Arcana Network's Impact on NFTs

by

Ajay Shetty

Announcements

|

Dec 6, 2023

The digital collectibles market is burgeoning, powered by blockchain's promise of unique, verifiable, and tradable assets. However, the entry barrier concerning complex user experiences (UX) remains a significant hindrance. Arcana, with its user-centric solutions, emerges as a catalyst for simplifying onboarding, thus fostering greater adoption.

Digital Collectibles Total Addressable Market (TAM):

  • The global digital collectibles market is currently valued at approximately $13.8 billion in 2023, showcasing a substantial growth compared to previous years. The user base is continually expanding, with millions of users engaging in digital collectible transactions annually​​. Projected Market Size in 2028: USD 40 Billion (Estimated with a CAGR of 22.5%).


  • Art and illustrations, sports memorabilia, music and audio, virtual real estate and land, gaming assets, trading cards, domain names, fashion and apparel, videos and films, virtual pets and characters, comics and books, and photography are major categories within the digital collectibles domain.

Web3 Collectibles:

  • The Web3 collectibles segment, a subset of the broader digital collectibles market, is rapidly gaining traction. Blockchain technology underpins Web3 collectibles, ensuring authenticity and ownership of digital assets. However, the exact market size and user base are still emerging, indicating a nascent yet promising market.

  • Web3 collectibles collectively account for approximately $3B in 2023 and are estimated to grow to $11B (CAGR of 30%).

  • Current Web3 collectibles account for a user base of 1.5 Million holders and projected user base in 2028 is estimated to be 10 Million (Estimated with a user growth rate of 36%).

  • The top 10 Web3 collectibles by market cap over the last 30 day include Bored Ape Yacht Club, Mutant Ape Yacht Club, Pudgy Penguins, Azuki, Captainz, Crypto Punks, Chromie Squiggle, More Loot, Sandbox and Otherdeed. As of today, majority of the Web3 collectibles reside on Ethereum but in recent times other ecosystems such as Polygon, BNB chain and Solana are becoming breeding grounds for new wave of Web3 collectives.

Growth Potential:

  • Technological Advancements: The growth in NFTs is significantly driven by blockchain improvements which enhance user experiences and lower transaction costs. The market is projected to exhibit a Compound Annual Growth Rate (CAGR) of between 18.55% to 34.2% in the coming years​​.


  • Monetization and Financial Innovation: The integration of NFTs with decentralized finance (DeFi) platforms and innovative monetization models like fractional ownership will continue to attract more participants to the NFT market. It's suggested that the market could increase by 1000s times by 2031 due to its growing popularity in collectible trading and the increasing importance of decentralized finance (DeFi)​.


  • Legal and Regulatory Clarity: Legal and regulatory clarity can bolster NFT market growth by instilling investor confidence, defining intellectual property rights, establishing consumer protection laws, providing clear taxation guidelines, facilitating global harmonization of regulations, and legitimizing digital ownership, thereby creating a conducive environment for investment, innovation, and global market expansion.

Challenges in Onboarding Users to NFTs and Web3 Collectibles

  • Technical Complexity: The technical nature of blockchain technology can be a barrier for new users unfamiliar with concepts like wallets, private keys, and blockchain transactions.

  • User Education: There's a steep learning curve for understanding how NFTs work, their value proposition, and how to safely buy, sell, and store them.

  • User Interface (UI) and User Experience (UX): Many platforms and wallets have interfaces that are not intuitive for individuals new to the digital asset space, which could deter them from engaging with NFTs.

  • Cost Barrier: The costs associated with purchasing, transferring, and minting NFTs, including gas fees on certain blockchain networks, can be prohibitive for new users.

  • Security Concerns: Concerns about the security of digital assets and the risk of loss due to hacking or user error can be daunting for newcomers.

  • Privacy Concerns: Some users may have concerns about privacy, particularly regarding the transparency of blockchain transactions and the potential exposure of personal information.

  • Lack of Regulation and Consumer Protections: The lack of clear regulatory frameworks and consumer protections in the NFT space can create uncertainties and distrust among potential new users.

  • Interoperability: Lack of interoperability between different blockchain networks and NFT platforms can complicate the user experience and limit the utility and liquidity of NFTs.

  • Market Volatility: The volatility in the price and value of NFTs can be a deterrent for new users who might see the market as unstable or risky.

  • Discoverability: Discovering quality NFTs among a vast number of options and different platforms can be challenging for newcomers.

  • Lack of Standardization: Varied standards across different NFT platforms can lead to confusion and a fragmented market experience for new users.

  • Legal Ambiguity: The legal status and rights associated with owning and trading NFTs is unclear, adding another layer of complexity for new users.

Arcana Making the NFT Onboarding Seamless

Arcana has the potential to mitigate several onboarding challenges associated with NFTs, enhancing user experience and facilitating wider adoption. Here's how Arcana is well-positioned to address some of these challenges:

  • Technical Complexity Reduction: Arcana's suite of products simplifies interactions with blockchain technology, reducing the technical complexity for users. By providing user-friendly interfaces and tools, Arcana can help new users navigate the NFT space with less technical know-how.

  • Improved UI/UX: Arcana can offer streamlined user interfaces and seamless onboarding processes, which are crucial for enhancing the user experience and lowering the entry barrier for newcomers.

  • Cost Barrier Alleviation: Features like gasless transactions in Arcana's offerings could address the cost barriers associated with blockchain transactions, making it easier and more affordable for new users to engage with NFTs.

  • Enhanced Security and Privacy: Arcana's infrastructure could provide secure and reliable solutions for managing digital assets, which can address security concerns and build trust among new users. Additionally, Arcana’s app chain will offer capabilities for the developer to add privacy stack to their applications ensuring a secure and compliant environment for handling NFTs.

  • Simplified Authentication: Through simplified authentication processes, Arcana can reduce the friction associated with onboarding, making it easier for users to access and engage with the NFT market.

  • Developer-Friendly Ecosystem: By providing developer-friendly tools and resources, Arcana can foster the creation of more user-centric NFT platforms and applications, which in turn can help in tackling the onboarding challenges.

Potential Impact of Arcana on Growing Adoption of NFTs

User Acquisition: A simplified onboarding process could significantly increase user acquisition rates. It's conceivable that user-friendly Web3 onboarding solutions could boost new user onboarding by 50% to 70% or more, especially as awareness and education around NFTs continue to grow.

Retention Rate: By reducing friction and providing a seamless user experience, retention rates could improve. A more intuitive and less technical onboarding process might increase retention rates by 27%.

Conversion Rate: The conversion rate from traditional digital platforms to Web3-based NFT platforms could see a notable increase. By abstracting away the complexities associated with blockchain and NFT transactions, the conversion rate could potentially increase by 45%.

Developer Adoption: With holistic Web3 UX and onboarding stack, more developers might be inclined to build on Web3 platforms, thus expanding the ecosystem of NFT platforms and applications. Developer adoption could increase significantly as the barrier to develop applications lowers.

Community Growth: Enhanced onboarding experiences could foster stronger community engagement and growth. A more user-friendly onboarding process might drive community growth rates up by 30%.

Transaction Volume and Revenue Growth: Increased user acquisition and transaction volumes through seamless payments and authentication solutions could result in substantial revenue growth for NFT platforms. Revenue growth could potentially range from 20% to 35% or more.

Note: The estimates are based on the local interactions data points and global surveys on current challenges with Web3 onboarding. These numbers don’t represent any financial advice or promise by the Arcana Network.

About Arcana

Arcana Network is an UX-focused appchain dedicated to improving Web3 UX with a suite for products for developers and users.

Its offerings include Arcana Auth for seamless user logins and web3 authentication on dApps, Arcana Gasless for frictionless Web3 transactions, SendIt for simplified crypto transfers​.

By addressing challenges like user onboarding, complex user interfaces and transaction costs, Arcana is fostering a more user-friendly and inclusive web3 ecosystem

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May 20, 2024
Announcements

by

Andria Efstathiou

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Schedule a Demo

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Copyright © Arcana Technologies Ltd. All rights reserved.

Schedule a Demo

The call is completely free and no commitment is required.

Schedule a Demo

The call is completely free and no commitment is required.

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The call is completely free and

no commitment is required.