It is no secret that the NFT sector has seen some bumps in the road over the years. Along with crypto, the industry has been subject to endless scrutiny as well as some market declines.
Whenever any of these happen, there is a narrative of NFTs being ‘done’ and that the end of the industry is near.
But according to Helen Hai, the head of NFTs at Binance, a lot of the value in NFTs is still yet to be discovered and the industry will move past the volatility.
Hope on the Horizon
In an interview with Yahoo! Finance, Hai explained that she has not bought into a lot of the currently popular NFTs and that the real value creation of NFTs has not yet emerged.
“Blockchain and NFTs definitely have long term value. And in my personal opinion, NFTs are definitely going to go up. That’s the bigger direction,” Hai said.
This is a common criticism levelled towards NFTs; that they don’t have much value beyond the speculative. But Hai believes that the industry is still in an early stage of its technological development and that there needs to be more focus on the value being provided for creators and users.
The interview also touched on the current volatility within the NFT market, with sales volumes taking a hit earlier this year. This, of course, prompted many to declare the NFT space dead as a result.
But Hai disagrees and says that just like with the early days of the internet, some level of volatility is to be expected. In fact, Hai says to expect even more volatility given the current sell-off trend among investors and ripple effects of the Ukraine-Russia conflict.
But all these can be put down to external factors and teething issues within the industry as opposed to being an indictment of the industry in its entirety.
“There’s panic. People are wondering, ‘is this actually a single risk, or is there going to be a systemic risk?’” says Hai. “I think the system needs to be improved, but it’s clearly not a collapse of the system.”
While we wait for the volatility to blow over, Hai believes that investors need to become more discerning about what they put their money into. As she explains, not every NFT has tangible value and investors need to take the time to determine which of them are, as they would with the art world.
Time to Grow
The gist of Hai’s opinions during the interview seems to be that the industry is going through a natural transition that will see it face some ups and downs. However, it will still bounce back and hopefully, with more emphasis on value over vanity metrics.
This shift in attention towards the practical value of NFTs is much more prominent these days. Around the same time of the Hai interview, Ripple CEO Brad Garlinghouse echoed similar sentiments, saying that NFTs are actually underrated when it comes to their potential use cases.