It cannot be that you have never heard of NFTs. Artists sell their paintings in NFT format, musicians release NFT albums, and even Banksy's work "Morons (White)" has become a virtual asset. This is a real paradise for digital art connoisseurs and those who simply like to own unique assets. Unsurprisingly, the popularity of NFTs is only growing. But besides the NFTs themselves, there are NFT coins. Let us figure out what it is and which coins are better to invest in.
How do NFTs work?
A token is each entry in the blockchain. In an open blockchain, all tokens are equal to each other and are interchangeable. This means that you can replace one token with another, and nothing will change. However, the non-fungible token technology works differently. Each non-interchangeable token is unique and cannot be faked, split, or imperceptibly replaced. Such technology is ideally suited to secure your rights to any unique object, whether a work of art in a single copy, an object in a computer game, or even real estate.
When users purchase an NFT token, they acquire a certificate for the work. At the same time, the work itself does not move anywhere. It is located on permanent storage called IPFS, InterPlanetary File system. This certificate represents lines of code confirming that it is the token owner who owns the original copy of the object. The NFT token can be compared to a painting that may belong to a gallery, museum, or private person, but the audience can see it in a catalog or at an exhibition.
You can even create an NFT token yourself. This process is called minting. To do this, you need to take a digital object (a picture, a music track, a photo, etc.), register in a marketplace (for example, on Rarible or OpenSea), and upload an object with a description and price. Most services require paying a commission to create a unique token.
What are NFT coins?
NFT crypto coins are virtual assets created based on an existing platform (not to be confused with a trading platform). They are used to purchase NFTs inside the system itself. To make it easier to understand, let us draw an analogy with a gift certificate to a store. You cannot go to the theater with this certificate, for example. Because it is designed for a specific place and purpose — buying things in a particular store. So are the tokens that are used for certain NFTs.
For example, to buy NFTs on the Ethereum-based OpenSea marketplace, you will need NFT crypto coins ETH. To buy on Decentraland, you need MANA coins.
Are NFT coins different from NFTs?
Yes, NFT coins are not the same as NFTs. The most important thing here is not to get confused. NFT coins differ from the NFTs themselves by their fungibility. As mentioned above, NFTs reflect ownership of unique assets. However, crypto NFT coins can be exchanged for other NFT coins of the same value, and the economy of certain NFT projects depends on them. In this sense, NFT coin is essentially closer to cryptocurrency and can be traded or invested in.
NFT and cryptocurrency: what is the difference?
On the other hand, it is important not to confuse NFTs and cryptocurrencies. NFT has significant differences from cryptocurrencies, and the main one is its non-fungibility. The open blockchain, as in NFT, has tokens representing a record in the blockchain. However, if all tokens can be replaced with each other in an open blockchain, and one user's bitcoin is identical to another's bitcoin, then within the framework of NFT technology, tokens do not have the quality of fungibility. In this case, each non-fungible token can neither be exchanged for another nor copied, pided, or replaced.
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Top NFT tokens in 2022
If you are interested in trading or investing in crypto NFT coins, here is a list of top NFT tokens that you should pay attention to first.
MANA coin - Decentraland
Decentraland is a virtual world and community based on blockchain technology. Here, users create NFT lands, estates, and avatars, own and sell them, and participate in the platform’s decentralized autonomous organization (DAO). MANA, Decentraland's own cryptocurrency, and all in-game assets are running on the Ethereum blockchain.
Decentraland stats:
- Market cap: $1,222,253,164
- Fully diluted market cap: $1,445,249,778
- Volume / Market cap: 0.09016
- Circulating supply: 1.86B MANA
*All data is current as of October 2022.
Decentraland features:
- The basis of Decentraland is the MANA cryptocurrency, which can be used to purchase land plots.
- There is an opportunity to sell and resell the land to earn money.
- You can receive passive income from the lease of land.
- You can build any object limiting yourself to imagination alone and place an advertising banner or a showroom with a product.
- Since Decentraland is directly connected to NFT, you can collaborate with digital artists, for example, open a gallery with NFT paintings.
- Players can not only lease land or engage in construction but also conduct seminars, gamble, or create chat rooms.
ORI coin - Orica
Orica is designed for novice cryptocurrency users. It is created for those who appreciate creativity and are looking for great art. Orica aims to revolutionize the NFT ecosystem by ensuring that even small ideas can be recognized by many, and everyone who participates will receive royalties from this NFT. Orica is the first marketplace to set such a goal.
Orica stats:
- Market cap: $16,004
- Fully diluted market cap: $16,004
- Circulating supply: 83,999,900.00 ORI
*All data is current as of October 2022.
Orica features:
- Orica is an NFT marketplace that allows each artist to pay a commission for minting after making a sale.
- This is a marketplace with Proof of Art (PoA) verification to protect collectors from buying stolen works.
- With the initial NFT proposals, any artist can raise the necessary funds before creating.
SAND coin - The Sandbox
The Sandbox Game is a multiplayer online game using blockchain technology with decentralized finance (DeFi) elements and non–exchangeable tokens (NFT). Sandbox is a whole game metaverse in which players can buy and sell lands, create and sell their assets – NFT tokens, and participate in project management, determining the vector of its further development.
The Sandbox stats:
- Market cap: $1,186,583,423
- Fully diluted market cap: $2,374,005,490
- Volume / Market cap: 0.1267
- Circulating supply: 1.50B SAND
*All data is current as of October 2022.
The Sandbox features:
- The Sandbox project ecosystem is based on three products: VoxEdit, Marketplace, and Game Maker.
- VoxEdit is software for creating and animating objects from cubic 3d pixels.
- Marketplace is a platform for buying and selling in-game assets.
- Game Maker is a software for creating scenarios of games hosted on the project lands.
XTZ coin - Tezos
Tezos is a blockchain project, the distinctive advantage of which is the built-in management mechanisms for updating the network. Changes in the Tezos blockchain are carried out through coded proposals from the owners of a certain number of Tez tokens (XTZ), after which a vote is held in the community. The Tezos protocol has the ability of self-development, so the network is easily updated.
Tezos stats:
- Market cap: $1,243,204,795
- Fully diluted market cap: $1,272,503,518
- Volume / Market cap: 0.0158
- Circulating supply: 911,943,778.48 XTZ
*All data is current as of October 2022.
Tezos features:
- Smart contracts on Tezos use the unique Michelson programming language and are usually written using more complex languages combined with Michelson.
- Tezos uses a PoS variant called Liquid Proof of Stake (LPoS), a unique implementation used only in Tezos.
- Network members with more than 6000 Tez coins can become delegates and create, sign and place new blocks in the Tezos blockchain.
THETA coin - Theta Network
Theta is a platform for hosting, distributing, and promoting video content. It is built on the blockchain and works on the basis of smart contracts. The main idea of the platform is that the computing power for watching videos is provided not by some centralized platform and its servers (as in the case of YouTube, for example) but by the users themselves. Video platforms that host videos, authors, and users can connect to the Theta Network.
Theta Network stats:
- Market cap: $1,026,992,896
- Fully diluted market cap: $1,026,992,896
- Volume / Market cap: 0.02311
- Circulating supply: 1.00B THETA
*All data is current as of October 2022.
Theta Network features:
- Video platforms can reduce the cost of expensive video hosting equipment, attract new users to their services and earn tokens.
- Users also earn tokens for providing their capacities to other network participants.
- Streamers can receive increased income since no one else will take part in the profits.
- Theta Network cooperates with leading global companies such as Google, Sony, Samsung, and Binance.
AXS coin - Axie Infinity
Axie Infinity is a Pokemon–like crypto game in which participants raise, fight and exchange cute NFT pets called Axies. The game has two cryptocurrencies: Axie Infinity Shards (AXS), which can be bought and sold on cryptocurrency exchanges, and Smooth Love Potion (SLP), which is credited to players for the time spent in the game. AXS owners can be rewarded for placing their tokens, playing, and voting on key management issues.
Axie Infinity stats:
- Market cap: $969,698,753
- Fully diluted market cap: $3,152,307,777
- Volume / Market cap: 0.05048
- Circulating supply: 83,056,186.67 AXS
*All data is current as of October 2022.
Axie Infinity features:
- Players can change the appearance and genetic data of Axies, allowing developers from the gaming community to introduce their personal ideas into the universe of the game.
- You can participate in PVP battles and receive prizes for getting on the leaderboard.
- You can collect and sell rare Axies.
Conclusion
Understanding the NFT market is not an easy task. However, learning the basic differences between different types of crypto assets will help you reduce risks and make the right decisions in this volatile ecosystem. Therefore, always be careful and cautious, and approach the choice of an asset for investment only after deep research.
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