for new and innovative uses of blockchain technology.

The partnership between Shopify and Venly is a crucial development for the NFT industry and the adoption of blockchain technology. It brings the power of digital ownership to millions of merchants and consumers and has the potential to shape the future of e-commerce and digital ownership.

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Look into the Viral Bonk: The Solana Meme Token


Have you heard about Solana Bonk? This meme token has taken the cryptocurrency world by storm, garnering viral popularity and seeing its value skyrocket in a short period of time. Built on the Solana blockchain, this token features a cartoon character called Bonk and was initially created as a joke. However, it has since gained a large and dedicated community of supporters.

Solana Bonk’s success can be attributed to a number of factors. One of the main reasons is its status as a meme token, tapping into the trend of using cryptocurrency as a way to showcase and trade internet memes. This has helped Solana Bonk stand out in a crowded market and attract a dedicated following. Additionally, Solana Bonk has benefited from the growing popularity of the Solana blockchain, which boasts lower transaction fees and faster speeds compared to Ethereum, the most commonly used blockchain for non-fungible tokens (NFTs). In fact, the value of Solana Bonk has increased by over 2500% in the past week alone.

But what is a meme coin, you might ask? A meme coin is a type of cryptocurrency that is created as a joke or for entertainment purposes and is often based on internet memes. These coins are not typically intended to be taken seriously and are not expected to have any real-world value or use. An example of a meme coin is Dogecoin, which was created in 2013 as a parody of the then-popular cryptocurrency Bitcoin and features the Shiba Inu dog from the “Doge” internet meme as its mascot.

On the other hand, an altcoin, or alternative coin, is a type of cryptocurrency that is an alternative to Bitcoin. Altcoins are often created to improve upon certain aspects of Bitcoin or offer unique features that differentiate them from the leading cryptocurrency. Some examples of altcoins include Ethereum, Litecoin, and XRP. While meme coins are typically created for fun and do not have a serious purpose, altcoins are often created with the intention of being used as a viable alternative to Bitcoin. While some altcoins may also incorporate elements of internet memes or popular culture into their branding, their primary focus is generally on offering a functional and useful cryptocurrency.

It’s worth noting that the crypto market is currently experiencing a “crypto winter,” with the prices of major cryptocurrencies like Bitcoin and Ethereum dropping significantly. Despite this, Solana Bonk has managed to thrive. This may be because it’s not being taken too seriously and is seen as more of a fun, novelty token rather than a serious investment. However, some have expressed concern over the sustainability of Solana Bonk’s rapid growth and the potential for it to be a bubble. It remains to be seen if the token will be able to maintain its current level of success or follow the fate of other meme-based cryptocurrencies that have ultimately failed.

Solana Bonk is an interesting development in the world of cryptocurrency. Its success as a meme token highlights the potential for cryptocurrencies to be used in new and creative ways, beyond just being a financial asset. Whether Solana Bonk will continue to thrive or fade into obscurity remains to be seen, but it’s definitely a token worth keeping an eye on.

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The Ethereum Blockchain Upgrade and how it will Change the way Brands Market NFTs

The Ethereum blockchain is by far the most popular blockchain and rightfully so with its millions of users and billions in transaction volume each day. Built to support various types of apps for art, games, social media and just about anything else you can imagine. The Ethereum Blockchain played a key role in the explosion of popularity for non-fungible tokens (NFTs) and decentralized apps. While Ethereum’s value has exploded due to the expansion of these use cases, there have been some worries about energy usage and high gas costs brought on by increased network activity.

 

The Merge POW-> POS

The fundamental restructure with Ethereum’s switch is from a Proof of Work to a Proof of Stake consensus method. In contrast to PoW techniques, which require miners to solve cryptographic puzzles in order to validate transactions, PoS mechanisms intrinsically provide an incentive for validators to keep and stake tokens. By staking ETH, you can earn rewards from validating transactions. This introduces a positive, more sustainable approach for the most popular blockchain. By transitioning away from the energy-intensive equipment required for PoW mining, ETH will dramatically reduce its ecosystem’s energy requirements by 99.98%.

Ethereum will be able to process somewhere between 20,000 and 100,000 transactions per second using Proof-of-Stake. The speed improvement from the current rate of 10–20 transactions per second is up to 999,900%. These exponential speed increases will assist in reducing network congestion (bottlenecks) and gas prices. The Merge will unlock scalability and performance while still allowing ETH to operate as one of the largest and most secure network in the world.

 

In recent years, Ethereum has faced harsh criticism for its electricity demand and carbon emissions. In the last year alone, a number of brands have introduced NFT-related initiatives, only to quickly cancel them in response to consumer backlash— most concerned with the environmental impact.

In November 2021, The founder and CEO of Discord, Jason Citron announced the shift in policy just a few days after hinting at an NFT update to halting all current plans for NFT integration, following widespread community backlash as many users started canceling their Nitro subscriptions. Since it is expected that these online communities will continue to evolve, Citron’s comment does not preclude NFT inclusion in the future. With the Merge, brands might describe how the new Ethereum-based NFTs emit less carbon-heavy experience than older ones to encourage new engagement from customers. Web3 activations will become a seamless part of long-term marketing campaigns, as brands try to create unique user experiences and new products.

Credit: THEGAMER

Merge + Surge + Verge + Purge + Splurge

 

A graphic from Miles Deutscher a breakdown of ETH stages. Credit: @milesdeutscher

After the September deadline, Vitalik Buterin, co-founder of ETH, spoke about the four stages of Ethereum’s roadmap.

The Surge – Starting sometime in 2023, Ethereum will introduce sharding, a scaling solution which will further enable cheap layer-2 blockchains, lower the cost of rollups or bundled transactions, and make it easier for users to operate nodes that secure the Ethereum network.

The Verge- Introduces Verkle trees as an upgrade to Merkle Proofs. This will optimize storage and help reduce node size on the Ethereum blockchain

The Purge- Aim to improve network congestion by reducing the hard drive space needed by validators

The Splurge-which will include “all the other stuff”- smaller enhancements to maintain and ensure ETH network performance.

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NFTs — “a forever transaction”—

Robbie Baxter, a Standford School of Business alumnus with over 20 years of experience in strategy consulting and marketing, coined the popular business term “membership economy,” which instructs brands on how to develop enduring relationships with their clients. Companies and organizations are always thinking about growth, with most growth being fueled by technology. Blockbuster became a victim of the world-changing around them when Netflix offered to its customers a “forever transaction” — a subscription charge giving access to the same experiences with added perks and loyalty programs for users. Blockbuster heavily depended on each movie transaction to drive revenue. This is where Netflix had the advantage. For what you paid during your weekly trip to Blockbuster, you could get a full month of unlimited rentals through Netflix. By 2010, Blockbuster had officially declared bankruptcy. This disruptive change to the industry paved the way for Netflix to experience explosive growth as technology-enabled new ways of engaging customers in an ongoing, authentic way. 

Direct-to-consumer (D2C) platforms have now fueled the upswing in the global subscription sector, which was formerly dominated by B2B subscriptions. D2C models provide simplicity and predictability that are advantageous to both businesses and their clients. They support continuous client connections and produce recurrent revenue. Therefore, it should come as no surprise that many companies are following in the footsteps of Netflix—looking for subscription management solutions to take advantage of the growth opportunity. 

 

Let’s take a dive into two e-commerce companies that are utilizing new D2C technology to build relationships with their customers. 

The first is Amazon. Its current market cap of $1.6 trillion dollars stems from its Amazon Prime members. The annual subscription takes away the pain of paying for shipping along with a host of other services for its policyholders. At the end of 2021, there were nearly 160 million Prime members in the U.S. Why does this matter? Because Prime members spend more than double on the e-commerce site than the spending of non-Prime Amazon members. Subscriptions enhance their members’ experiences as it allows the site to make recommendations for products and services you may be interested in due to past purchases. Amazon One-Click ordering saves its members time by eliminating the steps that require you to enter your user name and password for every order. 

Finding the best way to sell your products and services online is a challenge for many small businesses. Shopify’s online store platform makes it simple for companies of all sizes to launch their operations and later develop by adding new features and services. The Amazon Prime like Membership offers members exclusive content. Shopify merchants can build member engagement by offering access to  exclusive member-only web pages & products. 

 

User participation in any online internet community generally follows the 90-9-1 rule: 

  • 90% of all users are lurkers. They read, search, navigate, and observe, but don’t contribute
  • 9% of all users contribute occasionally
  • 1% of all users participate a lot and account for most of the content in the community

Users start contributing to communities soon after they go live, but everyone contributes at a different rate—participation in communities is highly skewed and unequal. A small number of hyper-contributors in the community end up producing most of the community content. To address participation in social media and online communities the best companies focus on long-term relationships with their customers. NFTs and blockchain technology are changing the infrastructure that enables trusting relationships. The idea is that NFTs are a kind of loyalty card — in the form of a cryptographic key — that a brand’s top fans can use to access exclusive items. Like Amazon, Nifty Bridge offers a One-Click Wallet which sets up wallets for our clients to make purchases in a single click. This reduces friction and creates a seamless NFT purchase experience for all the brands we work with. Through our partnership with Shopify, we can help brands strengthen their community and build long-term value and utility for their customers. Our tokengating app enables customers to unlock special perks, products and real-world experiences with merchants through NFTs to unlock special perks, products and real-world experiences with merchants through NFTs.

Whether your brand is an online business or not, a loyalty program should be a major element in your customer retention strategy. It’s your ticket to not only retaining current customers but also attracting new ones.

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Driving Change Through NFT Integration

 

NFTs are driving positive change by shifting art away from its homogenous landscape of elites to open accessibility for anyone, anywhere with a computer. Inclusivity throughout the ecosystem is the key to mainstream adoption of crypto usage. One of the top reasons people avoid crypto investing is that they simply do not understand it. Yet, you don’t need a tech or science degree to learn about crypto or blockchain technology. If you’re reading this, you’re smart enough to get into crypto. It doesn’t matter what gender you are. Just start dipping your toes into the water. NFTs present an opportunity for a new, level playing field. Not only will this hopefully lead to a more diverse and gender-balanced group of prominent artists, but it will also allow artists across income levels and geographies to have a greater chance of making a living by selling their art.

 

Women are becoming more active in NFTs and cryptocurrencies, and their art is some of the best. Maliha Abidi, a Pakistani-American artist launched her unique project, Women Rise, which produced a collection of 10,000 NFT art pieces that represented the different qualities of incredible women from all around the world. Her work focuses on fighting for marginalized communities and promoting social justice. In 2015, all United Nations member states adopted the 17 Sustainable Development Goals (17 SDG) to combat the global challenges we face— including poverty, inequality, climate change, environmental degradation, peace and justice. Women Rise is one of the first NFT projects to commit to these goals. The collection contributes to the economic empowerment of women and girls through the donation of 7.5% of all primary sales to be distributed to a mix of global organizations supporting gender equality, girls’ education, and support for mental health. Abidi has committed to building a unique school in the metaverse, which may act as a sort of virtual school and provide educational programs for hundreds of millions of kids worldwide.

Maliha Abidi: Women Rise

Enter the AZNVerse is a unique NFT collection striving to shift the global spotlight towards the South-East Asian community. The project is backed by Indonesia’s biggest crypto exchange Tokocrypto – releasing 10,000 NFTs that represent unique Asian culture and heritage. Each NFT is unique with numerous designs that include historical Asia figures. “This undertaking was born out of our drive to signify our wealthy cultural heritage as Asians,” said Eko, an AZN initiator and TKOangel. “With NFT as the medium, not only do we push for representation, but we also seek many more people to tap into NFT and dive deeper into its possibilities.” NFTs will open community space for AZN Holders to connect, contribute, and converge while amplifying Asian representation around the world. NFTs are not just about the art itself but about the community around it, the use it represents and the meaning it holds for creators and buyers.

Going to Space: Inspiration4 NFT Auction

Going to Space is an NFT collection powered by the global space community of astronauts, engineers, scientists, and artists. In 2021 The St. Jude Auction raised 200 million dollars for St. Jude Children’s Research Hospital to battle childhood cancer and provide additional funding for continued research. Mission Commander Jared Isaacman led the Inspiration4 space launch, as artists from around the world contributed to the project for the auction to begin at liftoff and end at splashdown. Mission Pilot, Dr. Sian Proctor, made history during the trip by being the first black woman to command an orbiting spacecraft and launched her first-ever NFT “Seeker” to record the accomplishment and post it to the collection. The astronauts and creative communities that took part in this historic event quickly became an inspiration for thousands of young people.

These projects are pioneering new technologies, driving brands forward in their positions on social and environmental concerns, and tapping into popular culture to target fresh audiences. In a world that has fundamentally changed, NFTs are leading positive change across brands and businesses.

 

 

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Marketing Between Industries-what to expect in years ahead

 


Today’s branding extends far beyond a piece of fruit on the back of your smartphone. It includes nearly every aspect of the brand’s identity, activity, endorsements, loyalty programs, and performance. Yet the one constant in all of these elements will always be: product differentiation. Crypto-based tools have seen an explosion of interest from brands and agencies that think Web3 will create a competitive advantage for their products. Already, the rise of non-fungible tokens (NFTs) is being harnessed by artists, brands, and creators in the business of selling physical items, digital products, and experiences to ultimately build brand awareness.

And it’s just getting started…

Kristin Robinson, Billboard’s music publishing reporter says, “Technology has always been a really big part of the music business, and has really dictated how we make music, how we consume music.” Those of us who are a little older can still remember records being sold at record stores, then onto tapes, and next was CDs. Nowadays, consumers purchase music overwhelmingly through digital downloads and subscription-based streaming services. Although making the switch might have initially appeared intimidating, most music listeners now have no trouble using these digital platforms to listen to their favorite musicians. Artists also sell experiences—attending a concert is an experience, and going backstage for an exclusive “meet and greet,” is also an experience.  Many professional musicians now get the majority of their income from this sector as online music sales profits have grown ever-leaner over the past two decades.

NFTs allow artists to more deeply incorporate participation from their biggest fans. The performer will sell tickets directly to fans for their upcoming concerts by creating and issuing NFTs for tickets. These concert tickets will serve as both pieces of art and keys to unlock additional experiences between the fan and the artist; as they will be NFTs that the fans will own forever and may proudly display. In the future, fans will evolve from purchasing a song or album to “owning their fandom”. Building a digital relationship with the artist will bring the sense of an exclusive club along with it. The traditional method of ordering a t-shirt online will be replaced by real ownership of the NFT collection. Unlocking access to the shirt will become available to fans demonstrating different levels of commitment to the artist—downloads, subscriptions, buying merch, accumulated time listening to albums, and attending concerts. 

Brands stand to benefit tremendously from the implementation of NFTs, especially as their industry comes to rely more and more on e-commerce. The online storefront, Shopify, released its NFT integration platform to unlock special perks, products and real-world experiences with merchants. Brands thrive on many elements that make NFTs possible, such as exclusivity, rarity, and special invitation. Those who acquire access to exclusive products are broadcasting their interests and priorities to the world. NFTs can forge design partnerships where NFTs provide a link between the real world and the virtual. For example, a brand could sell an NFT that represents a physical pair of shoes to be purchased in-store. Then through a partnership with online games, the brand could sell an in-game version of the NFT, allowing your digital avatar to wear them. Brands can reimagine the added value component for VIP-rewards clubs. NFTs use can be required to verify that someone has had the experience necessary to purchase the product. By owning the valuable pieces of the brand, consumers become members of an exclusive group who gain exclusive access to new merchandise drops, attend special events, and are provided with unique services. 

Switching from Web 2 to Web 3

The most popular type of content is digital. Facebook, Instagram, and Twitter have all leveraged the concept of digital content to make billions of dollars. Still, there are some drawbacks for conventional creators, particularly the ease with which content can be copied on these open platforms. This results in disproportionate compensation for their innovations and creativity. Incorporating blockchain technology will verify authenticity, by identifying the original digital object, producing a limited number of copies from it, and then uniquely tracking each replica. NFTs will grant creators more control over monetization and content rights for their creative assets, allowing them to maximize their profits.

The Value of Every Idea Lies in the Using of It.

Nike needs no introduction, the venerable manufacturer of athletic footwear and gear began to employ NFTs in 2019 to pair digital assets with their own physical products. The integration of Web3 tools will allow users to securely buy and sell Nike products securely. Yum Brands, the parent company of some of the world’s most well-known fast-food franchises produced and offered for sale a number of Taco Bell NFT gifs, all of which sold out in under 30 minutes. During the 2021 Olympic Summer Games, Team Britain released their NFT campaign where fans could show their support by purchasing NFTs for various limited-edition collectibles. There’s always something that makes your brand different from the others. Something that makes it desirable and unique. NFTs’ lasting strength stems from the fact that it addresses problems for artists, brands, and creators alike by offering a known history, immutable ownership, and practical use cases for content. 

 

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How the Shopify NFT Integration is charting a new path towards Web 3

Shopify’s NFT integration is simplifying the process of buying and selling digital products for every day consumers– here’s how:

With the new Shopify NFT beta program, brands can sell digital products or NFTs the same way they would sell a pair of pants. Beyond simply being collectibles, these tokens can be used to create unique experiences for their most loyal and active customers. App partners like Nifty Bridge can help brands leverage these tokens to increase revenue, customer retention, and brand loyalty by using token gating technology both online and in person. These experiences may include discounted merchandise, early-access to drops, in-person events, and collaborations with other brands. Token gated experiences will help brands build a stronger community and provide an easy path into the world of Web 3.

Why NFTs?

In today’s incredibly competitive ecommerce landscape, brands are constantly searching for new ways to stand out and retain customers. During COVID, brands started to realize the importance of having an online presence as they adapted to no longer being able to rely on in store experiences. Now, its not just enough to have a great product and online experience, you need to give customers a reason to keep coming back. NFTs allow your customers to engage with your brand in a new and exciting way that promotes ownership and connections between each other. Imagine just by owning a Patagonia vest you could automatically get digital and real world incentives when you shop. NFTs allow for that exact experience by providing keys to customers that can unlock a variety of experiences both in stores and online.

Success with NFTs isn’t reserved for the largest of companies either. The meta-economy will power new opportunities for small brands and will impact how customers communicate, shop, and socialize. According to Epsilon, 80% of consumers are more likely to make a purchase when brands offer personalized experiences. NFTs enable customers to display their brand affinity to others and claim a piece of your company’s identity. In the future, these tokens will act as a digital ID allowing for personalization without sacrificing privacy or security. 

To leverage NFTs and any of these features on your Shopify store, contact Nifty Bridge.

 

 

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What Global Adoption of Cryptocurrencies and NFTs mean for the Future

 

At the height of the digital finance boom, the cryptocurrency market was valued at more than $2 trillion. Since the start of 2022, cryptocurrencies plunged 60%, according to data from CoinMarketCap.com. Economic factors like inflation, stock markets, and Fed monetary policy have a major influence on the value of the crypto market. Investors in digital assets have to plan and adapt to this high volatility regularly, but there are a few ways the government is attempting to mitigate it.

 

How governments will regulate cryptocurrency markets and custody is a key dispute. There are two issues that continually surface: taxation and debanking. There is a lack of consensus among tax authorities around how to treat cryptocurrencies as they don’t have the same tax reporting as conventional investments. For instance, similar to how cryptocurrencies are taxed, the majority of NFTs may be regarded as property. In some cases, they might also be regarded as securities or commodities. There isn’t a  clear one-size-fits-all answer to the taxation of digital assets. However, a big factor is always whether the asset has the potential to grow in value over time. In these cases, NFTs start to look a lot more like investments than simply products.

Debanking is the process of traditional banks suspending the accounts of businesses with digital currency. This process is very indiscriminate in regards to where a digital asset business is allowed or not allowed to access banking services. Cyberattacks, extreme market conditions, or other operational difficulties could halt withdrawals and transfers without being backed by a bank. Being a digital asset without access to bank services is a big problem for cryptocurrencies. Some countries are already adopting their own central cryptocurrencies. This proposed idea of a retail digital dollar would result in a radical change and would not provide the same anonymity as cash. 

 

Energy and Consumption

One of the main concerns is the environmental impact of crypto mining and the large-scale emissions. Bitcoin, the world’s largest cryptocurrency, currently consumes an estimated 150TWh of electricity annually. This massively energy-intense process is occurring at a time when entire sectors of the global economy are seeking to reduce energy use and decarbonize–posing  environmental, social, and governance (ESG) problems. Without the intervention of a government incentive for blockchain companies, further opportunities for change could be lost. 

 

No Regulation, Bad Regulation, and Good Regulation

 

Across the world, nations have different levels of excitement towards the crypto market. In the United States, specific cryptocurrency laws and regulations vary state by state under existing money transmitter rules. On the federal level, the House and Senate members have introduced a few bills addressing digital assets, most notably, The Responsible Financial Innovation Act. This proposed bill is a landmark bipartisan legislation that aims to create a complete regulatory framework for digital assets.“Digital assets, blockchain technology and cryptocurrencies have experienced tremendous growth in the past few years and offer substantial potential benefits if harnessed correctly. It is critical that the United States play a leading role in developing policy to regulate new financial products, while also encouraging innovation and protecting consumers,” said Senator Gillibrand. The main refute of the adoption of this bill is determining which tokens are to be monitored and by which agencies. The SEC and the CFTC have yet to clarify the distinction between securities and commodities for the thousands of digital assets in existence, making it difficult to access the legal status of each digital asset.   

 

There is a spectrum in terms of countries looking at a blank sheet versus being locked in with their enacted legislation. Since virtual currencies are flexible, the region with the greatest crypto regulatory laws will also see the greatest adoption of cryptocurrencies. In countries like Singapore and the United Kingdom, there are already legislated systems. Some figures in the crypto industry continue to be against new regulations. According to them, it will stifle innovation and violate the fundamental decentralization that is at the heart of cryptocurrencies’ nature. Yet more regulation could mean more stability in a notoriously volatile crypto market. Proposing legislation that will give investors the certainty and clarity that their investment will be protected. Without a regulatory framework in place to ensure the protection of digital assets, few people will be enthusiastic to invest. Not all countries are following the lead of Singapore and the UK. Important exceptions include nations like Japan and New Zealand that use an income tax system as well as Switzerland, China, Germany, and the Netherlands, where there are separate tax laws for selling cryptocurrencies. Countries want to make sure that they are doing enough for these companies to want to stay and establish themselves.

 

So what sort of things will countries need to add to become a leader in the digital currency sector?

Having a crypto tax code:  Using crypto assets exposes you to potential tax liability. By introducing tax exemptions, softening new tax reporting mandates, and deferring initial tax on digital coins earned from mining, will create an environment that attracts investors.

Adding banking services for the crypto market: A new regulatory framework will increase stability by safeguarding long-term investors, deter fraud in the cryptocurrency ecosystem, and offer enterprises clear guidelines so they can innovate in the market. For cryptocurrency enthusiasts, ETFs are the holy grail that will boost liquidity and the adoption of cryptocurrencies for investment purposes. They provide exposure to the crypto without the additional expenses of ownership. 

 

The crypto market’s recent fall has given rise to some very real worries. Even the most fundamental details, such as who is in charge of regulating the area, are not entirely clear. Government action is a challenging task, but there is growing support as people understand that regulation is required for stability in the space. 

If you are looking to bridge your Web 2 business into Web 3 please connect with Nifty Bridge for more information.

 

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How to Compare and Evaluate Different Crypto Projects

You’ve found a project that seems promising, now you want to check out the details

First, take a look at the whitepaper.

It is a smart approach to research and fully understand a given NFT project, regardless of whether you are experienced crypto professional or just crypto-curious. The whitepaper serves as an informative guide presenting the necessary tools to evaluate and assess whether or not ideas are worthwhile. Whitepapers can be intimidating at first, but once you start reading a few, you’ll feel more at ease and probably will have learned something to level up your crypto acumen. 

Understand the Web 3 Space… 

The market for non-fungible tokens has already become highly fragmented as a result of the rapid growth in the number of NFT projects. Now more than ever, developers are further dividing the NFT ecosystem by building upon several different blockchains. This combination of new marketplaces and increasing complexity for the average consumer leads to many unanswered questions. Is this project adding value to the brand? Are there similar NFT projects who are offering something better? Keep in mind that not all NFT projects or collections are created equal. Before selecting which NFT project is most popular, you want to consider which project offers the most innovative and real-world use cases. When exploring new investment opportunities in the NFT space, confirm that the project you have in mind has come up with an original idea that sets itself apart from the rest. These projects will earn you new money with higher returns for early investors.

Organic or Synthetic Hype?

If the NFT project already has an active community with interesting and engaging backstories, it is unlikely to diminish in value. Still, new NFT projects are increasingly working with celebrities and influencers in order to generate buzz for their releases. Read and make sure the project’s enthusiasm is not the result of social media propaganda. 

In an industry where developers choose anonymity, reputation and experience are crucial aspects. Take a deep dive into the project’s development team. It is vital to gather information on their technical skills and history…Do I understand what this project is trying to develop? If so, you are in the right position. 

Every part of the finance industry has scammers out to steal your hard-earned money. When it comes to cryptocurrency, scams take on a slightly different appearance. Such as malicious cyberattacks for private keys, phishing attempts, and fake airdrops. The most reliable projects have a well-designed, debugged user interface wallet. These are the easiest to handle. 

If you are interested in starting an NFT project for your brand, schedule a meeting with Nifty Bridge and enjoy access to NFTs without the hassle of crypto headaches.