The Present and Future of NFTs in Latin America

One of the cryptoassets with the greatest boom during the last two years is the so-called NFT (an acronym for “Non-Fungible Token” or “Non-fungible Voucher,” a type of encrypted digital asset or even the digital certification of a physical part), which have become a market that has attracted equally video game and application developers, graphic artists, musicians, and even investors, to such a level that in the first five months of the year 2022, they invested more than 37 billion dollars in the NFT market, becoming for some an attractive source of income and for others a business opportunity. But how is the NFTs market managed in Latin America?

According to the “Web3 Report” of the portal Chainalysis, Latin America has participated in just over 10% of all NFTs transactions, attracting, as it was mentioned, graphic and musical artists to this market, in addition to people who, without having an established knowledge about cryptocurrencies are interested in art and entertainment. Another growth factor in the transactions of NFTs is presented in the video games play-to-earn (play-to-own), in which, depending on the performance (or investment) of the player, he can obtain items that have a “blockchain” inserted that turns them into an NFT, which of course would involve an economic benefit for the player in the case he wants to “sell” it.

The way NFTs entered the Latin American market differs substantially from other countries: while in the other markets (such as the USA or Europe) its introduction was through speculative projects such as Bored Ape Yatch Club or CryptoPunks, in Latin America, it emerged as a tool of support for local artists or non-profit organizations, so the “commercial” vision of these non-fungible tokens responds to different ideas.

From this premise, startups were created, digital ventures that, taking advantage of the possibilities offered by NFTs support artists for the commercialization of pieces, ranging from traditional or digital artwork to original songs with the possibility of including “meet and greet” events, original cards, or rights to remix those songs that are included in the NFT blockchain.

Among the main virtual platforms for trading NFTs in Latin America is enigma.art portal, a platform founded in 2021 by brothers Facundo and Manuel Migoya, it currently has more than 5,000 users and some 1,500 connected e-wallets; TravelX, a marketplace for tokenized travel products (called NFTickets as they correspond to airline tickets from an Argentine airline); Carnaval. art, the so-called “first NFT art platform in Ibero-America” that uses the Bitcoin blockchain as a smart contract, unlike other NFTS that use the Ethereum blockchain; and Capitalika, a cryptocurrency platform that has developed a “green marketplace” for NFTs from Colombian and Latin American artists, and who claim that the carbon footprint generated by their process is 99% lower than any other NFT marketplace.

In the case of Venezuela, since mid-2021 it has been positioned between the countries with the most NFT-related searches according to Google Trends, especially driven as a mechanism of economic protection due to the difficulties that the country has been facing. Therefore, in addition to play-to-earn based NFTs, plastic artists such as Oscar Olivares, who partnered with Binance for his collection of NFT works, can be mentioned as the main participants in the non-fungible crypto active market, and Eduardo Sanabria (EDO), a well-known cartoonist, as well as Ron Carúpano, a liquor company with a long tradition in the country and the national government itself, who launched a collection of digital works to commemorate the Bicentennial of the Battle of Carabobo.

Another collection of NFTs generated in Venezuela is “WakaLandia,” made up of 10,000 tokenized digital macaws (called “Wakas”), which combine more than 250 of their own attributes that are applied randomly by an algorithm, in the style of the Bored Ape Yacht Club. This project even considers getting involved in the metaverse, as a “meeting point for Venezuelans who are part of the WakaLandia community,” which somehow involves the evolution of the use of NFTs as simple possessions or digital “commodities” to an “access key” to the “metaverse”.

Another of the elements that are envisioned in the future of NFTs is the participation of large digital platforms, such as Twitter and Instagram, which are testing so that holders of NFTs based on Ethereum, Polygon, Solana and Flow can display them at no cost and later, by associating with digital wallets such as MetaMask, these tokens can be traded without having to leave the social network, applying that concept of “metaverse” that Mark Zuckerberg has promoted from the moment Facebook acquired Instagram and WhatsApp and later grouped them under the Meta brand so that any user of a network can interact in the other networks.

The question that arises, based on these tests carried out in the United States is when these tools will be made available to Latin American NFT creators and holders, which would boost the market for tokenized works made in our continent and it would attract other graphic and music artists who, through ignorance or fear, have not yet joined the non-fungible token metaverse.

There is still a lot to explore in this regard, and the main thing, as in any unexplored area of human knowledge, is to document, prepare and join those who already know about an aspect of the cybereconomy that is growing by leaps and bounds and that, without a doubt, will set the tone sooner rather than later.