Can intellectual property licensing breathe life into the NFT sector?

There has been a considerable drop off in the NFT business in the last few months and it has led some commentators to question what the future holds for NFTs. There had been much hype about the NFT market with NFT artworks trading hands for significant sums. It seems that the activity has died down with some of the better known artworks dropping to a fifth of their peak price.

 What does this mean for the NFT market?

 It seems likely that the NFT market will have to find its new, post-hype level and that the basis for that could be tying NFTs to more tangible “real-world” experiences and products. While the market for stand alone works of NFT art may have contracted there could still be demand for NFTs that allow access to exclusive events or access to limited edition physical products. 

One interesting business model to look out for is the sale of products based on an NFT where the owner of the NFT gets a royalty for the sale of each of the products by effectively licensing the IP in the NFT to allow the production of the products. The Pudgy Penguins business seems to be making a success of this by licensing the IP in the underlying NFTs for the production of soft toys replicating the NFTs and paying royalties on the soft toys sold to the relevant NFT owner. 

As with all new technology after the initial hype a real market that offers something consumers actually want needs to be found if a sustainable market is to survive post-hype. IP licenses help to achieve this.