The NFT market has gone from soaring high to almost crashing and burning effectively in a very short period. As NFT investors look to make a quick return on their digital assets, this drive to expect massive growth is causing over-speculation on asset value.
For most NFTs, the average value has decreased by 75% or more in just a few months; with prices plunging, many investors are losing faith in this trend that's turned some into overnight millionaires. A key reason for this downturn is "wash trading," which Chainalysis defines as someone selling their NFT to make it look like a massive demand.
Even with all this chaos, there is still some home, specifically within the music industry. Here are three essential tips that the music industry can use to help lower NFT speculation in the coming months and years.
Revenue Sharing for Streaming Services
For this first tip, investors can have the opportunity to purchase a musician's NFT by obtaining exclusive rights to the revenue incurred by this digital asset. As the artist's music grows in popularity, investors who hold on to the NFT can receive massive payouts. By giving artists a slice of the revenue pie, they'll be able to get their money right away and still own the rights to their music.
Tokenizing Tickets and Exclusive Membership Offers
Second on this list is a growing trend where NFTs function as digital tickets that give the buyer unique benefits. For example, Coachella teamed up with FTX to give customers a chance at getting their hands on the Coachella Collectible Series, which included lifetime passes, meet and greets, and many other options.
Tackling Real World Issues
Finally, by allocating a portion of all revenue from NFT sales to be donated to specific, worthwhile causes, artists and investors can fight causes ranging from climate change to food scarcity. Grimes, a famous Canadian musician, recently released her WarNymph Collection, which brought in more than $6 million in revenue and was sent to Carbon180 to help fight climate change.
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