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<h2 id="header-0">Quick Takes</h2><ul><li>The weak value framework is responsible for the majority of NFT projects' low-value appreciation.</li><li>The total value of an NFT is comprised of its intrinsic value, its functional value, and its social value.</li><li>Web3 games are excellent vehicles for the 3-layer framework as they are most likely to form the three value dimensions and are capable of achieving more.</li></ul><p><img src="https://academy-public.coinmarketcap.com/optimized-uploads/cee7c5251e2240378714f4d37f61ad9f.jpeg"></p><h2 id="header-1">A Falling NFT Market and its Cure</h2><p>After peaking in 2021, the NFT category has lost up to over 80% of its market value since the bear market this year. According to the data from June Analytics, the trading volume for NFT has decreased significantly from $17 billion in January all the way to $470 million last month. The dramatic slump has thwarted the NFT market's high expectations and cast doubts on the evaluation and long-term value appreciation of NFTs.</p><p>The constant cold market sentiment caused by investors trying to recoup their previous losses is believed to be one of the reasons for the market's decline. However, as suggested by MixMarvel, a more important reason behind the poor value appreciation of the majority of NFT projects lies in the weak value framework that is in dire need of improvement.</p><p>In response to this, MixMarvel has proposed a 3-layer framework in the hopes of providing a new valuation methodology as well as a better method of discovering the potential of digital assets associated with the NFT, so as to help maintain and enhance the current NFT values.</p><h2 id="header-2">The 3-Layer Framework</h2><p>As proposed by MixMarvel in 2020, the 3-layer framework consists of the NFT’s intrinsic value, functional value, and social value (or premiums), all of which contribute to the evaluation and appreciation of the asset’s total worth. Explained by formula, NFT Value = Intrinsic Value + Functional Value + Social Value.</p><h3 id="intrinsic-value">Intrinsic Value</h3><p>The intrinsic value refers to the value that is natively bound or held by the NFT. As the name implies, it is often determined intrinsically before the NFT is produced or created.</p><p>The intrinsic value of an NFT is defined by several factors. The first is the creator’s popularity, as an NFT produced by a world-renowned artist or an established IP creator will undoubtedly have a larger market base and a higher underlying value. The second is the NFT’s own quality, which is determined by not only its aesthetics (as artworks have always been) but also its rarity and tradability on the chains.</p><p>When applied to Web3 games, the intrinsic value of in-game NFTs mainly comes from the investment made by the players. For example, the money being spent on purchasing weapons and the time being spent on developing new strategies would all contribute to a higher intrinsic value of the NFT items.</p><h3 id="functional-value">Functional Value</h3><p>The functional value is derived from owning or using it. To put it simply, it refers to the NFT’s usability, i.e. how the NFT can be used or consumed by the owners in various scenarios.</p><p>For instance, some NFTs may bestow certain privileges on the owner, such as exclusive event access, early access to Web3 projects, voting rights over important decisions, and so on. Other NFTs may show strong earning ability, allowing the owners to stake, create derivatives, or make resales in the secondary market.</p><p>For Web3 games, the functional value of in-game NFTs is enhanced by their diverse application scenarios, such as their ability to level up the in-game character or to add bonus points during PVE/PVP gameplays.</p><h3 id="social-value">Social Value</h3><p>The social value, or the premiums, is influenced by external perceptions and social appreciations of the NFT and is subject to great uncertainty.</p><p>An NFT's social value can be influenced by its symbolic or implying meaning. It is also easily susceptible to the perceived social status of its owner. A recent example is BAYC (Bored Ape Yacht Club) and the sensation it aroused among celebrities (most notably the NBA players). Following its recognition as a symbol of status, the BAYC has attracted an absurd number of celebrities who value such recognition to purchase NFTs, resulting in the rapid growth of their social value in a very short period of time.</p><p>And in the context of Web3 games, the social value of in-game NFTs is enhanced by the IP development or co-creation, the recognition by a large audience even outside of the game, and the emotional connection between the player and the games.</p><h2 id="header-3">The Web3 Game as an Optimal Framework Vehicle</h2><p>From the perceptions and illustrations presented above, it’s not hard to see that Web3 games make excellent vehicles for the 3-layer framework of NFTs because they are capable of forming all three value dimensions and forming them well.</p><p>Furthermore, dubbed as the “experimental field” by the blockchain industry, Web3 games ensure both a predictable large user base prior to launch and unlimited extensibility in the future. With games’ rich application scenarios and asset categories, it is anticipated that a comprehensive set of NFT value systems can be established and the true value of Web3 games can be uncovered.</p><p>In fields beyond Web3 games, the 3-layer framework is also expected to shed light on assessing and increasing the value of their own NFT projects, shaping a future where more and more people are willing to create, buy, sell, and swap NFTs in a stable and flourishing market.</p><h2 id="header-4"></h2><h2 id="header-5">About MixMarvel</h2><p>MixMarvel is the world's leading blockchain content-incubation platform and creators community. By in-depth exploring the open world and integrating world-renowned IP with high-quality content, MixMarvel connects investors and mass users through asset distribution, content publication, DeFi tools, infrastructure, community co-creation, and other diversified scenarios in a new ecosystem of dapps. Its ecosystem comprises a broad portfolio of FT/NFT assets, including the MIX, RPG, and HEROES tokens; blockchain content, including the GameFi application DeHero; and infrastructures, including Rangers Protocol and MixMarvel SDK. For more information, visit<a href="https://linktr.ee/MIXMARVEL" rel="noopener noreferrer nofollow"> https://linktr.ee/MIXMARVEL</a>.</p>

NFT Evaluation and Value Appreciation: A 3-Layer Framework

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