NFT Sports Cards Explained (Read Before Buying)

It seems only yesterday when headlines of sports trading cards selling for millions of dollars spotlighted the lucrative world of collectible cards. 

To recap the highest flying sales:

  1. A 1952 Topps SGC 9.5 Mickey Mantle card sold for $12.6 million
  2. A T206 SGC 2 Honus Wagner sold for $7.25 million
  3. The  LeBron James 2003-04 Rookie Patch Auto sold for $5.2 million. 
  4. Patrick Mahomes 2017 Rookie Auto BGS 8.5 sold for $4.3 million.
  5. Luka Doncic 1:1 Logoman Auto sold for $4.6 million

And the list goes on, often to the incredulity of the average person still digesting the idea that even classical art can fetch multi-million dollar price tags.

Throw NFTs, these intangible digital collectibles, into the mix, and it seems people’s incredulity grows to almost shocked disbelief. 

NFT sports cards were inevitable– attach the high value placed on limited edition collectible cards to a 24/7/365 digital marketplace, and you’ve got a powerful combination. 

The following guide explores the ins and outs of NFT sports cards.

NFT Sports Cards 101: A Quick Summary of NFTs

To best understand how NFT sports cards work, it’s essential to firmly grasp the NFT concept. 

A non-fungible token is a cryptocurrency that is unlike any other– hence its non-fungibility. 

For most practical purposes, one bitcoin will always equal one bitcoin, in the same way, one quarter will always equal one quarter. 

However, let’s say we have two houses with identical floorplans– but one is on the beach, and the other is in a regular suburb. In most markets, the beachfront house might be worth triple or even ten times the amount of its less-breezy twin. 

Similarly, the NFT token standard enables tokens to hold unique characteristics– which are priced accordingly by the market. 

The holder of the NFT owns what is essentially the deed to the digital trading card and can sell it whenever.

In more technical terms, the NFT owner holds the token in a cryptocurrency wallet; their private key is what signals to the blockchain that they are the owner of the wallet and its contents, enabling them to trade as they please. 

There are no physical tokens or coins that represent the NFT– it’s all digital, and your private key is what communicates your ownership of the NFT. 

Exploring the NFT Sports Card World

Today’s most popular NFT sports card platforms are essentially the issuers of a specific collection.

For example, NBA Top Shot is the officially licensed platform of NBA collectibles. NBA Top Shot project took the cryptocurrency world by storm when Dapper Labs launched it in October 2020, introducing many of its crypto-savvy collectors to the future of NFTs. 

Dapper Labs is also known for its viral CryptoKitties project in 2017, seeing several CryptoKitties reach six-figure sales. 

In addition to NBA Top Shot, Dapper Labs also has NFL All Day and UFC Strike. 

In just a few short months, NBA Top Shot attracted over $123 million in sales. In 2022, NBA Top Shot Labs reached over $1.03 billion in secondary market trades. 

Dapper Labs takes a 5% royalty fee on secondary NFT sales of its marketplace; so, in theory, Dapper Labs made about $50,000,000 from its users trading its NFTs with each other. 

In contrast to physical sports cards, NFT sports cards are able to include additional rarity features; NBA Top Shot uses different tiers like Legendary, Rare, Fandom, and Common.

NBA Top Shot introduced the most polished NFT sports experience in 2020, paving the road for several new NFT sports card marketplaces today. 

SoRare is a competing NFT marketplace and issuer that initially started with football (of the round ball sort) NFTs, and has expanded to MBA and MLB NFTs. 

However, in addition to purely holding SoRare cards for collection’s sake, collectors can play in twice-weekly global competitions or against friends in private leagues. Using the cards for their collections, players can submit either five-player lineups (for football & NBA) or a seven-player lineup (MLB) in free competitions. 

SoRare players can also earn rewards such as digital player cards, merchandise, match tickets, ETH, or even meeting their star athletes– all based on their squad’s real-life performance– similar to a fantasy league.

NFT Sports Cards: Considerations

Chances are that one top question in your head comes from this line of logic: well, if seemingly anyone can launch an NFT, wouldn’t the market just become supersaturated with NFT sports cards, basically commoditizing the asset class?

Correct. However, this isn’t much different from how real-life companies can start pumping out specific trading cards, provided they have adequate licensing and legal agreements with the organizations.

Similarly, sports organizations tend to sign non-exclusive licensing agreements with NFT platforms– similar to how SoRare and NBA Top Shot are competing companies offering NBA NFTs. However, SoRare offers a gaming aspect, whereas NBA Top Shot seems to be strictly collection-oriented.

We can expect to see more NFT sports card marketplaces and issuers arise with different functionalities. 

Autograph, for example, is a platform that enables famous athletes and celebrities to turn their real-life experiences into NFTs, giving them a direct link to add personal touches to the digital collectibles distributed to fans. 

Rather than a simple static image or . GIF, Autograph NFTs are typically customized high-graphic digital representations, such as interactive posters, digital action figures of iconic game highlights, and more. 

The Autograph team counts a star-studded array of celebrity athlete partners, like Tom Brady, Simone Biles, Tiger Woods, Derek Jeter, Wayne Gretzky, and Tony Hawk. 

However, NFTs come with additional considerations their physical counterparts don’t.

For one, the underlying blockchain adds another distinctive category type. While the bulk of NFT sports cards (in terms of market share, volume, and popularity) are on Ethereum’s blockchain, there are competitors emerging on blockchains like Solana, Polygon, Flow, and even Cardano. 

Final Thoughts: The Future of NFT Sports Cards

Bear or bull market, the underlying value proposition of NFT sports cards remains the same– collect digital assets representing your favorite athletes similar to how you’d collect physical cards. 

With a few billion dollars in primary and secondary volume, NFT sports cards are a smaller yet still dominant representation of NFT’s potential. 

 It’s not a stretch to assume we’re in the early innings of how far NFT sports cards can go; platforms like NBA Top Shot, SoRare, and Autograph have raised and are implementing over a billion dollars of cumulative funding to build their NFT offering

However, potential NFT sports cards holders should be mindful their digital holdings come with more nuanced responsibilities, such as protecting your holdings from hackers (and yourself) with adequate cryptocurrency wallet security and digital hygiene– as well as the underlying risks of the very risky cryptocurrency world.

Disney NFTs Explained

Disney, one of the world’s largest mass media producers, entered the world of non-fungible tokens in 2021 by creating NFT collections from their iconic characters. 

Disney NFTs, which include the company’s intellectual property and acquired franchises such as The Simpson, are showcased on VeVe —a marketplace that licenses and showcases NFTs from some of the most important companies from different industries.

Disney NFT Collections on VeVe

On November 2021, Disney launched their first NFT collection: the “Disney Golden Moments NFTs,” in celebration of Disney Day. The collection, as the name suggests, comprises some of the most popular moments from iconic characters in the company’s history, showcasing Elsa from Frozen, Iron Man, and at the top of the collection is Walt Disney holding hands with Mickey Mouse.

Disney NFTs sold out almost immediately at launch, like most collections from VeVe’s marketplace, considering they are from some of the world’s most important companies in mass media. However, Disney adopted a “Blind box” method on dorp day, requiring buyers to open a box to see their purchase. Most of the NFTs within the collection were priced at $60, with the value of some of these NFTs reaching $2000.

VeVe features three types of rareness for Disney NFTs. As part of the Golden Moments collection, there were 4,333 ultra-rare statues of Walt Disney holding Micky Mouse’s hand, each with a list price of 333 Gems ($333). Each purchase of a Partners Statue grants the customer a twelve-month subscription to Disney+ courtesy of VeVe.

On VeVe, we can find the full catalog of Disney’s NFTs, including collections from Star Wars, Cars, and Toy Story to single NFTs characters from Marvel, Alice in Wonderland, and The Simpsons.

On April 8, 2023, Disney launched the Disneyland Resort Posters collection, which celebrates the original artwork used to create Disneyland resort posters from the early days of the Tomorrowland area.

Source: VeVe

Disney’s Start Wars NFT Collection

The Star Wars NFT collection is one of Disney’s best-selling NFT collections on VeVe. Popular characters like C3PO and R2-D2 were the first to be showcased on the platform. Darth Vader soon followed with three different poses, but one of them is Ultra Rare, and it’s Vader doing an animated Force choke.

Pixar NFTs

Disney acquired Pixar in 2006, and with the Pixar family having some of the world’s most beloved animated characters in history, Disney made sure to add it to its Golden Moments NFT collection on VeVe. Similar to other NFTs, they were priced at $60, with their value skyrocketing 400% on secondary marketplaces.

On March 2022, Disney decided to double down on Pixar characters with the PIXAR PALS series, which comprises collections with over 50,000 NFTs combined that sold out immediately, auctioned in blind boxes at $60 each. 

The PIXAR PALS series generated an estimated $3.3 million in revenue. Wall-E, Sheriff Woody, Edna Mode, and more iconic characters from Pixar were showcased on VeVe as hand-painted digital art.

One of them is the Woody collection “Hey Howdy Hey!” consisting of 13,999 NFTs, priced at $60 with a Common rarity, with Woody rendered as a 3D NFT.

Marvel NFTs

Disney launched its Marvel NFT collection as a comic series released weekly by VeVe, each with their own level of rarity: Common for the original cover and Uncommon for black and white versions of the original comics.

Marvel Premiere #21 featuring Iron Fist

Marvel NFTs aren’t just covers of the original comic books —the comics can be read by browsing the pages on PC or iOS/Android devices.

Disney Mickey Mouse NFT Collection – Mr. Mouse

Naturally, Disney’s appearance in the NFT realm wouldn’t be complete without its long-time mascot, Mickey Mouse. The Mr. Mouse series dropped on December 24th using the Blind box method.

A total of four series were launched, with Series 4 featuring three collections; 

  • Hitchin’ A Ride, 3D animated collectibles comprising 2,940 rare NFTs priced at $60
  • A Close Call, 1,340 ultra-rare NFTs at $60;
  • All Aboard!, 940 secret rare 3D figures with Mickey hoping on a departing train, priced at $60.

Holders of the three series were airdropped a “Mickey’s Signature,” a unique NFT collectible, as a gift. 

How to Buy Disney NFTs

To buy a Disney NFT on VeVe, you first need to sign up and install the VeVe app (if you’re using the mobile version). Thereon, you can only buy/sell NFTs using the platform’s currency, Gems, which equals one US dollar. You can buy Gems using Apple Pay or Google Pay. The fees by the credit card provider, bank, or PayPal apply (and unlike cryptocurrency, you cannot sell Gems off-market.)

Secondary market fees on all Disney sales apply; VeVe charges a 6% licensor fee on top of the existing VeVe 2.5% fee for each secondary sale.

Final Thoughts: Future of Disney NFTs

Disney NFTs were some of the biggest news for the NFT ecosystem in 2021. A company that size attracted even more eyes to a flourishing ecosystem that was already seeing an influx of high-profile companies creating their own digital collections.

The mass media giant remained active for the following years after launching their first collection in 2021, all during Bob Iger’s absence, who worked as its CEO for 15 years. However, with the return of Iger on November 2022, Disney could double down on NFTs and Web3 for 2023. 

On March 2022, Igor joined Genies, an NFT platform on Dapper Lab’s Flow blockchain. He stated that the Web3 market offers “extraordinary” possibilities for Disney. “When you think about all the copyright and trademarks, characters Disney has, and the NFT possibility, they’re extraordinary, said Iger to the Hollywood Reporter.

NFT Royalties Explained: What Are They & How Do They Work

NFT royalties are payments sent to the creator of an NFT each time it is resold on the secondary market. NFT royalties function similarly to traditional royalties. In business, for example, the owner of a product receives a percentage of the sales or profits. 

In the case of NFTs, the creator can set the royalty percentage during the minting of the NFT.

So, while NFT royalties make it possible for an artist to earn recurring revenue on their work (as long as it’s being re-sold in secondary markets), they’ve been a point of dispute for the various parties.

The following guide explores how NFT royalties work and more. 

How Do NFT Royalties Work?

NFT royalties are calculated as a percentage of the sales price specified by the creator. However, this is not a standardized method as each NFT marketplace, like OpenSea and LooksRare, will use different smart contracts to calculate and handle NFT royalties. If the royalty fee calculation ends in a remainder, it can be rounded up or down to 5 or 10 percent. 

Royalties apply to almost any type of NFT, whether physical or digital. These can be in-game items and collectibles from blockchain games, artwork, PFPs, tokenized music albums, videos, etc. 

The underlying smart contract makes sure the process of each secondary sale is carried out accordingly, depending on the platform. After the sale is verified, the smart contract reserves a percentage, delivering it to the creator’s cryptocurrency wallet. The currency of payment is usually the one supported by the platform. For example, OpenSea supports Ethereum and Polygon, an Ethereum sidechain, so the internal economy runs using ETH.

The percentage of the price sale is pre-defined by the creator, typically 5% – 10%, and this is predefined in the minting stage. So, whenever you buy an NFT directly from the person or project who created it, and then you re-sell it, 5% or 10% of that secondary sale goes to the creator. It’s similar to a company’s shares being traded in the stock market after being sold in an Initial Public Offering (IPO).

An NFT will have a royalty percentage fixed. Some people may think that royalties fluctuate with the market; it’s actually the sale price of the NFT that varies through time and therefore causes variations in the amount of profits creators receive. Price fluctuation will depend on multiple factors, most commonly: market demand, scarcity, and utility.

Why Are NFT Royalties Important?

NFT royalties are a way for digital creators to capitalize on the value of their work through secondary sales. No matter who owns the NFT, a smart contract will ensure the creator receives its fair share.

It’s not just about the minting price; NFT royalties are an appealing (and necessary) source of income for creators. Last year, over $1.8 billion worth of royalties were paid out to creators of Ethereum-based NFTs. 

Depending on how well an NFT or a collection is sold, royalties can generate a substantial amount of profits in the long run. In 2021, Beeple, a popular NFT artist, launched an NFT artwork called Crossroads and received around $6.6 million in royalties.

Pros and Cons of Royalties

NFT royalties, while at first glance can be a simple concept, have become a frustrating topic for marketplaces, creators, and buyers; all clashing on how to properly define the sale process so each party benefits somehow. This caused marketplaces and NFT platforms to devise and employ new royalty methods, such as optional creator earnings (explored in the section below).

First, NFT royalties allow artists to generate passive income while their work is being sold in secondary markets. It also gives creators an idea of how much value their NFT is garnering through time. The more popularity it acquires in the market, the creator’s reputation strengthens —most likely. 

In the case of Beeple, for example, “Everydays – The First 5000 Days” became the artist’s most well-known work of art, selling for $69 million. His subsequent work didn’t need much promotion as he already established a name in the community, helping him profit millions in royalties from secondary sales.

The cons of NFT royalties would be the price volatility —digital creators cannot expect a steady stream of income from royalties as NFT prices could (and most likely will) fluctuate in short periods of time.

Also, some NFT traders that want to speculate resales don’t like the idea of paying a fair share to creators. In 2022, some NFT marketplaces like X2Y2 eliminated royalties from their platforms and instead enforced optional royalties, which outraged digital artists and caused a sharp decline in trading volume. 

Optional Royalties

Optional royalties, or optional creator earnings, allow NFT owners to choose whether or not they want to pay creators a percentage each time they sell their NFTs. In 2023, several NFT marketplaces jumped on this trend, like OpenSea and LooksRare.

LooksRare eliminated default royalties and now grants optional royalties. This means buyers can choose to pay royalties at checkout, making NFT trading more profitable. However, the platform distributes 25% of platform fees to creators and collection owners.

Other NFT marketplaces can provide different types of NFT royalty systems. For example, Ditto Music allows fans to acquire shares in songs from their favorite bands and get paid monthly royalties via Bluebox, the company’s blockchain platform. 

Popular NFT Marketplaces Offering Royalties

Not all NFT marketplaces offer NFT royalties. Here’s a quick list of the most popular platforms with the best royalties:

  • OpenSea: the largest NFT marketplace by volume, offers optional royalties with 0.5% as the minimum for the creator.
  • LooksRare: offers optional royalties, while creators will automatically receive 25% of trading fees.
  • Nifty Gateway: enforced royalties; the marketplace takes 5% of the sale price plus 30 cents to cover credit card processing fees.
  • Rarible: enforced royalties; the marketplace takes 1% on the seller side and 1% from the buyer side for service fees.
  • SuperRare: enforced royalties; the marketplace takes 15% of the primary sale. Each secondary sale will distribute 90% of the sale to the collector, and the original artist receives a minimum of 10% as a royalty.

Final Thoughts: The Future of NFT Royalties

NFT royalties have been a fairly contentious topic lately. Marketplaces, artists, and collectors alike have differing opinions when discussing an ideal royalty system that benefits all the parties involved. However, NFT royalties have helped all kinds of artists globally create a better source of revenue for their work. 

In the art world, royalties are a way to protect artists from having their work unjustly sold without giving them a fair share of the profit. In NFT music, for example, royalties play a slightly different role. NFT albums have become a popular way for artists to sell 99.9% of their work to fans while giving them a small percentage as royalty. This not only allows a broader connection between the artist and the fans but also eliminates intermediaries, like music labels, who take a considerable cut of their revenue. 

NFT Real Estate Explained (Read Before Buying)

Non-fungible tokens (NFTs) have been used to disrupt several industries, starting with the art market and diversifying into music, communities, and real estate. 

While these rapidly changing markets have been easier to disrupt, real estate could pose a much more significant challenge being a slower market, taking an average of 8 weeks per sale compared to art, which typically takes no longer than a wire transfer. 

This article will look at how NFT real estate works, reasons to use NFTs in the real estate market, the top two NFT real estate projects, challenges real estate NFTs could face, and their future in the market. 

How Do Real Estate NFTs Work?

Real estate NFTs are similar to traditional NFTs; they can be purchased on cryptocurrency marketplaces such as OpenSea and  SolSea using Ethereum, Solana, or the cryptocurrency chosen by the seller. Each NFT is then held in a cryptocurrency wallet

Real estate NFTs can be used to generate a passive income by representing equity in a real-estate project. They can cover everything from property ownership to a share, in which the NFT holder will be paid much like a traditional dividend. For example, if the NFT owner represents a 15% share in a real estate project, the holder will earn 15% of the net profit. 

Due to their tokenized nature, most real estate NFTs can be sold at any time, provided there is a marketplace with sufficient liquidity for the asset. However, some real estate investments will require the owner to hold for an agreed period, which will be made clear before a purchase is made. 

Why Use Real Estate NFTs?

With NFTs still being a new technology, how practical are they compared to a system that’s been in place for decades? 

Being immutable, NFTs show absolute proof of ownership, improve credibility, and are fully transparent, without many of the complexities of the traditional real estate system, such as surveying and complex contracts. Here are two benefits that NFTs bring to real estate. 

NFTs can dramatically decrease the volume of paperwork required to purchase a property. Current real estate investments require copious amounts of paperwork as part of the ownership transfer, which can be overwhelming for all parties involved. 

Real estate NFTs help streamline this process, as much of the back-office paperwork can be automated with the NFT’s underlying smart contract. This, in theory, allows buyers and sellers to transfer ownership in a matter of minutes (after legal counsel has been consulted). 

Top NFT Real Estate Projects

Origin Story 

Origin Story has partnered with the real estate investment group Roofstock to bring real-world real estate properties to the NFT marketplace. Roofstock believes that this deal will help cut sellers’ fees by 50%, dramatically improving the profitability of selling property. 

Roofstock also believes that on-chain real estate transfers could increase transaction speeds, streamlining the buying process. Since 2015, Roofstock has facilitated over $5 billion in investment transactions and plans to implement NFT real estate investments in 2023. 

The Sandbox

The Sandbox is one of the largest Ethereum-based Metaverses in the DeFi market. Showcasing an entire world to explore, The Sandbox offers unique play-to-earn virtual reality gameplay in which players can buy land plots, buy and sell in-game assets, and complete tasks for rewards. 

The Sandbox first rose to fame in 2021, when it was endorsed by Deadmau5, Snoop Dogg, and Atari, all of which own land plots within the digital world. Land plots are valued based on the area they’re in, with land close to celebrities having a higher value. For example, the three plots around the Snoop Dogg Mansion sold for $1.23m, with one selling for $453,000. 

LoanSnap

LoanSnap launched the first seven mortgage NFTs in November 2021 in the form of home equity loans. These NFTs work like traditional mortgages, replacing mortgage notes with NFTs. 

The location and size of the NFT mortgages were not disclosed and have not yet been available to the general public or crypto investors. However, LoanSnap also plans to issue a stablecoin called bHome. bHome will represent fractional ownership in the NFT mortgage notes, which would allow investors to own a percentage of the mortgage. 

Challenges for NFTs in Real Estate

Much like any other new technology, real estate NFTs don’t come without their drawbacks. Firstly, only 12% of Americans understand the concept of NFTs, creating an educational divide. Although NFTs offer a wide array of benefits, the underlying technology could be too complex for everyday real estate workers and home buyers to fully utilize without the risk of hacks and scams, which have been used to steal $100m since July 2021.  

Secondly, regulation could make real estate NFTs more complex than first thought. The U.S. Securities and Exchange Commission (SEC) has ramped up its investigation into NFTs, stating that NFTs are being used to raise money, like traditional securities, rather than being sold as art. 

Real estate NFTs would undergo a Howey test before they’re accepted into the mainstream real estate market. Should they be considered a security, they will have to be registered with the Securities Exchange Act of 1934, file regular reports, and comply with Rule 505 of Regulation D.

Final Thoughts: Do NFTs Have A Place In The Future Of Real Estate?

In the future, real estate NFTs could be used to streamline both residential and commercial real estate transaction processes, and open the asset class to an international decentralized community of buyers and sellers.  

As the real estate market is already heavily regulated, current laws covering privacy and data protection will likely make it difficult to buy and sell real estate properties as NFTs. Property laws in the real estate’s location could also add additional complexity to the deal, with different states and countries having different rules regarding real estate ownership.  

That being said, real estate NFTs may begin to slowly influence the real world market, allowing individuals to hold mortgage debt, support new building projects and take part in group investments instead of outright buying and selling a whole property.

NFTs & Climate Change: How Do NFTs Impact the Environment?

In 2022 the market for non-fungible tokens (NFTs)- tokenized images, music, and items, generated $24.7 billion. Just two years before, total sales were just $82.5 million.

This exponential market growth has led to discussions about whether NFTs harm the environment. Activists have expressed concerns about Proof-of-Work (PoW) blockchains like Ethereum, which have been linked to high carbon emissions

However, PoW NFTs don’t cover the entire market. Several NFT projects, such as Oceans and Us, are using blockchain technology to attempt to solve climate change. 

With this in mind, it’s important to consider a balance between environmental sustainability and technological advancements.

How do NFTs affect the environment?

The perception of cryptocurrency’s negative impact on the environment is primarily viewed through Proof-of-Work blockchains like Bitcoin, and specifically for NFTs, Ethereum, which covers 76% of all trading volume. Such networks rely on a process called “coin mining”, which is extremely resource intensive. 

During the coin mining process, computers on a network (also known as miners) race against one another to solve complex problems, with the “winner” receiving the right to confirm a block. Once a block has been confirmed, the miner that has claimed it can collect all gas fees and a reward. 

When the price of a cryptocurrency such as Ether increases, gas fees also rise, and the value of solving a problem is higher. This incentivizes miners to invest more computer power into solving a problem, consequently increasing the amount of power used (and wasted.) It’s estimated that Ethereum miners were using 44.49 TWh per year, or around the equivalent energy of running a house for 2.8 days per transaction. 

These numbers aren’t black and white. NFTs only represent a small portion of transactions on the Ethereum blockchain. Therefore it’s difficult to determine whether they’ve significantly impacted the amount of computer power needed to solve problems. While this doesn’t mean NFTs are carbon neutral, their environmental impact may not be as significant as some numbers make it about to be. 

Additionally, Ethereum has recently moved from a Proof-of-Work model to a Proof-of-Stake (PoS) model, which we’ll cover in greater detail below. 

How Do NFTs’ Impact The Environment Compared to Physical Art

Although NFTs have been in the spotlight for their environmental damage, they may offer an eco-friendly alternative to traditional art. 

Traditional art requires resource-intensive processes, with a return flight from New York to London generating almost 1,000kg of CO2. With every tonne of CO2 released, around three square meters of Arctic ice will melt. 

Physical art also involves extensive production processes, often involving chemicals that can pollute over 10,000 liters of water. These chemicals usually aren’t picked up by treatment plants and can impact the drinking water in cities where a particular piece of art is exhibited. 

The exact numbers for the environmental impact of traditional art are too difficult to calculate, and therefore there are no specific data. That being said, if you look at the creation and distribution of traditional art alone, the carbon footprint is significantly higher than NFTs. 

Let’s consider transport, for example. When an NFT is minted, it can be sent to another individual for a small fee and an even smaller carbon footprint. Compared to this, a physical piece of art would use a cargo truck or aircraft. This doesn’t even include the delivery of materials, which adds even more to the environmental footprint of physical art. 

Proof-of-Stake Is Helping To Reduce NFT-Related Emissions

As mentioned earlier, Ethereum has moved from a Proof-of-Work model to a Proof-of-stake (PoS) model, but what does this mean for NFTs and climate change? 

PoS models use significantly less energy than their PoW counterparts as they don’t require miners to maintain their own mining equipment. With a PoS model, a limited number of powerful nodes run the network validating transactions once they’ve received a certain number of stakes from coin holders.

This prevents the need for large mining operations and lets nodes generate a passive income with staked tokens. Blockchains like Ethereum have now transitioned to a PoS model to reduce carbon emissions, which has made Ethereum 30,00 times more energy efficient

NFT Projects Supporting Environmental Change

Most mainstream headlines focus on the environmental damage of NFTs, overlooking projects that are designed to impact the environment positively. While many projects attempt to support the environment, two that have already achieved some success are Greenverse and Moss.Earth

Greenverse

Greenverse is a metaverse NFT project designed to help preserve underground resources. The project uses a preserve-to-earn model which tokenizes natural resources. With this model, real-world land is turned into blocks, and each block has an NFT priced on its natural minerals, biodiversity, and carbon emission potential. 

Owners will receive rewards for preserving these resources instead of developing the land. Benefits include biodiversity credits and non-production carbon credits. Greenverse was first pioneered in Jameson Land in Greenland, though it has since expanded to Suriname in South America. 

Moss.Earth 

Moss.Earth is a tech startup looking to help individuals and businesses offset their carbon footprint with tokenized carbon credits. First founded in 2020, Moss.Earth has sent over $30 million to Amazon preservation projects and has announced the release of Moss Amazon NFTs. 

Each NFT grants the owner a piece of land in the Amazon forest, which can be monitored using remote sensing tools created by Descartes Labs. 20% of each sale will be used to maintain the area’s security and provide satellite images. According to Moss.Earth, its NFT collection sold out in less than an hour. 

Final Thoughts: NFTs Need Time To Become Environmentally Friendly

While blockchain-based transactions used for NFTs do some environmental damage, projects are continuously looking for ways to mitigate their environmental impact. For projects like Ethereum, this means moving to a PoS model, while for projects like Greenverse and Moss.Earth, this means using NFT technology to preserve our natural environment. 

Regenerative Finance, or “ReFi,” is the niche cryptocurrency movement that uses the blockchain to solve a variety of climate and Earth-oriented issues. EcoSapiens, for example, is a metaverse enabling its community to combat climate change by tokenizing and creating a market for things such as carbon credits.

NFT’s potential to solve real-world problems is huge, however, as with all novel technology, NFTs must be given time to innovate. Technology we use daily, including smartphones, laptops, and TVs, all started with great environmental demands, but recent technological advancements have allowed us to limit their environmental impact. 

This could be a similar story for NFTs, which have already taken huge strides to limit their environmental impact in just two years since going mainstream. In just a few years, it’s possible that NFTs could not only become carbon neutral but could even help support our fight against climate change.