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Market

Supernovas leverages the complementary services of NFT marketplaces, Decentralized Social, and eventually DeFi, in a differentiated and unique way with no established precedence.
Supernovas will be exposed to the underlying market trends in each of these surging markets, with competitive pressure from the current vertical-dedicated incumbents and potential emerging direct competitors.

NFT market

The total NFT market boomed in 2021. The market is estimated to have reached ~$25B1 during the year, largely driven by collectibles and art. After the initial massive growth spurt in the summer 2021 and subsequent slowdown, the asset sales have been able to retain traction with a strong start to 2022 with the marketing seemingly gathering further momentum going forward.
NFT marketplace volume LTM
In 2021, the massive growth of the market can be attributed to a few major factors:
These factors have led to vastly growing adoption from market participants, with active traders reaching two million2, in addition to increased adoption by traditional financial institutions.

Decentralized Social Media

The revolution of Web2 in the past decade has brought social media in the mainframe of all social transactions. Platforms like Facebook, Twitter, YouTube and TikTok have become an integral part of billions of people's lives and provide users the opportunities to create content, interact and contribute regardless of background or position. However, the awareness of Web2 social media flaws (e.g. reliability, social bubbles, security, centralization) is swiftly increasing, resulting in decaying sentiment with prospective users (e.g. three in four adults in the US think Facebook is making society worse3). The lack of trust has led a growing share of the population to seek alternative platforms providing more security, decentralization and content ownership, leading to the first wave of Web3 decentralized Social Media.
Ethereum and ERC-721 standard have been the dominant chain for NFT trading activity and main catalyst for NFT liquidity, despite some implicit flaws (e.g. high transaction fees, slow blocktimes, costly on-chain storage). New blockchain protocols, most notably Solana, have been catching on the trend and expanding NFT capabilities.
Still, the limitations of these general-purpose blockchains pose a significant burden on NFT and Social Media markets, increasing friction for mainstream adoption and making transactions cumbersome and expensive. The high and unpredictable transaction and storage costs with technologies like Ethereum, have made interactions and engagements required on a functional social platform virtually impossible. At the same time, the concentration of knowledge and capabilities on these technologies, e.g. smart contracts, have kept the benefits of blockchain in the hands of a few.

What to expect in 2022?

2021 will be remembered as the year of the NFT boom. However, multiple ongoing trends and developments indicate that we have only seen a glimpse of the potential decentralization and NFTs will offer. Despite the recent volatility of cryptomarkets, the NFT market seems to be going strong with NFT volumes and daily users growing steadily, while new decentralized social media platforms start to emerge, as the traditional platforms face increasing societal pressure.
In 2022, it’s imminent that new NFT projects and use cases will capture more attention and normalize NFTs as part of the mainstream culture. Simultaneously, the decentralized Social Media is battling to break the adoption barriers with more scalable on-chain solution and lower costs. We can expect several new trends to pick up this year to drive growth for both:
  • Large brands and artists will lure mainstream into Web3 with their NFT projects
  • New types of NFTs (e.g. music, literature, photography, and virtual real estate/3D galleries) will be introduced to the market beyond pure visual art
  • DAOs will continue to become the cornerstone of next generation digital infrastructure and the future of blockchain technologies
  • Layer 1 & 2 specialization will allow new purpose-built blockchains (e.g. DeSo) emerge to bring competition for the current market leaders offering lower gas fees, monetization opportunities and multi-chain integrations
  • Technological innovations, such as NFT fragmentation
  • Expansion of existing use cases from quickly growing NFT Gaming and Ticketing to Digital Twin NFTs for physical goods
  • Increased education, societal pressure, and demand for decentralization will drive further adoption for decentralized communities and interactions