Challenges and Opportunities in the NFT Market: Reshaping the Web3 Ecosystem

The current NFT market is facing many challenges, but it remains an important bridge for traditional internet users to enter the Web3 world. This article will explore the issues facing the NFT market, its significance, and how to achieve sustainable growth.

The Predicament of the NFT Market

NFTs can generally be divided into two categories: production-type and collective-type. Production-type NFTs (such as GameFi) face the dilemma of growth or extinction, with uncontrolled issuance leading to inflation and value fluctuations. The ecosystem is overly fragmented, with projects being disconnected from each other, making it difficult for users to engage deeply.

Collective NFTs (such as PFPs) form closed small circles due to their scarcity, making it difficult to achieve value spillover. The community size is limited, often with only thousands of participants. At the same time, the brand tone is damaged due to excessive replication, lacking preventive mechanisms and a healthy ecosystem. In addition, the hype supported only by story marketing is difficult to sustain, lacking support from actual application scenarios.

The Importance of NFT

Compared to cryptocurrencies, NFTs have the following advantages:

1. Non-financial characteristics lower the psychological barrier for users.
2. Low liquidity instead increases users' awareness of asset security.
3. Can convert between Token and NFT, enhancing asset liquidity.
4. Various activities can be designed to enhance community engagement and sense of belonging.
5. With unique social and emotional value, showcasing personal characteristics.

The Experience and Insights of StepN

1. The Move-To-Earn model has been validated by the market, demonstrating its potential in the health and fitness sector.

2. An effective anti-cheating system and activation code mechanism are crucial to ensuring the sustainability of user growth.

3. Guiding Web3 users is more challenging than Web2, requiring more education and guidance.

4. The demand for Web3 social interactions is real, and attention should be paid to building a trustworthy social environment.

Strategies for Achieving Sustainable Growth

1. Capture user attention:

   • Value the scarcity of attention
   • Timely communication of key information
   • Provide a zero-investment incentive mechanism
   • Simplify user experience

2. The potential of socializing with acquaintances:

   • Leveraging the depth and trust of familiar social connections
   • Apply the six degrees theory to expand influence
   • Introduce a leasing system to promote interaction
   • Focus on real user experience

3. Sustainable Growth Strategy:

   • Control the speed of user growth and allow time for consensus formation.
   • Extend product lifecycle and reshape economic model
   • Use activation code mechanism to ensure stable growth
   • Improve mechanisms to control inflation

Strategies to Address Stagnant Growth

1. Understand the essence of stagnation in growth, viewing it as a turning point rather than an endpoint.

2. Strategies to Promote User Consumption:

   • Establish internal consensus
   • Collaborate with well-known brands
   • Purchase or collaborate with well-known IP

3. Harnessing the power of social sharing:

   • Design a "show-off" mechanism
   • Develop social media marketing
   • Encourage users to generate content

Through these strategies, NFT projects can seek opportunities in market challenges, reshape the Web3 ecosystem, and achieve sustainable development.