As a researcher with experience in the technology industry and a particular interest in the blockchain and digital assets sector, I find the current trend of South Korean retailers shutting down their NFT platforms concerning but not entirely surprising. The sharp decline in NFT trading volume, as evidenced by data from OpenSea and NonFungible.com, has likely led companies to reconsider their investments in this space.
The leading South Korean merchants of non-fungible tokens (NFTs) are closing down their NFT marketplaces due to the recent market slowdown. Lotte Home Shopping, which is the e-commerce division of Lotte Group, has declared that it will cease operations for its NFT store on July 2nd. Launched in May 2022 as part of Lotte’s efforts to establish a metaverse business, this move signals a possible trend among South Korean businesses adapting to the current market conditions.
As a crypto investor, I’ve noticed that Lotte’s NFT Shop sets itself apart from other platforms by adopting Korean won (KRW) as its currency for transactions. This move is intended to cater to non-crypto users and make the platform more accessible to a wider audience. Moreover, the company has introduced its own Bellygom NFT character and collaborated with virtual influencer Lucy and the horror movie “The Witch: Part 2” to broaden its selection of NFT offerings.
After closing down its NFT marketplace, Lotte Home Shopping will no longer be involved in the NFT sector. The digital assets of the company, such as Bellygom NFT, will instead be handled by Daehong Communications moving forward. (Source: Local news report)
As a researcher in this field, I would recommend simplifying the NFT business process by shutting down our in-house NFT marketplace. Instead, Daehong Communications will serve as the central hub for all our NFT projects, overseeing their operations.
Decline in NFT Trading Volume Prompts Strategic Shift
Lotte isn’t the sole significant South Korean retailer retreating from its NFT (Non-Fungible Token) plans. Hyundai Department Store has terminated its H.NFT electronic wallet service, which previously granted customers discounts and rewards. Similarly, Shinsegae, another major South Korean retail chain, has scaled back the incentives tied to its NFT-driven loyalty program.
Major corporations are ceasing their involvement in the NFT sector due to significantly decreased trading activity. Data from Dune Analytics reveals that monthly NFT trading on OpenSea, a leading marketplace, has dropped dramatically, falling from a high of $3.6 billion in February 2022 to merely $41 million in the previous month, representing a staggering 99% decrease. Furthermore, according to NonFungible.com’s market tracker, NFT sales volume plummeted from 18,939 in January 2023 to only 1,796 by December 2023.
With decreasing sales volumes, industries are shifting their focus towards reinforcing their primary business sectors instead of allocating resources to NFT projects that have not gained significant momentum. The departure of notable market participants in South Korea’s NFT industry is a hindrance, as this sector had experienced a surge of interest from major brands only a short time ago.
Cautious Optimism amid a Cooling NFT Market
With the buzz surrounding NFTs lessening and trading volumes dwindling, South Korean merchants are sensibly reevaluating their strategies and shifting resources accordingly. Although the market noise subsides and asset values decrease, some NFT owners remain hopeful regarding the potential expansion of digital possessions.
Based on FastCompany’s study, some NFT owners, such as Jacob Jackson, a tech writer, remain optimistic about the rising trend of NFTs. Despite not seeing price increases in all of his acquired digital assets, he has no plans to sell yet. The market is currently calm, but with new buyers entering the field, there’s a possibility that older NFTs could eventually generate profits.
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2024-06-13 14:12