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A recent white paper from global payments giant Visa says the company’s entry into the NFT market was driven by an evaluation of its underlying technology and its ability to serve as a “promising medium for fan engagement.
The white paper, published Aug. 23, describes non-homogenized tokens as an important innovation during the New Coronavirus pandemic, when strict shelter-in-place orders restricted live sports, entertainment and music festivals. Meanwhile, the NFT is emerging at a time when fans are eager to join digital communities centered around their favorite artists or sports teams.
Professional sports have been particularly hard hit by the epidemic, with major leagues worldwide losing an estimated $18 billion in revenue, which Visa says has further driven “the need to diversify revenue and focus on technology to reposition the business, find growth opportunities, and capture the attention of fans.”
In that sense, the report says, “NFT attracts collectors, fans, teams, leagues and talent.” In particular, NFT can be a major source of fan stickiness, customer relationship management and new revenue streams. Key NFT use cases are collectibles, art and gaming.
The whitepaper was accompanied by a statement from Visa in which the company announced it had purchased its first NFT, CryptoPunk 7610, for $150,000. cryptoPunks is a collection of 10,000 unique NFTs with proof of ownership stored on the ethereum network. According to industry sources, a total of 2,519 CryptoPunk collectibles were sold in the last 30 days, netting $467.4 million in revenue. The highest-grossing sale during this period was CryptoPunk 7252, which sold for 1,600 ETH ($4.5 million).
In addition to the CryptoPunk craze, NFT is also growing in popularity in other niches, and Cointelegraph recently reported that in August alone, total NFT sales may have exceeded $900 million, setting a new record for the industry. The previous high was set in May, when NFT grossed $255 million in sales. May is when the cryptocurrency market reached an all-time high, and then went through a few months of correction.
Considering Visa’s growing focus on digital assets, the payments company’s move into NFT is not surprising. The company recently reached an agreement with digital asset platform Zipmex to offer further crypto payments integration in the Asia-Pacific region. In January, Visa reiterated its commitment to establish cryptocurrency payments and fiat channels to support the digital asset class.
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