NFTs have had enough of a run so that we can now know which are the countries that have the most NFT users and buyers. Where are the biggest NFT markets? The first part of the series of articles focuses on Asia.
Thailand has taken the lead, according to a Statista study published on June 3rd 2022. Citing a finder.com survey, DKSH reported that it was Philippines that was leading the market and followed closely by Thailand and Malaysia. Going back to the Statista report, it’s worth noting that many Southeast Asian nations are in the list of the top NFT users. Vietnam (5th), India (6th) and Indonesia (8th) all make the top 10 —alongside Thailand—. So regardless of who is at the top, and what nations contribute with the most NFT users and owners, there is a definite trend that is worth observing. Is there a specific reason why this would be? What has NFT solved for the citizens of these nations that has made them such high adopters of NFTs? Let’s have a look.
Let’s start with one of the most popular gaming NFTs out there: Axie Infinity. This is a case that’s perfect to analyze the Southeast Asia NFT market. That’s because the game has a big popularity in the region, particularly in Philippines, and its parent company is from Vietnam.
Axie Infinity is a P2E game, which means that once you’ve bought your NFT you can use it in the game in to order to earn money by achieving the things that the game wants you to achieve. The two tokens that are earned in the game are Smooth Love Potion (SLP) and Axie Infinity Shards (AXS). The AXS token is available to be exchanged in all major crypto exchanges, which means that what you earn in the game is actually worth something. So it has become a real solution to get some additional incomes for many Filipinos. In a country that where wages are low, this game provides a solution to the liquidity issue that many NFTs have. Because an NFT that is art, what you are doing is buying something that might be worth more in the future. You invest on its value going up. But it does not bring liquidity. Axie Infinity solves that.
When the pandemic hit Philippines, 4.5 million people lost their jobs. Given how Axie Infinity solves the issue of liquidity, then it’s no surprise that it became big in Phillipines and it’s neighboring nations. Many Filipinos started to use Axie Infinity as a very useful source of revenue. With the renowned “scholarship” program that this P2E game uses, many don’t even have to own the NFT to play the game and earn the token. It’s like renting the NFT so that you can get a profit from what can be considered as fixed cost.
So we can see how, out of necessity, Southeast Asian nations decided to get into NFTs. Now, think of another variable that has to be considered: the scale of the market. Around 60% of the world’s population lives in Asia. And in that context, there is not as much reliance of heavy holders of NFTs —or whales—. There are whales, but that is coupled with people that do not own as many NFTs. What you get is a market where more small investors are getting to understand the NFT space.
Now, it’s interesting to think of why would the NFT market be dominated by smaller NFT holders and not whales. After all, what this could possibly mean is that there is more adoption of NFTs in this part of the world. When you consider some of the conditions of these countries, which includes impoverished populations that migrate and send remittances back to their families, you find the right context for people to become more crypto-savvy.
Cryptocurrencies can be ideal for remittances due to the fact they can be transferred instantly from one person’s balance in his or her exchange, to another person’s back home, with very little transaction fees. This, while also providing liquidity almost instantly. So with this ability to receive remittances in cryptocurrency, it’s not a far stretch going from there to actually owning an NFT. The person receiving the remittance would have already adopted the technology.
You can see some countries with a similar situation as Philippines or Thailand that have shown higher than usual NFT adoption rates. Countries like Venezuela, which has had economic issues that have resulted in mass migration, have also become very interested in the NFTs and cryptocurrencies. A way to protect oneself from the dire economic circumstances that makes the local currency worthless. And thanks to the fact that remittances can be done a lot easier in crypto, these nations have seen interest in NFTs and crypto rise substantially. Now, Venezuela is smaller than its fellow Southeast Asian NFT enthusiasts. Scale is why the whole region is of interest to the NFT space currently.
What to take into account when considering the market
It’s very important to take into consideration that a big need of the majority of NFT users in this region is liquidity. Being able to use the NFT to acquire goods and services. If you want to access this market of masses, can you think of a way that your NFT art solves a problem for this market? Might sound a bit utilitarian, but consider the possibilities that NFT offers. It’s a space that is in a highly exploratory phase. Remember that what is displayed in the NFT is not the only thing that can be considered art. The smart contract can be part of the artistic experience. Or maybe you can gamify the experience and have a P2E component.
What is very important is to keep an eye on the markets where a bigger adoption is happening. Those can hold clues as to what the market will look like and what will be the trends worth getting on. The Asian market, particular it’s Southeast region, holds a lot of promise to deliver those clues.