Since the breakout of “crypto art” in 2021, NFTs (non-fungible tokens), as unique digital assets on the blockchain, have rapidly swept across global markets. In just four years, more than 2 billion NFTs have been issued across major blockchain networks, with a global market capitalization reaching hundreds of billions of dollars.

However, the narrative surrounding NFTs is quietly changing—NFTs are evolving from mere digital collectibles into functional core assets with real-world applications. Along this path of evolution, the potential of NFTs is being continuously unlocked, redefining the decentralized digital future.

The origin of NFTs lies in a revolution in digital asset ownership. In the traditional internet era, digital content could be copied indefinitely. NFTs leverage blockchain technology to assign a unique identity to digital works, granting them scarcity and ownership. This feature quickly ignited enthusiasm across the art, collectibles, and creative cultural sectors.

More importantly, this stage gave rise to a brand-new bottom-up model for IP creation. While traditional IPs rely on major media institutions and brand capital, PFP (profile picture) projects build global influence through decentralized community governance and consensus.

CryptoPunks, launched in 2017, were among the first on-chain verifiable digital collectibles. They were followed by CryptoKitties, which sparked widespread interest. In 2020, the DeFi boom pushed the crypto market into a new wave of growth, and NFTs rose alongside it. The emergence of Bored Ape Yacht Club marked the frenzy around PFP NFTs. Trading volumes surged as the market chased scarcity and uniqueness, turning NFTs into a new financial phenomenon.

This period of prosperity was largely driven by market sentiment, collective belief, and liquidity, leading to high price volatility.

As the market matured, the narrative of NFTs shifted from pure collectibles to functional applications, demonstrating richer value.

The ENS domain system was one of the first large-scale use cases, simplifying complex blockchain addresses into easy-to-read domains. This enabled decentralized identity authentication and helped standardize on-chain identities.

Meanwhile, NFTs found a breakout use case in gaming. Game items as NFTs in Stepn allowed players to truly own their in-game assets. Axie Infinity popularized the "play-to-earn" model, enabling players to generate real economic value through gaming—significantly boosting NFT liquidity and value consensus.

The exploration of NFT utility has also extended to real-world scenarios. NFT-based tickets and memberships enable anti-counterfeiting and rights transfer via blockchain verification. Web3-native brand membership cards have begun to emerge, offering holders unique social and experiential privileges.