While March has brought exciting news to the NFT market (Yuga Labs, OpenSea), trading volume is on the decline. For example, OpenSea’s monthly volume fell 50% in March from January’s high.

While the decline has led to prophecies of a “bubble,” I don’t believe NFTs are going away. Rather, I expect to see them move beyond speculatively traded assets to productive digital goods. So, what will bring us to this next phase?

Based on 20+ founder interviews, countless hours of podcasts and reading, and too much time browsing OpenSea and Discord, below are specific enablers I’m watching:

• Vertical marketplaces: As Mable Jiang writes, “we are on the verge of the hyper-verticalization of the NFT space.” Just as eBay spawned numerous specialist marketplaces in Web2, fit-to-purpose marketplaces have emerged across gaming (Fractal, Hawku), art (Foundation, SuperRare), fashion (The Dematerialized, Artisant), metaverse land (WeMeta, Parcel), music (Royal, Sound, Decent), video (Glass

• Discovery platforms: Discovery is a key problem if NFTs are a mechanism to onboarding the next 1B users into crypto. While social browsing platforms (Context.app, Gallery.so, Pulsr) and curated opportunities (Future NFT Mints, Premint) are helpful for collectors and traders, games or virtual worlds will likely be the gateway for mainstream users (Axie Infinity and NBA Top Shot as early examples).

• Pricing mechanisms: Regardless of what takes off at the intersection of DeFi and NFTs, pricing will be the key first step. As Maria Shen writes, “lack of accurate NFT pricing creates 2 problems: (1) most NFTs do not have liquidity & (2) financial derivatives cannot form on top of NFTs.” As Nichanan Kesonpat explains, algorithmic-driven models (Upshot, NFTBank) are likely more suitable for low value or “floor” NFTs while appraisal based tools (Abacus) may be more useful for higher value or 1/1 NFTs. While algorithmic-driven models aren’t ideal for subjectively priced NFTs, they’re more scalable and applicable to a broader market.

• Insurance: Recent NFT hacks (OpenSea users, collectors) mean an emerging opportunity to provide mechanisms to safeguard NFT value. Risk Harbor and Nexus Mutual set a precedent in the DeFi space.

• Lending: The widespread adoption of lending as a source of liquidity depends on consumer interest moving down-market toward lower asset values. As Jason Choi writes, lending with NFTs as collateral is “largely tied to the growth of the NFT collectibles/ art market” while lending out or borrowing NFTs is “more tied to the growth of P2E games.” I agree with Jason that collateralized lending startups (Arcade, NFTfi, Backed) face potential competition from existing DeFi players while NFT renting/sharing protocols (reNFT, Vera Labs) are subject to market risk given reliance on scholarship models, experimental markets, and game compatibility.

• Liquidity pools: As Nichanan Kesonpat writes, liquidity protocols (NFTX, NFT20) “open the pool of buyers to those that want to acquire any NFT of the same class, offering faster time-to-liquidity than ordinary marketplace sales.” Decentralized market makers (

• Physical world bridges: Early NFT real world value has been primarily derived through social events (Azuki Garden Party, Ape Fest) and merchandise (Bored Ape Yacht Club Store). I’m excited about continued explorations at the intersection of physical and digital. Further, opportunity exists to bring documents, such as education credentials, concert tickets, and property deeds, into the world of NFTs.

• Mobile: As Gaby Goldberg writes, “we will first see the emergence of mobile-native web3 applications to shepherd in the casual consumer.” Geolocation (Dropverse, Superlocal) and augmented reality (Anima), especially in conjunction with virtual worlds and gaming, could be areas where NFTs and mobile collide.

• Intellectual property: While early days, Molecule is an interesting example of using NFTs for the transfer of IP ownership for medical research. I expect to see other startups creating liquid IP markets via NFTs.

If you have feedback/comments or want to exchange thoughts on the future of NFT infrastructure, I’m excited to chat!

While March has brought exciting news to the NFT market (Yuga Labs, OpenSea), trading volume is on the decline. For example, OpenSea’s monthly volume fell 50% in March from January’s high.

While the decline has led to prophecies of a “bubble,” I don’t believe NFTs are going away. Rather, I expect to see them move beyond speculatively traded assets to productive digital goods. So, what will bring us to this next phase?

Based on 20+ founder interviews, countless hours of podcasts and reading, and too much time browsing OpenSea and Discord, below are specific enablers I’m watching:

• Vertical marketplaces: As Mable Jiang writes, “we are on the verge of the hyper-verticalization of the NFT space.” Just as eBay spawned numerous specialist marketplaces in Web2, fit-to-purpose marketplaces have emerged across gaming (Fractal, Hawku), art (Foundation, SuperRare), fashion (The Dematerialized, Artisant), metaverse land (WeMeta, Parcel), music (Royal, Sound, Decent), video (Glass

• Discovery platforms: Discovery is a key problem if NFTs are a mechanism to onboarding the next 1B users into crypto. While social browsing platforms (Context.app, Gallery.so, Pulsr) and curated opportunities (Future NFT Mints, Premint) are helpful for collectors and traders, games or virtual worlds will likely be the gateway for mainstream users (Axie Infinity and NBA Top Shot as early examples).

• Pricing mechanisms: Regardless of what takes off at the intersection of DeFi and NFTs, pricing will be the key first step. As Maria Shen writes, “lack of accurate NFT pricing creates 2 problems: (1) most NFTs do not have liquidity & (2) financial derivatives cannot form on top of NFTs.” As Nichanan Kesonpat explains, algorithmic-driven models (Upshot, NFTBank) are likely more suitable for low value or “floor” NFTs while appraisal based tools (Abacus) may be more useful for higher value or 1/1 NFTs. While algorithmic-driven models aren’t ideal for subjectively priced NFTs, they’re more scalable and applicable to a broader market.

• Insurance: Recent NFT hacks (OpenSea users, collectors) mean an emerging opportunity to provide mechanisms to safeguard NFT value. Risk Harbor and Nexus Mutual set a precedent in the DeFi space.

• Lending: The widespread adoption of lending as a source of liquidity depends on consumer interest moving down-market toward lower asset values. As Jason Choi writes, lending with NFTs as collateral is “largely tied to the growth of the NFT collectibles/ art market” while lending out or borrowing NFTs is “more tied to the growth of P2E games.” I agree with Jason that collateralized lending startups (Arcade, NFTfi, Backed) face potential competition from existing DeFi players while NFT renting/sharing protocols (reNFT, Vera Labs) are subject to market risk given reliance on scholarship models, experimental markets, and game compatibility.

• Liquidity pools: As Nichanan Kesonpat writes, liquidity protocols (NFTX, NFT20) “open the pool of buyers to those that want to acquire any NFT of the same class, offering faster time-to-liquidity than ordinary marketplace sales.” Decentralized market makers (

• Physical world bridges: Early NFT real world value has been primarily derived through social events (Azuki Garden Party, Ape Fest) and merchandise (Bored Ape Yacht Club Store). I’m excited about continued explorations at the intersection of physical and digital. Further, opportunity exists to bring documents, such as education credentials, concert tickets, and property deeds, into the world of NFTs.

• Mobile: As Gaby Goldberg writes, “we will first see the emergence of mobile-native web3 applications to shepherd in the casual consumer.” Geolocation (Dropverse, Superlocal) and augmented reality (Anima), especially in conjunction with virtual worlds and gaming, could be areas where NFTs and mobile collide.

• Intellectual property: While early days, Molecule is an interesting example of using NFTs for the transfer of IP ownership for medical research. I expect to see other startups creating liquid IP markets via NFTs.

If you have feedback/comments or want to exchange thoughts on the future of NFT infrastructure, I’m excited to chat!