The Mystery of the Metaverse Gate: An Overview of NFT Evolutionary History and Trends

Author:LD Capital Research

Edit: Noise z

The full name of NFT, is Non-Fungible Token.

It has the nature of being indivisible, non-interchangeable, and unique. At present, NFT is mainly used for cryptoart, game props, virtual goods, and tickets.

In March 2021, “Everydays: The First 5000 Days” by artist BEEPLE sold for $69.34 million at Christie’s, the third-highest price for a work by a living artist.

In the early days, NFT was just something like the concept of “Colorcoin” on Bitcoin network, and then blockchain players implemented the application layout of Spells of Genesis and Rare Pepe on the bitcoin extension platform Counterparty, which can preserve non-fungible content. In 2017, NFT with ERC-721 Ethereum standard was launched, NFT began to emerge in Ethereum ecosystem, and entered a settling period with the change of the market wind. Since 2020, NFT starts to boom on Ethereum with side chains, and other public chains, becoming an ecological star.

NFT has 4 core features: interoperability, tradable, true holding&scarcity, tamper-resistant&atomicity.


The same token standard allows NFT to circulate in different DAPPs, for example, game props can also be sold on Opensea. Asset reuse will be achieved as well, the roles and props in game-A can be used in game-B.


The high liquidity by DeFi and various marketplaces make NFT trading more convenient and diversified.

True holding and scarcity

The NFT held is unique, the NFT onchain hash is also different for the same version of NFT. Only true holders have the right to deal with their NFT in Web3 wallet, no one else can delete or transfer the NFT from the holders.


The NFT contract provides the option to prevent from any adjustment or additional issuance after uploaded, and ERC721 tokens cannot be split like ERC20 ones.

The characteristics of NFT bring about various application scenarios today:

Onchain assets: cryptocurrencies, crypto arts, game props on blockchain, virtual pets, etc.

Offchain assets tokenization: such as ID documents, luxuries certificates, events tickets, real estate certificates, and other voucher assets’ tokenization.

Origin of NFT

It appeared with the concept of Colorcoin on Bitcoin network in 2012; Colorcoin is composed of a small piece of Bitcoin, the smallest unit is “Satoshi”, to achieve diversified assets and other use cases via onchain data fields.

Key point: the core prerequisite of Colorcoin’s adoption is the strong consensus. If people doesn’t recognize its asset property, then the consensus collapses, and its value returns to zero.

In March 2015, EverdreamSoft released its first card on blockchain in the game “Spells of Genesis”. In August 2015, the token BitCrystals in the game of “SoG”conducted crowdfunding, then EverdreamSoft launched the world’s first blockchain card game, Spells of Genesis, in April 2017.

The BitCrystals token (currency in game) was initially issued on the Bitcoin network, taking multi-chain development and then mapped a part on Ethereum . At that time, SOG was the pioneer of onchain storage for game props and blockchain crowdfunding.

Photo Source:

Meme players made RarePepe on the Bitcoin network via Counterparty in 2016, players could create and publish rare Pepe frogs and trade on Bitcoin network.

In terms of concept and form, RarePepe is more similar to today’s NFT art, there are different styles of Pepe’s original works on the website, which has evolved into MEMEs and various cryptoart styles, such as pop, magical, classical, abstract etc.

Image source: Rare Pepe Directory

Supporting apps include Rare Pepe Directory, Rare Pepe Wallet, and PEPECASH for buying PEPE.

NFT budding

In June 2017, the NFT on Ethereum emerged.

Cryptopunk launched by the New York company Larva Labs with the total number of 10000, was generated by the unique algorithm. Any Ethererum wallet can claim for free, and then all Cryptopunks were picked up quickly.

The secondary market of Cryptopunk got hotter and hotter since then , the market gradually accept the concept of unique cryptoart. There wasn’t ERC-721 token standard yet at that time, Cryptopunk actually doesn’t belong to ERC-20 token, but belongs to their combination, so created a precedent in NFT space.

Cryptopunk#7523 - 11.754million USD & Cryptopunk#7804-4200ETH

Following Cryptopunk, Dieter Shirley, the technical director of Axiom Zen, proposed ERC-721 token standard as the primary sponsor in September.

CryptoKitties developed by Axiom Zen in October 2017, is a NFT game based on blockchain that allows players to adopt, raise and trade virtual cats.

CryptoKitties is the first DAPP applying the ERC-721 standard.

CryptoKitties “Dragon”

The emergence of CryptoKitties coincides with a bull market. Some people who made high profits by raising CryptoKitties for short got a big volume of traffic, even because of too many CryptoKitties players, Ethereum network got congestions then. The fact that its trading volume peaked at $21.9 million in just two months, with the most expensive CryptoKitties “Dragon” sold for 600ETH, lightened the blockchain game concept at that time.


Settling period - 2018

The new company - Dapper Labs ( R&D team of FLOW chain, NBA Top Shot) created by CryptoKitties’s parent company Axiom Zen, received about 30 million US dollars’ investment from A16Z, Google Ventures, Samsung, and other companies. In the same year, NFT trading platform Opensea was born with the largest market share today.

Following the CryptoKitties fad, the frenzy of crypto influencers comes, buying their portrait cards, waiting for others to buy your cards at a higher price to earn the spread (BitClout is similar but different actually) which is essentially a “pass the parcel” game.

Because of the CryptoKitties’s wealth effect, many blockchain games with relative platforms emerged in 2018. But not all of them that were founded in 2018-2019 have survived so far.

NFT and GameFi platforms like Enjin, Decentraland, SuperRare, Cocos-BCX, which were born in 2018–2019, were supported by strong user base and technical ability.


The figure shows weekly active addresses of NFT , weekly interactions with smartcontracts, and weekly transactions volumes in USD during 2018–2019. The number of smartcontracts interactions has increased slightly, the number of active addresses has increased sharply, while the trading volume has fallen by more than 80% compared with the same period last year.

Given that only a few independent projects like CryptoKitties got focused, it doesn’t mean a real industry trend, only for education, but rather than the popularity outside the industry, there’re NFT followers still in the cryptospace.

From late 2017 to early 2018, the initial outbreak of NFT appeared with bubbles, which it took about a year from 2019 to early 2020 called settling period to digest.

NFT renovation

Since 2020, the combination of NFT and DeFi achieved GameFi; with the launch of Flow chain, NBATopShot collection, cryptoart finally was experiencing its boom in the primary and secondary markets with NFT’s second carnival moment.

The NFT virtuoso WhaleShark, released his social token $WHALE on Ethereum in May 2020, the value base of $WHALE token (Vault) is essentially the NFTs WhaleShark collects. NFT brings additional value to token, from another point of view, combining NFT and DeFi.

NFT:0xe7079eec020ddfc3f1c0abe1d946c55e6ed30eb3 held by WHALE

With the emergence of GameFi in August and the Twitter post “The Degenerator” by Jordan Lyall, the ex-Product Lead at ConsenSys jokingly mocking those worthless projects that can issue new token within minutes, someone created a token called $MEME to fully airdrop for that, 350 $MEMEs were allocated to anyone who early joined the Telegram group.

Because of the strong community consensus and cohesion, $MEME, which was created as a joke without any value to definition, has become a NFT token with several diversified use cases.

More fun has been brainstormed as it develops, such as staking $MEME to earn non-transferable pineapple points which can be exchanged for NFTs.

Due to the combination of DeFi and NFT, and some MEME elements, $MEME got pump from single figures to 2000 USD above in a month. Since then, $MEME has been working with artists to launch new NFT cards to claim, Meanwhile Beeple on Twitter said he was willing to launch NFT with MEME.

Photo Source:

In September, DEGO attracted lots of traffic from NFT airdrop events on Twitter, whose community members holding NFTs by DEGO airdrop could participate in NFT mining, dividends and governance; furthermore, thanks to DEGO , players could be exposed to more different gameplays with NFT, which actually could be traded freely in the secondary market as well.

The NFT upsurge in Q3 2020 made NFT well known in crypto world. FLOW is a blockchain specially developed for NFT, onchain games, and alternative digital assets, backed by influenced companies and VC like Warner Music Group, Google Ventures with some famous IPs : NBA, CryptoKitties, MOTO GP, UFC, UBISOFT etc. With the emergence of the FLOW chain, NFT entered the popular consciousness, laying the groundwork for the NFT bull market in 2021.


NBATopShot is something of basketball stars card collection developed by Dapper Labs, built on the FLOW chain and officially authorized by NBA, following the beta allowing users invitation in August 2020 , finally got launched in October. After that, the number of users boomed in January 2021, and eventually total trading volume surpassed CryptoKitties, to $29.48 million on January 26th 2021.

The onchain digital star card can transform the video into tamper-resistant and unique NFT for memorable moments, thus the price in the secondary market got skyrocketed.

Meanwhile, The phenomenon that a few NBA stars and sports KOLs are active on social media for such events, brings the influence of NBATopShot outside the cryptospace. A large number of NBA fans driven by them began to learn about NFT , actively participate in the game of mystery card boxes. NBA officials even set up a blockchain consultative committee for that.

In February, NFT market was hot about Hashmask which was generated by the algorithm with total number of 16384 cryptoart NFT and priced by bonding curve where the inventory decreases, prices rise. 16384 unique Hashmask NFTs were sold out in five days, even with the deal price at 100ETH each for the last three. Furthermore, Hashmask introduced the mystery boxes mechanism with more fun that no one knew what they were buying until it was sold out.

Hashmask is made up of different elements, some rare of which make more rarity to those who have them, drive the price skyrocketed so pursued by everyone. Among them, Hashmask#9939 was the most expensive one with the deal price of 420 ETH, following which the price of Hashmask#6817 was 300ETH.

Hashmask#9939 Hashmask #6817

Since then there are similar NFT mystery boxes in the primary market , all of which were generated by algorithm similarly sold via bonding curve auctions, but a bit mediocre in the secondary market. Only a few were sought after.

A legacy project name MoonCats in August 2017 generated nearly $0.6M gas fees in just 3 hours because of the recommendation by NFT KOLs , paid for MoonCats claiming, the performance in the secondary market of MoonCats kept hot for a period at that time.

The third NFT project of Larva Labs — Meebits, with a total number of 20000, some of which were airdropped to CryptoPunk and Autoglyphs holders for free and remainings were sold via LBP auction.

Meebits will be more widely used than CryptoPunk, which is essentially a mobile doll of 3D modeling under ERC-721. The goal is to create an avatar for your own role in Metaverse.

With the Meebits launch, the trading volume onchain peaked at 176,042,317 USD on May 9.


The hottest NFT today is Bored Ape Yacht Club, with the initial fixed price of 0.08ETH, like the mystery box mechanism of Hashmask. Many people bought it because of the low pricing and celebrity effect by KOLs, due to the community consensus and wealth effect, its trading volume has been kept at a high level at the top trading list of NFT these weeks.

External factors

In addition to the popularity within the crypto world, it’s essential for NFT’s today’s adoption that it could be widely known and participated by the masses.

Data source: Google Trends

According to the data from Google Trends, when Beeple’s art work of “Everydays:THE FIRST 5000 DAYS” was auctioned, the NFT global searches reached a phased high and then fell back. In mid-to-late April, NFT was back in the public eye with searches rising as more NFTs released by stars and KOLs.

Following Beeple’s auction, several stars and artists like Zion Williamson, Takashi Murakami, Snoop Dogg, Eminem, Twitter CEO Jack Dorsey, Edward Snowden, Paris Hilton, Yao Ming , have released NFT through various NFT marketplaces. Thanks to a series of events in March and April, NFT went into the world outside cryptospace with high public attention.

Why NFT prosperous?

1. Main fundamental problems were solved by technological innovation.

The FLOW chain developed by Dapper Labs and various Layer2 and public chains are to solve the same problems such as poor users experience due to congestion on Ethereum. Meanwhile, NFT can be applied for onchai ncryptoart, game, music, and ticket etc.

2. Outstanding NFT projects attract a massive volume of new players.

Blockchain games like Axie Infinity whose players mainly from Southeast Asian can earn $SLP tokens income even sometimes higher than their salaries, can attract a massive volume of active users due to their play-to-earn and entertaining. The artists can make profits by creating and listing NFTs on high-liquidity marketplaces such as OpenSea and Makersplace.

DEGO and MEME involve more players in NFT market via GameFi.

NBATopShot, the combination of traditional IP and blockchain authorized officially, attracts not only the player in crypto world, but also NBA fans and star card collectors, Blockchain has been involved by more IPs like F1, MOTO GP, UFC and traffic stars to release the similar onchain products. For example, NBA’s Zion Williamson and SLAM Magazine jointly launched NFT on OpenSea for sale, Snowden created NFT for auction on Foundation with the final price up to 2224ETH.

3.DeFi’s success and NFT’s wealth effect

DeFi’s success bringing sufficient onchain liquidity and players reduced obstacles for NFT emerging subsequently. The promotion within crypto world made NFT enter the popular consciousness, NFT projects invested by top exchanges and crypto funds comes out one after another.

One of the keys to global adoption is the wealth effect brought by NFT, from NBATopShot NFTs of Zion and James sold for hundreds of thousands of dollars, to Beeple NFT art works sold for $69.34 million at auction, people in traditional world gradually understood NFT’s value and direction. Influencers inside and outside the crypto world made profits by creating NFTs from their fans and traffic.

4. Incremental market, traffic economy

The fact that people and capital outside the crypto world continuously participate in make the market keep its uptrend and incremental, some of which enter NFT market as well.
Meanwhile, many influencers, artists, KOLs and famous IPs good at traffic economy issued NFTs to attract their fans for potential high deal price at auction which promote NFT as well.

The future has come!

Although NFT has been widely adopted and applied this year, it still focuses on trading in primary and secondary marketplaces. Crytoarts encountered cooling down without liquidity after online hyped due to the lack of real use cases and value basis, and even nobody trade.

At this stage, beside ERC-20 and ERC-721 with highly liquid scenarios, there are few NFT use cases in other directions for the time being, like the NFTs in Tellar fortune sale on different level are backed by a corresponding number of ETH, AAVE’s Atoken is used for Aavegotchi NFT , and Uniswap V3 NFTizes its LP tokens, there’ll be more DeFi projects where NFT can be applied for digital certificates, real assets, bills and so on as DeFi arts.

Metaverse for now is an ideal solution to the lack of cryptoarts’ liquidity and use cases, which also should combine with NFT on blockchain for its diversified identity, social, economy and trading elements, where developer can construct and exhibit new components via ERC-721 API as a NFT for each. The internal economic system is essentially the exchange among tokens of ERC-20 and ERC-721, and OpenSea becomes something like NFT store, art auction exchange, and furniture store, where you can buy different type of NFTs to the construct your space and role and props. Furthermore, as long as it get modeling in Metaverse, owners can exhibit all for NFTs they own.

In Metaverse, the space (or the land) is also the kind of NFT, just like the NFTized real estate in the life, which can be traded freely. (The Sandbox land sold out in 15 seconds)

In the near future, maybe the Metaverses like “Ready Player One” or “Sword Art Online” will be there.

Meebits controlled by you visit the clothing store, furniture store or shoe store in Metaverse, where the NFTs purchased there can be changed into real goods in physical stores.

In such virtual world, you’re be able to exhibit your cryptoarts collected as the curator, trade digital assets in your Web3 wallet freely via Uniswap just like a stock exchange, and play games like CS, GTA, NBA, FIFA and so on. You’re also able to get immersive experiences of social, entertainment, adventure, and spend your life in it for virtual life on blockchain.

NFT is another expression of DeFi as a door connecting virtual and real world.

LD Capital established a $10M sub eco fund focusing on NFT/Metaverse/GameFi/digital collectibles and invested in BIGTIME, Flow, Efinity, Illuvium, Seascape, Terra Virtua, Epik, Alethea, Alienworlds etc, as the strategic investor and partner, we will collaborate with those outstanding projects to co-build the digital world.

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LD Capital( is one of Asian earliest organizations focusing on investing in the blockchain field. We have members in China, Singapore, Korean, EU and US, previously they worked for financial and high-tech companies like Visa, Cisco, Binance and have been actively investing in blockchain companies since 2016 with 1000 Million AUM.

LD Capital has successively discovered and invested more than 200 companies in DeFi/infra/protocol/Dapp/financial solution/GameFi fields for both equity and token investments in different stage from seed to later rounds.

LD Capital is also holding a basket of crypto assets on secondary market like BTC, ETH, DOT and so on, with our own private fund without any LP involvement, which has much flexibility on market insights and to balance short&long-term investment strategy. Currently we have about totally 30 members for investment and analysis, post-investment service, and branding to collaborate with our partners for better promotion and global marketing adoption.


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