The NFT (Non-Fungible Token) market has witnessed a significant decline in NFT prices, with many collections now considered worthless. A recent report by dappGambl found that 95% of the NFT collections it analyzed have a market cap of 0 Ether (ETH).

In the past, during the NFT boom of 2021 and early 2022, many collections were created without clear utility or longevity, driven by FOMO (Fear of Missing Out). However, as with many industries, those without a solid plan have been phased out, while pioneering NFT collections like Cryptopunks have maintained their value.

Cryptopunks, created in 2017, has seen its floor prices remain relatively stable throughout market fluctuations, unlike many newer collections.

While NFTs representing profile pictures (NFT PFPs) still dominate the market in terms of market capitalization, the industry is shifting toward NFTs that offer utility to buyers. Utility NFTs provide holders with access to real-world experiences such as exclusive events, merchandise, and redeemable points.

This move toward utility-based NFTs has attracted more brands to the industry as they seek to build deeper relationships with customers. Even traditional Web3 companies are using NFTs to reward their communities with real-world experiences.

However, the NFT industry’s evolution is reminiscent of the Initial Coin Offering (ICO) boom of the mid-2010s. ICOs also generated significant excitement before fading in popularity due to regulatory challenges.

Clearer regulations in the NFT space could lead to a more defined and sustainable industry. Regulatory scrutiny from entities like the Securities and Exchange Commission (SEC) has already resulted in fines for NFT projects accused of selling unregistered securities.

As the NFT market matures, utility-based NFTs may become a key feature that attracts both brands and traders, potentially bringing NFTs to a broader audience.