NFT Seeks Breakthrough in the Winter: A Three-Pronged Approach of Technology, AI, and Regulations

At 3 PM, when most colleagues were finishing their day at work, a 23-year-old young man was just beginning his day. In his apartment in Asia, he rubbed his sleepy eyes, brewed a cup of coffee, and logged into Discord.

For the next 14 hours, until around 5 a.m., he will manage the NFT project with his co-founder, coordinating with artists from different time zones and interacting with a community of thousands.

In 2025, when mainstream observers have regarded NFTs as a fleeting trend, the dedication of this young man appears out of place. While his university classmates are seeking development in AI startups or short video platforms, he and his team remain passionate about digital art ownership.

He is not fighting alone. Some NFT communities are still making progress, seemingly indifferent to the winter of NFTs. The goals and communities of these projects vary: some are dedicated to anime culture, some launch physical merchandise, and some promote a cultural movement of "online spirituality." But they all share one common point, which is NFT.

"People always say that NFT is dead, but our community is still full of enthusiasm." The young man said that their recent art competition attracted hundreds of entries from around the world, "Technology is evolving, and we are progressing too."

This persistence is not an isolated case. Despite the significant decline in NFT trading volume compared to the peak in 2021, the creator and collector community continues to thrive. The CEO of a trading platform stated that this evolution is exactly what we expected.

"With the rise of AI, there are a lot of exciting things happening in the tech field, making content creation and software application development increasingly easier." He explained, "Our main argument is that cryptocurrency and blockchain are the key infrastructure for all current technological developments."

NFT Data

The original data reveals a dramatic story: NFT trading volume has plummeted from a peak of over $3.2 billion per week in August 2021 to currently less than $100 million, a 97% drop that may suggest the NFT market has entered the final stages of a recession, but some see a more nuanced reality.

"At the beginning of 2021, there have already been some alternatives to what NFTs represent." He explained, referring to the explosive growth of meme coins, which attracted billions of dollars in trading volume, "some of which have been absorbed by the meme coin craze, as meme coins have stronger liquidity, are interchangeable, and you can trade and deposit/withdraw more easily."

Many successful NFT projects have also continued to evolve by embracing their own ecosystem tokens, creating a hybrid model that combines the community characteristics of NFTs with the liquidity of fungible tokens. "Now, many NFT projects include both tokens and NFTs."

This market shift has occurred amidst fierce competition for dominance in the NFT market, exemplified by the trajectory of a certain platform, whose market share plummeted from over 70% in 2021 to 15% in 2022, and has recently rebounded to 58% following its platform upgrade and ecosystem token release.

Another significant change is that NFTs have become cheaper, not only because of the price crash but also due to the drastically reduced costs of buying and selling NFTs. "We now have faster, cheaper, and higher throughput blockchains, allowing you to have a complete economy where an NFT costs only 50 cents, and even the rarest NFTs are priced at $50. Compared to 2021, the current ecosystem is much healthier, where the cheapest NFTs used to cost at least $1,000, even $5,000."

At the same time, related digital ownership models are thriving, with a game skin recently reaching an all-time high, with a market value close to $5 billion. This success is partly attributed to its convenience: "If you purchase in-game skins, you don't have to worry about storage issues or wallet issues."

NFT in a Positive Regulatory Environment

Fortunately for certain platforms, some recent rulings, especially the landmark court ruling between Apple and a gaming company, will fundamentally change the accessibility of NFTs on mobile platforms. This ruling effectively ends Apple's monopoly in the in-app payment space, bringing tremendous opportunities to the NFT market.

When asked about the impact of this ruling, a representative from the platform enthusiastically responded: "We have just released a new version of the public beta, which allows you to discover and trade any on-chain asset."

He explained that the court ruling directly addresses a major obstacle: "Our next plan is to bring this service to mobile in the most enjoyable way, allowing people to easily get started. Apple's ruling will be greatly beneficial, as the in-app purchase issue has been troubling us for a long time."

This change means that users will soon be able to purchase NFTs directly through the iOS app without having to pay high fees. Previously, some mobile apps did not support purchases because Apple's 30% commission made their peer-to-peer market model "too costly." The removal of these restrictions will lower the entry barrier, which is "greatly beneficial" for consumers, as they will be able to more easily experience NFTs on their mobile devices.

There is a view that the regulatory environment for NFTs and cryptocurrencies has significantly improved. With the recent changes in the political landscape in the United States, many investigations into cryptocurrency companies have concluded. During the previous period of regulatory uncertainty, many smaller creators were hesitant to participate in the ecosystem.

The Cultural Significance of NFT and Digital Identity

One of the most striking aspects of NFTs is that they remain resilient amidst market fluctuations, as reflected in their role in establishing digital identities and community membership. Earlier this year, Ethereum co-founder Vitalik Buterin changed his profile picture to a piece from a certain NFT project, which sparked a strong reaction in the market and thoroughly demonstrated this point.

Some believe that: "Owning a digital asset, purchasing it, and then setting it as your social media avatar indicates that you are part of this community, reflecting a shift in mindset."

He compared a certain NFT community to this phenomenon: "When you buy into the project, you are immediately welcomed by this truly vibrant community... it really makes you instantly recognize what the person represents."

We have also witnessed the evolution of NFT community members like the certain penguin project, which was initially launched in 2021 as a chubby, mischievous little bird that couldn't fly, and has now developed into a mature consumer brand.

Today, the figures of these penguins are all over the shelves of toy stores and in popular videos on short video platforms, and there is even an ecosystem token based on a certain public chain, with its trading volume this year jumping into the top ten. As the founder said: "Intellectual property is the 'Trojan horse' for the popularization of cryptocurrency." The journey of this project from niche collectibles to mainstream peripheral products also confirms this point.

At the same time, a certain NFT project focused on anime tends to narrative storytelling and fan collaboration, with the founder describing its mission as "respecting the anime cultural heritage while pioneering new creator funding models." Like many other projects, it now has its own ecosystem token, with more than half of the token distribution allocated to its NFT holders, which "highlights how digital communities co-own IP development, from storylines to funding anime production."

NFT Technology Cycle

There is a viewpoint that the current state of NFT is part of the natural cycle that new technologies typically undergo, "Any new technology goes through a very exciting period where people are interested in its use cases, followed by a period of frenzy, which is exactly what we saw in 2021."

But usually afterwards, people will spend more time building infrastructure, use cases, and innovations, which is what we have seen in the past few years.

This perspective aligns with what we have seen in other technological revolutions. From the internet itself to mobile applications, the initial hype was gradually replaced by a more sustained development phase, where true value began to emerge.

Although the early focus was mainly on digital art and collectibles, there are views that NFTs are part of a broader aspect of digital ownership, which will become crucial as our lives become increasingly online. A certain platform "has truly evolved from a purely NFT marketplace to a platform where any on-chain assets can be discovered, owned, and traded."

In fact, NFTs have continuously shown us that they are more than just "NFTs": from a community-driven anime project entering the anime industry, to collaborations between the Penguin project and toy series, new projects are strongly leaning towards the aspect of "online identity". For instance, a certain project shifting from PFP to banners and high-end fashion entities demonstrates the powerful capability of NFTs as online programmable IP, rather than just digital JPEGs.

There is a viewpoint that an especially interesting emerging trend is the connection between physical goods and NFTs, "many companies are now creating physical products presented in the form of NFTs."

He highlighted a certain company that has "generated considerable revenue and huge trading volume" by allowing people to trade rare cards presented in the form of NFTs and obtain actual physical items on demand.

"They are not very eye-catching because they are not necessarily typical NFT projects, but they are a great example of the flexibility and utility of NFTs. They are not necessarily purely digital collectibles or artworks; they can represent a wide variety of things."

NFT, Artificial Intelligence and Gaming

There is a view that the rise of generative AI has created new opportunities for NFTs, "This has made content creation incredibly easy. If you are a developer looking to create a game, or if you are an artist wanting to create artwork, it has now become effortless."

With the development of these AI applications, some believe that many developers will want "to have unique digital ownership in some way," and this is where NFTs can play a key role.

Interestingly, there is a view that AI does not pose a threat to the value of NFTs, but rather enhances the importance of provable digital ownership. "For digital art, because it contains elements of human culture, I believe there needs to be a layer of provable digital ownership."

There are also views that many exciting Web3 games are under development, including blockchain-based collectible card games. Many of these projects are integrating AI, and despite market fluctuations, development and release continue.

Another notable example of how NFTs enhance gaming experiences is a certain dinosaur project, which launched its gaming experience in collaboration with a mainstream game publishing studio known for several popular games.

In addition, the project has also received recognition at the 2025 Collision Awards, a prestigious event aimed at honoring excellence across all fields, including film, television, and gaming.