Can NFTs’ potential be maximised through interoperability facilities
Interoperability with regard to digital assets seems to be important for different platforms to work together. In terms of non-fungible tokens (NFTs), interoperability can help conduct inter NFT-based transactions, with increased flexibility and versatility. “I believe interoperability refers to sharing and trading of NFTs across blockchains. These blockchains have evolved in terms of scalability and functionality,” Saravanan Jaichandaran, co-founder and chief data scientist, bitsCrunch, a blockchain analytics firm, told FE Blockchain.
From what it’s understood, NFT interoperability can help increase liquidity through trading done on different platforms. According to artlabs, an artificial intelligence (AI) company, NFT interoperability can help buyers and sellers associate without hindrances, along with access to a wide range of NFTs. The company also mentioned that access to NFTs can enhance through cross-platform interoperability, along with utilisation of three-dimensional (3D) assets for various virtual platforms.
“I think the advantage is that NFTs, once purchased, can initiate people into Web3.0 ecosystems. This would mean that entry barriers, from both business and user perspectives, are lowered. It would also encourage people to get into NFTs, as one purchase can open gates to advantages and utilities,” Ramkumar Subramaniam, co-founder and CEO, Guardianlink, an NFT marketplace, highlighted.
Market experts suggest that the gaming industry can gain maximum benefits from NFT interoperability. As stated by Medium, an online publishing platform, interoperability in NFT games permits NFT channelling between different platforms, irrespective of the blockchain involved. Furthermore, the platform stated that NFT interoperability in gaming can be achieved through open standards and protocols. Benefits that can be attained through interoperability in NFT gaming are development of gaming prospects using blockchains, more adoption of gaming networks, and interactions between gamers and investors irrespective of the platform. For instance, Ethereum’s ERC-721 standard allows NFT interoperability to enable game developers to create applications for backing these tokens.
MarketsandMarkets, a market research firm, show that global blockchain interoperability market will clock one billion dollars by 2028, at a 27.2% compound annual growth rate (CAGR). Data by Mordor Intelligence, a market intelligence firm, stated that global NFT gaming market will reach $21.61 billion by 2028, at a 33.5% CAGR. The firm emphasised on how NFTs are being a benefactor for blockchain-based gaming, as the tokens can ensure interoperability, player ownership and immutability. Reportedly, gaming platforms such as Fortnite, Minecraft, Decentraland, among others, enable NFT interoperability for transactions around digital identity properties. It’s believed that Yuga Labs, a blockchain company, has started to explore metaverse experiences around Bored Ape Yacht Club (BAYC) NFTs.
“The future of NFT interoperability looks promising and likely to play a role in adoption of NFTs. As blockchain evolves and tokenisation of real world assets picks up speed, developers aim to be working on cross-chain functionality. The interest from industries should drive innovation and creation of standards for NFT interoperability,” Rajagopal Menon, vice-president, WazirX, a cryptocurrency exchange, concluded.
