Why Artificial Intelligence (AI) Will Power the Next Generation of NFT Marketplaces

FinanceFeeds Editorial Team

Non-fungible tokens (NFTs) were the most discussed crypto assets in 2021, taking the ‘word of the year’ according to Collins dictionary.

This rising cryptocurrency niche recorded over $23 billion in trading volumes as per the latest DappRadar report. Currently, NFT-related active wallets account for close to 50% of the total crypto industry usage, a statistic that will likely increase given the continued interest in 2022. 

Before jumping into the developments and prospects, it is worth understanding why NFTs are gaining traction across the board. Well, there are many factors behind the sudden surge but the most significant one is the indistinguishable nature of NFTs. Each NFT token has a unique value, making them a suitable on-chain asset to represent digital collectibles such as in-game items or off-chain assets like property and tokenized stocks. 

While most of the early NFT innovations were on Ethereum, the trend has caught on with decentralized exchanges such as Binance and Crypto.com, both of which launched NFT marketplaces last year. Today, an artist can leverage any of these exchanges to create their own NFTs and trade them on the featured marketplace. So far, Binance has supported the creation and listing of over 2 million NFTs while Crypto.com touts over 220 NFT drops. 

Integrating NFTs with Artificial Intelligence (AI)

Going by the rate at which NFTs ballooned in 2021, it is no secret that this market still has a lot of upside potential. Developers in the emerging tech field are now working to integrate blockchain technology with Artificial Intelligence (AI), a move that will improve the efficiency of smart contracts used to create NFTs. 

AI leverages computer systems to replicate human intelligence. The concept, which borrows heavily from Alan Turing’s seminal work ‘Computing and Machinery Intelligence’, has found a place in modern-day products, including self-driving cars (Tesla), recommendation systems (Amazon & YouTube) and speech recognition (Siri). 

With blockchain and cryptocurrencies emerging as the future of finance, AI is yet again a fundamental tech in improving the underlying infrastructure. At the core, blockchain ecosystems are designed to operate on-chain, leaving a huge gap in access to off-chain data or advanced technologies such as AI. 

Luckily, this issue is being addressed by decentralized oracle API providers like Oraichain. This platform is designed to bridge NFT smart contracts with external APIs, featuring a marketplace where developers can access and integrate the best API services. The Oraichain ecosystem also features an NFT generation platform dubbed aiRight. 

Unlike the existing NFT marketplaces, aiRight uses artificial intelligence to enhance its capabilities. Creatives who leverage this platform can automatically generate NFTs, alongside copyrights on the aiRight database. The AI functionality can also be used to verify the authenticity of listed NFTs, tracking user behaviour to avoid potential attacks by fraudulent bots. 

In addition to the aiRight NFT marketplace, Oraichain features a supporting decentralized data hub. The project recently launched an Annotator Qualification Campaign, enabling whitelisted annotators to earn ecosystem rewards for data labelling (label-to-earn).  

Though most of these integrations are in the early stages, the combination of smart contracts with AI will be a game-changer in the NFT ecosystem. Stakeholders will not only be able to mint and sell digital collectables but integrate complex algorithms such as machine learning to improve the current state of the NFT marketplace. 

The Holy Grail of Crypto Adoption 

Cryptocurrencies, in general, have been around since 2009; however, it is not until recently that the space started to attract people from other industries. NFTs are the digital assets behind this spike in adoption, a sentiment shared by Dallas Mavericks owner Mark Cuban. Speaking at the recently concluded North American Bitcoin Conference, the billionaire told Miami Mayor Francis Suarez that NFTs are what got him fully immersed into the crypto ecosystem, 

“I always paid attention to bitcoin, the pricing, the tokens and the [crypto]currencies, But what really got me into it was, about a year ago, when I minted my first NFT.”

Even big brands like Adidas have joined the crypto industry, thanks to the NFT hype. The multinational sportswear manufacturer bought a virtual parcel of land on the Sandbox metaverse, not to mention their collaboration with NFT projects such as Punk Comics and the Bored Ape Yacht Club. 

With AI integrations now in the picture, the NFT market is set to open up new opportunities for users in decentralized markets. The integration will likely trigger a shift from the proof of concept NFT innovations to more intelligent and user-friendly blockchain-oriented solutions. 

“NFTs, while they’re hot right now and everybody is talking about them, they’re really more just a proof of concept for what you can do with smart contracts and decentralization,” – Mark Cuban.

Read this next

Executive Moves

Avelacom appoints Timothy Wong to run new Hong Kong office toward APAC expansion

Avelacom helps to achieve sub-millisecond speed of market data and order execution across both derivatives exchanges and crypto markets.

Executive Moves

XS.com hires Ahmed Negm, a popular market analyst on CNBC, Sky News, Bloomberg’s Asharq

“Ahmed’s expertise and passion for understanding the intricacies of the financial markets will be invaluable as we continue to grow our client base and expand into new jurisdictions.”

Institutional FX

ATFX uses blockchain to help clients verify IBs and vice versa

ATFX said it has been working on the IB verification project for a few months.

Industry News

Research market in dire straits as SEC’s ‘no-action’ letter on MiFID II lapses in June – survey

“Of all the regulatory news that has hit the research market in the last few months, this is the one change that will fundamentally impact what fund managers can access and pay for in future.”

Executive Moves

Wombat appoints ex-abrdn Richard Charnock as UK platform turns to Europe

Launched in 2019, Wombat provides a dedicated mobile investing platform – available on both iOS and Android – offering users both range and choice.

Institutional FX

Broadridge integrates Point Focal’s pre and post-market reports

“Point Focal provides a unique lens on the market which will help add alpha to the trading process and these new insights will rapidly improve performance while mitigating execution risk and simplify trading.”

Technology

XCritical integrates with Brokeree Solutions, allowing its clients to launch copy trading 

The forex software provider – XCritical, has integrated Social Trading by Brokeree Solutions into their CRM system.

Industry News

HKEX partners with Saudi exchange for cross listings, ESG, Fintech

“The Kingdom of Saudi Arabia, and the broader Middle Eastern region, are one of the world’s most dynamic and exciting economic and innovation hubs and also home to some of the fastest growing investor groups in the world. Hong Kong and HKEX’s markets offer significant opportunities for international investors and corporates, including unrivalled connectivity to the Mainland Chinese markets through our unique Connect programmes. This agreement signals the beginning of even greater collaboration between our companies and our home markets, and we look forward to exploring many future areas of cooperation.”

Executive Moves

CMC Markets Connect relocates APAC team led by Peter Foster to Singapore

“Singapore is a vibrant city and is now undoubtedly seen as Asia’s leading financial hub. The decision to bolster the CMC Markets Connect team here will help us cement the company’s position as a leading provider of multi asset liquidity and comprehensive trading solutions across the region.”

<