NFTs are beginning to realize their vast potential as an asset class. Propelled by quirky and creative art, thriving communities, and burgeoning use cases, the market is expected to grow from $35 billion in 2022 to over $80 billion in 2025. Even the most ardent skeptics are beginning to pay attention.
However, with so many newcomers eager to get their share of the pie, things can get hectic. Hundreds of new collections appear every week, with the vast majority of them doomed to fail. There are also multiple blockchains to choose from, each offering its own native coin, markets, and various pros and cons. Not to mention the endless NFT scams that users need to constantly guard against. Regulators haven’t figured out what to do with the NFT market just yet, and it shows.
NFT management—an emerging industry in Web3
Amidst the chaos comes an opportunity to create calm. As user portfolios continue to grow, the demand for tools that can track investment performance, organize and display NFTs from across wallets, and guide future purchases looks set to skyrocket. And while a few basic NFT management tools are beginning to emerge, they’re usually limited to one closed blockchain ecosystem.
Users will demand better. With more and more investors embracing a multi-chain experience (the current hype around the y00ts collection is bringing many newcomers to Solana, for example), the most successful NFT management tools of the future will have the ability to seamlessly communicate across various blockchains and bring different wallets together under one umbrella. This is only possible with the use of a fast and reliable crypto API.
What’s a crypto API?
An API, or Application Programming Interface, is a program that allows software apps to interact with each other. You’re making use of an API any time you require aggregated information—for example when you use an app like Skyscanner to search for prices across multiple airlines. APIs are the messengers that work to keep every area of the digital world connected, including global finance. In fact, according to some experts, we’re living in an “API-powered economy.”
Crypto APIs take the next step by connecting users with the world of Web3. Now, you can connect with the blockchain to obtain real-time data from wallets, exchanges, NFTs, and multiple DeFi protocols—effectively creating a bridge between traditional finance and the new possibilities that crypto provides.
Tools that utilize a crypto API can integrate with all major NFT platforms and protocols, across multiple chains. Users will be able to bring their Ethereum, Solana, and Polygon NFTs together into one, easy-to-read dashboard, rather than checking individual wallets.
5 potential use cases for NFT management tools
First and foremost, a multi-chain dashboard makes the management of digital assets much easier, allowing users to take advantage of buying and selling opportunities as soon as they arise. As you probably know, the NFT market moves quickly on subjective catalysts such as hype and rumors, so the quicker traders are able to react, the higher their potential profits will be.
However, there’s much more to it than that. Depending on your target audience, you can include features that incorporate DeFi protocols, NFT security, attractive art exhibitions, and more. Consider the following use cases, for example:
Decentralized finance, or DeFi, already offers loans based on NFT holdings. Users can borrow against their NFTs, allowing them to access liquidity without having to sell. You can bet your bottom dollar that this is coming to traditional finance too, with digital assets used as collateral in much the same way as physical items like artworks and precious stones.
However, for this to happen, banks and other lending services need to be able to quickly access and accurately determine the value of an NFT portfolio. Crypto API-powered management tools are able to provide this service. Users can be rated based on the current value of their holdings as well as risk factors such as market conditions and trading behavior. Also, if the value of an NFT put forward for collateral falls rapidly in value, it can be automatically flagged for liquidation. This protects lenders and builds confidence in NFTs as an asset class.
Anti-money laundering and counter-terrorist financing compliance are crucial when dealing with digital assets. Take the recent Tornado Cash case for example. Many users are unknowingly interacting with cryptocurrency that’s associated with the sanctioned protocol and finding themselves on the wrong side of the law.
With crypto API-powered wealth management tools, users can instantly screen their transactions for risk. Wallets and sources of funds are checked against millions of records in scam, hack, and global sanctions lists and given a risk score. This helps users to make better decisions and be sure that, for example, the hyped NFTs they’ve got their eye on are both legitimate and safe for purchase.
Non-fungible assets are unique and irreplaceable. Things like rare works of art, land, diamonds, and NFTs have certain individual qualities that add value, so if you lose a non-fungible asset, it’s probably gone for good. There are already many wealth management services that provide storage and security for physical assets. However, with digital assets such as NFTs still in their infancy, most of the responsibility for security remains with the user.
NFT management tools can provide wallet security by automatically moving valuable digital assets to “safehouse” wallets in the event of a hack. A good example of this occurred recently with actor Bill Murray. His partner NFT consultancy Project Venkman stepped in to quickly secure his high-priced digital assets after his wallet was compromised and is now working with crypto analytics firm Chainalysis to bring the attacker to justice. With more and more people choosing digital assets as a store of value, the importance of this kind of service is only going to increase in the future.
Gallery for displaying digital assets
While the potential and actual use cases of NFTs continue to grow, one thing remains constant—art. Digital art has flourished as the popularity of NFTs has continued to grow, providing inspiration and a source of income to a whole new generation of artists.
Of course, we’re all excited to use our NFTs to get exclusive access to events, buy real estate, and provide proof of our digital identities. But we also like sole ownership of beautiful, unique, and valuable works of art, and we want to be able to display them.
One of the most basic functions of an NFT management tool is bringing all your NFTs together, regardless of blockchain, and curating them into a digital exhibition. This could be in a dedicated room in the metaverse, on special framed screens hanging on the wall of your house, or simply in a carousel on your phone or tablet. Great art deserves an audience, so use your NFT management tools to organize and flex your most treasured acquisitions.
Proof of physical assets
Imagine the ability to scan any physical asset (valuables like jewelry and rare collectibles, inventory, etc.) and instantly convert it into an NFT. NFT management tools can track and organize these assets, providing proof of ownership and helping to create a more efficient and accurate supply chain.
With the help of a crypto API, every movement of an item, represented by a transaction, leaves a digital footprint that is transparent and traceable. This is great for businesses, making it easier to keep track of inventory and quickly spot any delays or issues, and it’s good for consumers too, as they can see exactly where products were sourced and verify their authenticity.
In the future, and probably sooner than you think, pretty much everyone will have a digital asset collection. A whole new industry will emerge from the secure and efficient management of these assets, with crypto APIs providing the foundations.
New and dynamic companies such as Blockmate are already providing blockchain, digital asset, and Web3 integration with a single API. This makes it easy to create tailored NFT management tools, integrating all of the use cases mentioned above and more. Blockmate’s code-free API solutions can be implemented in just a few minutes and include features such as:
- Basic account information
- AML/CFT compliance from day one
- Financial screening
- Aggregated client overview
And much more. The only limit is your imagination! So, grab your API key and start building the ideal NFT management platform for your users today—you’re still early.