Users’ funds are stuck in the FTX exchange amid its liquidity crisis, and they have attempted to withdraw them in a variety of ways. Many users have allegedly resorted to buying NFTs based in the Bahamas to withdraw their balances, despite the bankruptcy laws being bypassed. They have mocked NFTs in the process, painting a bad picture of them.
However, Oscar Franklin Tan, an executive at NFT platform Enjin, believes that this is not a fair summary. According to Cointelegraph, Tan explained that NFTs were not involved and that other items could have been used in the Bahamas hack. “It had nothing to do with NFT technology and more to do with that loophole for Bahamas users,” he stated.
The executive expressed his optimism in the NFT sector despite the FTX effect and the bear market, and he thinks that the space should re-orient itself to how NFTs demonstrate digital ownership, new content creation models and funding. That is to say, he thinks that the space should refocus on these things rather than on FTXs, which is what he thinks the sector should focus on at the moment. He explained:
In order to recover, NFT projects must focus on utility and build their communities more, according to Tan. They must avoid short-term speculation and unrealistic roadmaps in order to have long-term sustainable value.
NFTs with real-world utility are likely to survive, industry players said. Vulcan Forged, a NFT game studio, CEO Jamie Thomson commented that utility-based NFTs will survive, whereas speculation-based NFTs will not. Users will “suffer more” because of frugal hands waiting for a better market, the CEO said.
According to NFT artist Johnathan Schultz, the utility of NFTs is on the decline, which is why we are seeing more projects that have more uses. “That is why we are seeing more projects with a lot more use cases and utility,” he said. He also said that NFTs must overcome the “memeification” of objects in order to survive. Projects that contribute to the space as a whole are particularly important.
Ethernity’s Nick Rose Ntertsas advised Cointelegraph on how to improve the NFT platform of FTX after the company’s implosion. The centralized exchange-based model of FTX’s NFT platform, he said, was closed. He pointed out:
Ntertsas thinks there is no one thing NFT projects should focus on, because different projects will have different objectives. However, he wants to see more projects that challenge the space to “rewrite what is possible with NFTs.”