Metaversal is a Bankless newsletter for weekly level-ups on NFTs and the onchain frontier
Dear Bankless Nation,
As we reflect on 2023, it’s evident that the NFT space just weathered a tough bear market.
Yet resilience has been our hallmark, with numerous projects not only surviving but thriving here thanks to new advancements and new tailwinds.
Accordingly, today let’s dive into the most prominent NFT trends of this past year, spotlighting the biggest happenings and notable projects that got us to where we are now!
-WMP
P.S. This is the final Metaversal post of 2023! I’ll be back with my next post on Jan. 5th after a little holiday R&R. In the meantime, Happy New Year!
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The 10 Biggest NFT Trends of 2023 📆
1⃣️ Rise of the NFT L2s
When I first started tracking NFTs in 2019, the L2 scene didn’t exist yet.
Fast forward to this year, and we’ve started to see all kinds of NFT-friendly L2 advances.
First-movers like Arbitrum and Optimism have started gaining more minting activity and have seen their evolving tech stacks embraced for launching new culture-centric rollups, e.g. Xai and Redstone.
Big industry names like Coinbase and Zora also joined the fray, deploying Base and Zora Network respectively.
And new upstarts have thrown their hats in the ring, like Frame, an L2 that’s enshrining things like NFT royalties directly into its network.
In other words, the NFT Scaling Era has officially begun!
2⃣️ New PFP Powers
The profile picture (PFP) sector of NFTs was particularly hard hit this bear market, with attention and floor prices caving in for most projects through the first three quarters of the year.
However, some collections bucked this downtrend and became new powerhouses in the PFP category, namely Opepens and Pudgy Penguins.
Launched in May 2023 with Set 001, Jack Butcher’s Opepens have provided a new blueprint for how to release a collectively curated NFT collection over time, capturing the imaginations of thousands in the process.
As for Pudgy Penguins, the project ascended into “blue-chip PFF” status after a string of big developments in 2023, not least among them the placement of Pudgy Toys in 2,000 Walmart stores.
3⃣️ Games Get Gud
The entire NFT gaming scene made strides broadly in 2023, yet it’s safe to say that the space’s reigning S-tier titles—Axie Infinity and Parallel—continued to separate from the pack.
Not only did Axie’s ecosystem swell with a handful of new Axie-based titles, the franchise’s main game also fielded huge upgrades like the arrival of Axie Experience Points (AXP) and the Axie Parts Evolution system.
On the other hand, Parallel released new starter decks this year and kicked off its Closed Beta gameplay, which has seemingly received rave reviews from everyone who’s tried it, including myself.
These two games are better than they’ve ever been, and there’s much more to come!
4⃣️ The Infra Renaissance
There was an explosion of incredible and varied infrastructure developments around NFTs in 2023.
For example, Nouns V3 just open-sourced the first DAO-native forking mechanism.
The ENS Name Wrapper also arrived, offering unprecedented flexibility and functionalities to ENS domain holders.
And we can’t forget Zora, which unveiled Protocol Rewards, a system for rewarding Zora users with ETH.
Yet this is all just scratching the surface. ERC-6551 just turned every NFT into a wallet, mint.fun made minting easy, Privy introduced user-friendly embedded wallets, so on and so forth.
Long story short, it’s a good time to be building around NFTs.
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5⃣️ Multipolar Momentum
While Ethereum has dominated the vast majority of all NFT action for years now, the Bitcoin and Solana NFT scenes joined the NFT party in a big way in 2023.
Of course, the Bitcoin NFT scene has been rejuvenated and surging in activity ever since the arrival of Ordinals, a new native tokenization system for Bitcoin, back in January.
In kind, Ordinals quickly inspired the standardization of other alternative Bitcoin tokenization methods, like Stamps, which has only quickened the pace of recent Bitcoin NFT activity.
As for Solana, the network has become the next big airdrop frontier and has seen its SOL token and activity stats rally in recent months, bringing in a new influx of users that have swarmed to the chain’s top projects, e.g. NFT marketplaces like Magic Eden and Tensor.
Accordingly, now Ethereum, Bitcoin, and Solana are the current majors when it comes to NFTs, and that dynamic seems poised to remain true for the foreseeable future.
6⃣️ Onchain Revival
2023 saw a resurgence in onchain NFTs and onchain experiments.
For instance, the Chaos Roads mint and the recent Terraforms update have pushed the boundaries of what’s possible with blockchain art.
Additionally, projects like BasePaint and Party have paved new avenues for people to coordinate and create together onchain.
Of course, “onchain” isn’t inherently better than “offchain.” It’s just that blockchains are a new type of medium + infra combo, and never before have the creative horizons here been so wide open with potential!
7⃣️ Crypto Social’s Bloom
Crypto social apps have risen to the fore in 2023, with prime examples here being Warpcast and Lens.
With this app surge has come new spotlights on NFTs, as these types of projects can and do natively highlight and facilitate NFT mints.
As such, it’s now becoming that much easier to find what your friends are minting and to share with them what you’re minting at any given time.
Simply put, then, the rising crypto social scene this year has made NFTs more social in general!
8⃣️ Arrival of AI
Notably, 2023 witnessed the first big research undertakings around the crossroads of AI and NFTs.
In the metaverse sector, Upstreet, an NFT-integrated multiplayer world designed for interactions between humans and AI agents, released a 28-page ChatWorld that explored a variety of potential applications for AI agents within Upstreet.
Moreover, gaming experiments like Parallel Colony introduced the idea of “1.5 player games,” where humans will passively guide autonomous AI agents to perform a variety of different tasks, blurring the lines between where human play ends and AI play begins.
These types of efforts, while early, suggest the AI x NFT crossroads can be massive going forward.
9⃣️ RWA Tokenization
RWA stands for “real world assets” on the blockchain, and they can be anything from real estate to physical trading cards.
One of the main ways to bring these sorts of offchain assets onchain? By representing them with NFTs!
Indeed, in 2023 we saw the first high-profile demonstration of what NFT-powered RWAs can look like via Courtyard’s tokenized Pokémon card drops.
This is just one example on the cultural side of things, but more experiments—both cultural and financial—are coming here, and the first blueprints are decisively laid now.
🔟 Going Cross-Chain
2023 was also the year where taking NFTs cross-chain from one network to another became more viable than ever.
This is largely thanks to the rise of projects like LayerZero, the pioneer of Omnichain NFTs for transferring between blockchains, and Holograph, which has developed Hologram NFTs that can maintain consistent IDs on all Ethereum Virtual Machine (EVM) environments.
Additionally, Chainlink’s Cross-Chain Interoperability Protocol (CCIP) arrived this year, paving another robust avenue for projects to make NFTs interoperable across a range of chains.
As such, NFTs no longer need to be isolated to one network. They can go where they need to go, and this is a newer possibility that will undoubtedly be explored extensively in the years ahead!
Action steps:
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🪂 Catch up on my previous write-up: 2024 NFT Airdrops
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📚 Collect this post: Mint it on Mirror
Author bio
William M. Peaster is the creator of Metaversal — a Bankless newsletter focused on the emergence of NFTs in the cryptoeconomy. He also serves as a senior writer for the main Bankless newsletter.
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Not financial or tax advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This newsletter is not tax advice. Talk to your accountant. Do your own research.
Disclosure. From time to time I may add links in this newsletter to products I use. I may receive a commission if you make a purchase through one of these links. Additionally, the Bankless writers hold crypto assets. See our investment disclosures here.