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Art 3.0: How Phygital NFTs evolve the NFT & Art world ​

Updated: Jan 29

We are happy to share transcript of our speech at the NFT Show Europe.

Good afternoon Ladies & Gentlements, this is a pre-boarding announcement for your flight to Art 3.0.

My name is Bogdan.

I am the co-founder and marketing manager of and I will be your pilot today on our trip into the NFT x Art 3.0.

Let’s start!

Firstly I would like to describe the current situation with the NFT market. Statistics and charts show us that the last 2 years, half of 2022 and 2023 years, were pretty hard for the NFT. Weekly trades volume dropped from 600k trades per week to 200k trades per week. Also the important info from the first chart covers under the orange candles.

In October of 2022 new NFT marketplace Blur was opened for public trades. Most of the NFT traders tried to sell, swap or buy NFTs there. And this is where pitfalls come. You can be sure that the volume of trades in Blur is not the clear volume of trades over the whole NFT market because traders usually buy NFT at the Blur by bids and sell it on the OpenSea. It means that we can easily divide the whole of the trades for the last 8 months into half.

Second chart demonstrates us the volume of sales and buys of NFTs for the last 2 years. We also clearly see the decrease of volume from 1b to 250m.

But 2 aspects to know here is that (First) volume depends on the coins price as well and average coins price for 2022 was around 50–70%. The second aspect is the overall interest of the audience from the bull market. An average user left the market and super hype dropped as well.

And for the hype of NFT I would like to demonstrate to you something special.

Here is the Gartner Hype cycle. Gartner is an US research and consulting company which is mostly famous among IT professionals for their research on new trends and new technologies.

Chart is easy to understand and it shows how the NFTs feel on the market as new technology. Research was released in August 2022 and on the date NFTs were passed though the peak of inflated expectations. And NFTs need 2–5 years to reach the Plateau of productivity.

Plateau of productivity is the last point to reach the hype cycle and it’s the point where users truly understand the technology strengths and weaknesses.

For example web 3.0 technology just gained the peak of Inflated expectation, when metaverse not even reached the hype and still stays on innovation trigger.

We can understand that NFT technology will be actual for the next 5 years and will grow and develop at high speed during this time.

But NFTs cannot be reviewed apart from the crypto market.

Crypto market was extremely volatile over last year. The bitcoin market cap dropped for more than 50% and average price decrease for altcoins were at the 70–80% rate. Here is the rainbow chart which is commonly used by crypto traders and crypto enthusiasts over the market.

It demonstrates the stage of the bitcoin price right now.

During price tops the rainbow chart signalized that it was the top and showed that the bubble effect reached the space.

But now, in 2023 we clearly see that bitcoin price is located on the accumulated price stage and current price is the best time to buy and hold. Of course this is not financial advice.

If bitcoin stays in accumulation phase, other assets and technologies at the market have already reached the bottom. And NFTs should be at the bottom of the market as well. So we need to keep this info in our minds.

I used the NFT market word a lot of times already, but what does it consist of and what are the ways we see to improve the current market situation?

When we talk about NFTs and its categories we usually highlight 10 main categories of the NFT market.

It comes with Sport NFTs and most of the web2 sport companies have already presented their NFT collections.

Also all of you have heard about Metaverse NFT collections.

Musicians had presented several NFT albums and songs.

Collectibles are the most known NFT type — pfps.

Gaming is also industry which have been presented at the NFT market already,

Passes became famous last months.

And Utility NFT collections are the most hyped type of the collections.

Of course Art also joined the space and even top auctions held sales and events related to the hyped NFT pieces.

And here, wants to represent a new type of NFTs — phygital.

Phygital NFTs have not been invented or brought to the market by us. But we want to make it as famous as possible, because we see phygital NFTs as our savior.

What is Phygital? The word comes from combining physical and digital words. It means something that has been started in physical and later it was transferred to the digital. Also it can be used to describe anything physical that has its digital twin.

Why do we need to transfer physical to digital? And what actually can be transferred?

I ask you to imagine a perfume. The good smell of great perfume you have recently bought and used it for the first time. Right, here it comes. Unfortunately, modern technologies can’t offer you a device to feel the smell of an item.

Now, I want you to imagine the taste of freshly made Pizza. A piece of classic pizza dough, perfectly baked, with a huge amount of tomato paste and your preferred ingredients. Such as mozzarella cheese, salami and tomatoes. Yes, again. Modern technologies cannot accept your wish and it’s not possible to feel the taste in digital.

What if I ask you to touch your pet in the digital world? Metaverse or AR? Impossible. Technologies are not there yet.

And this is the reason why we need to invent phygital everywhere.

You can buy pizza or perfume as an NFT. You can even approve your ownership by NFTs, but feel the senses only by physical goods.

Should I tell you any actual examples of Phygital NFTs?

I think, yes.

Let me introduce you to 4 recently minted examples of phygital NFTs.

The First box — we see the latest collaboration of Puma and Gutter Malo. It is Physical sneakers (shoes) with the ability to buy it on OpenSea with an NFT certificate. As simple as it is possible. You just buy an NFT with a certain size of shoes and later you change your NFT for physical pieces.

Second box — Physical Collectibles by Invisible Friends. I believe everyone in the NFT space has heard about the Invisible friends NFT collection. It was famous last year and had tons of sales on the 2nd market. In June they presented their first Phygital collection on OpenSea drops. You could buy an NFT and get a physical toy later.

Third box is a best example of how tickets can work better digitally. NFT show NY have presented their tickets in the form of NFT. Everyone could buy an NFT ticket and get access to the event. You don’t have to fill up any additional docs, just your wallet and NFT ownership.

The last one is the PASS of

We have several utilities and usability for it. This is the way we brought fine art to the NFT space and combined them with digital certificates.

But what are the future and possibilities of the Phygital market?

Phygital market itself has the opportunity to grow up to 200tn$ in total value. As you can see on the left chart, the physical market has a size of 84tn$ in total, the digital market almost 10 times less, but still 9tn$.

When the market will be combined we will have the opportunity to feel the full power of phygital in numbers. Forecast is based on other markets historical growth and personal opportunities of the Phygital market.

On the right chart we can evaluate how web2 giants joined web3 during the last 2 years.

On the first place by revenue we see Nike. They gained 186m$ in revenue during 2022. D&G, Tiffany, Adidas and Gucci gained over 50m$ in revenue during last year.

It means that web2 companies are working to build something in web3.

But the most important is that companies are working in web3 to get ready for the future and join the party before others do.

And since we passed half of today’s presentation, I would be happy to share our thoughts on the art related side. On the slide you see 7 artworks, all of them are made by our artists. By artists of the 10k collection.

All of them are available in the 10k NFT collection and they have physical twins.

It shows what we build and how we see the future of art in the NFT space.

In addition, these artworks are good examples of Phygital from our perspective. All of them presented in physical pieces and all of them have its digital twin which plays a role of certificate.

But how NFT market and technology can help art world and art market? Pretty simple, let’s have a look.

These 2 charts demonstrate all the info you need to know before you make a research on art world and NFT world potentiality.

On the left chart we see annual evolution of global contemporary art turnover.

In simple words is the total volume of art sales during last 20 year. And the top red lines on the 2 last candles is the volume of NFT art sales. It means that we have 3$ billion of turnover per last 2 years and only 100$mln of them are made with NFT.

And the most interesting question here is that NFT technology have potential to cover all the volume of art sales? Why? Because NFTs don’t play against art, they play on the same field and support the sales by giving it transparency.

NFT sales by types chart are also important one. This chart demonstrates what types of NFTs have been sold during last 2 years. What do we see?

Art took only 11% of market, while PFPs NFT (Collectible) took over 50% of market.

Would it change in the future? No, because changes already came to the market. PFPs collectible are loosing market sharing and volume, while art sales are growing.

And each market player should understand the benefits and opportunities of the NFT technology.

When we talk about opportunities of the NFT for art market first we know is The origin of artwork thesis.

Yes, this is important and it has a space to grow and develop.

But what does it mean to have a original artwork or certificate for the artwork?

Let’s evaluate benefits by looking at the historical evidences.

Vincent van Gogh is famous for his expensive masterpieces, some of them were sold for more than 30–50$mln, but the interesting part is that for last 50 years, a lot of forgeries were sold under van Gogh name. The most expensive were sold in 1987 with price $35mln

NFTs can prove the origin of art piece by keeps information about creator and all movement of art.

Transparency is also the way to support art sale. NFTs keep all the information about object and everyone can see it. Blockchain is the power.

Royalties were reinvented with the NFT technology. Each creator can easily set up royalty size and royalty reason. It helps to get fair payments after each resale. For example, Rembrandt were known and famous during his lifetime. He sold a lot of masterpieces during working period, but when he passed away, members of his family couldn’t get any payments and money from arts which Rembrand created or sold. That’s why we need royalties.

Market access comes to those who are ready to use full power of NFT market. Artists and creators nowadays can easily sell art pieces to the collectors from other side of the world. And they don’t even need any collection houses or galleries to do so. NFTs and blockchain open a world market for everyone from everywhere.

All of these benefits are easily understandable for artists and I am happy to tell you 4 grand benefits of NFTs for collectors.

ach collector can easily transfer his NFT (artwork behind it) by just using blockchain. All ownership rights and other rights will be transferred as well at the moment of sale. Buyer and seller shouldn’t know each other to make a deal, smart contract is the best helper for deal in the NFT space.

Artworks can be fractionalized by using blockchain and NFTs. Why do we need this? It gives an unique opportunity for collectors to join art world by sharing art pieces as stocks of companies. This is a new era of art collecting.

Greater demand is more or less benefit for both sides of art market. Artists can create more cause they will find enough interest from collectors. Collectors can trade art pieces very easy. NFT market works 24/7 and you should not have any special equipment or access to join sales or auction.

While we talk about collectors and artists, i have something special for investors. The next information is most suitable for professionals who are looking for the best investment idea.

The chart you see is the chart of comparing contemporary art investments growth vs S&P 500 growth. Data have been collected from last 20+ years since 1995.

We can understand from the chart, that contemporary art as an investment idea overplay S&P 500 for more than 3x.

This is not Financial advice, but numbers never lie.

This is the check point and final step, where we finally reached our main topic — Art3.0

We believe that ART world and market should growth and change.

Art 3.0 is a new era and perspective of art. Is where we see connection between physical and digital.

Art 3.0 is where artwork can be firstly created in the physical form and later transferred to the digital form.

Art 3.0 is where artwork can be firstly made in the digital form and later transferred to the physical form.

Art 3.0 is where art will be sold only with certificates.

Art 3.0 is where everyone will be able to see full history of art.

Art 3.0 is the new chapter for Art.

As we embark on the exciting journey of Art 3.0 and embrace the innovative concept of Phygital NFTs, we invite you to experience this evolution firsthand. At NFA Space, we offer a curated selection of groundbreaking NFTs that embody the spirit of Art 3.0. For those looking to buy NFT online , our collection house provides a diverse range of digital artworks, each blending the physical and digital realms in unique ways. Whether you're a seasoned collector or new to the world of NFTs, our collection offers something to captivate every artistic taste. Explore and buy NFT online at NFA Space, where art meets the future.

Thank you for reading a transcript of your latest presentation at the NFT show Europe.

Bogdan D.


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