Navigating the adoption of NFTs

2021 was a banner year for NFTs, as they skyrocketed into the mainstream and captured significant mindshare. The world’s first-ever digital artwork sold for a record sum in the tens of millions, and institutional adoption continued with a global payments and banking giant acquiring CryptoPunk NFTs.

Household brands started to participate in the space; more than 15 corporate NFT collection releases across many industries were observed, ranging from food and beverage, sporting goods, high-end luxury fashion and consumer retail to social media and news companies. And OpenSea — the world's first and largest NFT marketplace – continues to stand as the preferred launchpad for corporate NFTs.

Although the current bear market has led to concerns about the value of NFTs, profit-based motivation and issues of environmental sustainability, these may be reflective of periods of volatility and cyclicality expected with any nascent technology as it develops a product-market fit.

The ability to assert ownership and exchange of Web3.0 assets and property is what will likely dictate the long-term value of NFTs.

The following guide aims to help you understand the emergence of the NFT industry, recent trends, institutional adoption, key challenges and how KPMG can help organisations throughout their digital asset journey.

Governance: how NFT rights, licensing, purchases and sales are monitored and governed across customer community to protect and preserve an organisation’s brand

Financial reporting: defining the reporting needed, including royalty reporting to artists, when NFTs change hands

Contracting: defining future contractual requirements and rights to enable NFT minting/selling

Data: defining what data is needed to support the NFT initiative

Talent: attracting the talent needed to support and maintain the NFT lifecycle within an organisation​

Enabling technology: defining platforms, internally and externally, to support the NFT initiative