While their entry has generated much buzz, increasing awareness and “mainstreaming” this emerging industry, several founders of Indian NFT projects and experts in the field said that some of these NFT assets are opportunistic and lack key features. There are drawbacks such as exclusivity, rarity and long-term reliability.
Now, NFTs are a unique digital token that can be used as a digital certificate of authenticity for any asset, digital or physical, be it art, music or tweets. NFTs are bought and sold online like cryptocurrencies. While cryptos are fungible or replaceable,
NFTs are one of a kind.
A big leap forward for NFTs came earlier this year when works by digital artist Beeple sold at a Christie’s auction for $69.3 million.
In India, over the past few months, Bachchan dropped his first NFT collection, Salman Khan announced a partnership with NFT marketplace Bollycoin, Cricket Foundation of former India cricketer Parthiv Patel launched its NFT marketplace for cricket, and Several other actors and Bollywood musicians have signed up. With NFT marketplaces like Colexion.
While some marketplaces are acquiring ownership rights from production houses, others are developing new content and adapting it as NFTs.
“There are a lot of players who have come to this space for a quick land grab,” said Anshum Bhambri, cofounder of FaZe Technologies, which has signed a partnership with the International Cricket Council (ICC) to create exclusive digital collectibles (using NFTs). Signed for cricket. “They’re signing some people up, making some drops and making some quick million dollars,” he said.
Faze Technologies recently raised $17.4 million or about Rs 130 crore in a seed-funding round led by Tiger Global with participation from Coatue and Sequoia Capital India. Dapper Labs, Samsung Next and Courtside Ventures also participated in the round.
Visakha Singh, Vice President and Co-Founder, WazirX NFT Marketplace, said, “I think from the perspective of the entertainment industry, it is being looked at largely through a PR lens. But it is great because it creates awareness and helps bring us into the mainstream.”
Singh is a former actor and a film producer.
In India, retail participation has been minimal so far, which industry stakeholders attribute to the lack of quality NFTs and clarity about the future value of such digital goods.
“If diehard fans want to indicate that they have a certain specific token that represents a moment or experience, that is perfectly fine,” said Nitin Sharma, partner at venture capital firm Antler India Fund. “But many retail investors may be buying these just for speculation. They may not even understand what they are actually buying.”
He added that these digital assets may be subject to securities laws to some extent.
Law experts said that NFTs can be covered under several laws and at present there is not a single law applicable to it.
“When viewed as a derivative of the value of an asset, such as a piece of art that is covered by an NFT, it is important to note that currently only derivatives of financial assets are open for trading and that too a In stock exchanges recognized under specific SEBI regime and stock exchange rules,” said Sunil Jain, partner at Anantlaw. “NFT deals with a non-financial asset like a piece of art, thus no regulatory or policy prescription not part of it.”
Another reason for the lack of enthusiasm according to stakeholders is the quality of NFTs in the market, resulting in a drop in sales.
Newborn Market:
Bachchan’s NFT collection sold for around Rs 7.18 crore in an auction organized by Beyondlife.club. The founder of the platform, Keyur Patel, told ET that the company is targeting a global audience for its NFTs.
Similarly, many of the NFT marketplaces that have emerged in recent months are banking on international audiences and Indian expatriates to bank on them, as the industry is still in the early stages of adoption within the country. According to the data shared by one. Some NFT marketplaces with ET.
Kalmint, an NFT marketplace founded by an Indian, is featured among the top 20 markets globally by DappRadar that tracks sales across multiple blockchains. It sold $2.7 million worth of NFTs between April and October. According to Sandeep Sangli, Founder, Kalamint, the demand from Indian buyers has been sluggish.
Crypto exchange WazirX’s NFT Marketplace said it sold $400,000 worth of NFTs between July and October.
In comparison, according to DappRadar’s website, OpenSea, the world’s most popular NFT market, traded $1.88 billion in NFT volumes over the past 30 days.
Operators of leading Indian NFT marketplaces attribute the moderate growth in sales to socio-economic trends as well as lack of cultural inclination to invest in the arts. “Consumer behavior is something we realized early on, which is why we started establishing ourselves as a global market,” said Kalmint’s Sangli.
However, he added that Indian buyers have picked up in the last two months.