Over the last two years, India has witnessed a sharp surge in non-fungible tokens (NFTs) and new start-ups started coming up around this virtual asset class. At present, there are over 86 active NFT-based start-ups in India. Of this, nearly 71 start-ups were launched in 2021 alone, according to data accessed from Tracxn.
Several existing tech start-ups operating across different industries have also introduced NFT-based offerings on their platforms. Key segments and use cases for NFTs currently in India include gaming, collectibles, financialisation and social networks.
“India is already a key gaming and entertainment market, with most millennials and Gen Z Indians being crypto and NFT aware. It is going to be one of the biggest markets for NFTs. Even though there is regulatory tightening right now, the market is very receptive to projects with tangible benefits,” Ramkumar Subramaniam, CEO and Founder, GuardianLink, told BusinessLine.
He added, “Taking into account that India is a cautious NFT market at the moment, we at GuardianLink created tangible utilities for our NFTs and rolled out a zero-gas layer 2 for NFTs. These two factors combined have helped us sell 55,000 cricket game NFTs within 10 minutes of dropping, beating our own previous records.”
Toshendra Sharma, Founder and CEO, NFTICALLY, told BusinessLine, “As NFTs can showcase the proof of actual ownership of specific assets on blockchain, thereby ensuring exclusivity for the owner, they can lend profound benefits for verifying licensing and certifications. Counterfeit tickets and merchandise are some critical issues plaguing major industries like sports, entertainment, etc. Blockchain serves as the perfect alternative for resolving such issues with ease.”
NFTs for passive income
Start-ups believe that NFTs will see a serious use case in the fintech sector.
“The financial industry is not untouched by NFTs. Advanced NFTs can even provide you with passive income, not to miss the billion-dollar gaming industry such as CryptoPunk, Bored Ape Yatch Club and Azuki. There are many big names included that have helped the crypto community get exposure to NFT’s,” said Abhay Sharma, CMO, MetaOneVerse.
Despite its growing popularity, along with cryptocurrencies, NFTs too fell under the purview of the 30 per cent tax being charged on virtual digital assets from April 1.
Sharma said, “I believe that as the government explores NFTs, it will see the potential and benefit users with reduced tax slabs or perhaps a better and more competitive tax ratio. Having said that, in the future, we can easily see financial transactions happening through virtual assets instead of fiat currencies.”
Outlook for 2022
“NFTs are going to take over digital spaces. There are many big players in the game like Meta (Facebook), Google and Samsung. They are developing their new NFT platforms, said Sharma.
Bollywood and gaming sectors have the fastest to adopters of NFTs in India.
Toshendra Sharma said, “2022 is expected to be the year of non-fungible tokens (NFTs). At $40 billion, the global market capitalisation for NFTs is inching closer to the entire global art market cap of $50 billion. In India, brands and influencers across industries are experimenting with NFTs and Metaverse. Bollywood and sports stars have launched their own NFT marketplaces to engage and promote their work.”
“Similarly, various NFTs tech start-ups are now exploring ‘Play to Earn’ option to venture into the gaming sector. India’s gaming sector has exploded in the last year — recording 170 per cent growth between 2020 and 2021 alone. The market is expected to triple by 2025. With over 450 million gamers, industry players are betting this will create the right growth market for NFTs,” he added.