Summary: Investing in NFT infrastructure, such as protocols and platforms, can provide a more stable and long-term return compared to investing in individual NFTs. This is because infrastructure plays a vital role in the functioning and growth of the NFT market, and as the market grows, so too does the value of the infrastructure.
With that in mind, we have outlined the 5 most promising NFT Crypto Projects that focus on providing infrastructure for the sector:
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Top NFT Crypto Projects
To spotlight the most promising NFT crypto projects, we have scrutinized more than 25 notable NFT-based protocols with investable tokens. This research, fueled by our dedication to inform our readers, evaluated key aspects such as NFT product-market fit, tokenomics, total market potential and community. Following the investigation, we've curated a list of the five most extraordinary initiatives. Each chosen project showcases high potential in delivering unique and valuable assets, making them a strategic consideration for astute investors in the dynamic world of digital art and collectibles.
1. ApeCoin ($APE)
The most promising NFT crypto project for 2023 is ApeCoin ($APE). This crypto token represents the base governance layer for the decentralised community surrounding the ApeCoin DAO and Bored Ape Yacht Club community. Their NFT project and intellectual property is the most valuable in crypto, with a $1.8 billion dollar market cap.
ApeCoin ($APE) will serve as the governance token for a DAO that will invest in building out the Web3 economy and various projects within the sector. This will include investing in both Web3 infrastructure and NFT-based applications. That means that in investment in ApeCoin is the equivalent of buying shares in a VC Fund that is going to deploy capital into the sector on your behalf.
2. Audius ($AUDIO)
Audius is a music streaming protocol powered by blockchain technology that enables creators, fans, and developers to interact using decentralized applications (dApps). Artists can easily manage their own tokens and create NFTs for unreleased music, merchandise and other exclusive content.
Audius is the best NFT crypto project for those who are looking to invest in the music industry. The platform allows fans to earn AUDIO tokens by listening to their favorite artists, making it a fantastic way for investors to gain both utility and financial benefits from their investments.
3. Sudoswap ($XMON)
Sudoswap is a decentralized NFT marketplace and automated market maker that enables flexible order trading for digital collectibles. Their platform allows users to buy and sell NFTs from liquidity pools, making the experience similar to trading on a DEX like Uniswap or Sushiswap. This novel design makes them a capital efficient and cheaper way to trade NFTs compared to traditional platforms like OpenSea.
Sudoswap is the first of its kind when it comes to the NFT AMM design. This means that the total addressable market and potential for the project is effectively uncapped. The $XMON token is currently valued at a $30 million dollar market cap, which means it would need to 100x to reach a similar valuation to its competitor OpenSea ($3billion valuation).
4. Flow ($FLOW)
The Flow blockchain is a smart contract platform that is purpose built for NFTs, the Metaverse and GameFi applications. It is an open and public blockchain with a native governance token, FLOW, that is used to drive the network and incentivize its participants. This includes developers building on top of the protocol and users transacting on it.
Flow has already been adopted by several major game companies such as Ubisoft, NBA Top Shot and Animoca Brands. This has seen the FLOW token’s market capitalization rise to over $1 billion as of this writing, making it one of the most promising NFT crypto projects in terms of scalability and long-term value-creation.
5. Ethereum Name Service ($ENS)
The Ethereum Name Service is a distributed naming protocol on the Ethereum blockchain that allows users to register and link custom names to their Ethereum addresses. This is hugely beneficial for those who are looking to use NFTs as an IP asset, as it gives them a way of securely creating and maintaining their brand in the blockchain space.
The ENS system operates on a decentralized governance model, with holders of the $ENS token voting on proposed changes to the system. The ENS token has a current market cap of $400 million, making it an attractive way for investors to gain exposure to the underlying network’s growth and development.
Investing in NFTs vs Investing in NFT Infrastructure
Investing in NFT infrastructure, such as platforms and marketplaces, can be more beneficial than investing in individual NFTs because it provides a more stable and consistent return on investment. NFT infrastructure companies are responsible for creating and maintaining the technology that allows for the buying and selling of NFTs, and as the use and popularity of NFTs increases, so too does the demand for these infrastructure companies.
Additionally, investing in NFT infrastructure allows for diversification of investments, as it is not tied to the success or failure of a specific NFT or creator. This means that investors have the potential to earn returns regardless of whether a particular NFT or creator is successful.
Risks of Investing in NFT Crypto Projects
There are several risks associated with investing in NFT crypto projects, including:
- Regulatory risk: The regulatory environment for NFTs and cryptocurrencies is constantly changing, and there is a risk that governments may enact laws or regulations that negatively impact the market.
- Volatility: The value of NFTs and cryptocurrencies can be highly volatile, meaning that their value can fluctuate rapidly and unpredictably.
- Liquidity risk: It may be difficult to find buyers for certain NFTs, making it difficult to liquidate investments.
- Smart contract risks: NFTs are often built on blockchain platforms using smart contracts, which can contain bugs or vulnerabilities that can lead to financial loss.
- Counterfeit risk: Some NFT projects may be vulnerable to counterfeit or fake NFTs, which can lead to financial losses for investors.
- Lack of transparency: Some NFT projects may not have a clear or transparent ownership structure, making it difficult for investors to understand who is behind the project and how their money will be used.
- Risk of fraud: As with any investment, there is a risk that NFT projects may be fraudulent, and investors may lose their money.
It is important to conduct thorough research and due diligence before investing in any NFT project to understand the risks and potential returns.
The Bottom Line
In conclusion, investing in NFT infrastructure offers a more stable, long-term return compared to individual NFTs. As the NFT market expands, the value of the infrastructure will rise. Five promising NFT infrastructure crypto projects to consider are ApeCoin ($APE), Audius ($AUDIO), Sudoswap ($XMON), Flow ($FLOW), and Ethereum Name Service ($ENS).
These projects cater to various aspects of the NFT ecosystem, providing a diversified investment approach. However, be mindful of risks such as regulatory changes, volatility, liquidity, smart contract vulnerabilities, counterfeiting, transparency, and fraud. Conduct thorough research and due diligence before investing to ensure you understand potential risks and rewards.