LimeWire Partners With Algorand To Get a Slice of the Multi-Billion Dollar NFT Market
Former P2P file sharing platform LimeWire has been relaunched as a digital collectibles marketplace running on the Algorand Blockchain. LimeWire has launched an NFT trading platform for music and art projects and collectables. The marketplace plans to be a one-stop shop for creators to buy, sell, and trade works, and it expects to have over one million unique users by the end of the first year after launch. The LimeWire team also aims to launch a web3-type token later in 2022, to provide exclusive community access, voting, and a reward system for their token holders. LimeWire’s early stage emphasis on selling artwork and music reflects their growing importance in the global NFT market. According to data from Cryptoart.io, the total market capitalization of NFT art projects has surpassed 800,000 ETH, worth more than $2.1 billion, at the time of writing.
The wider question is how will this affect the NFT market? The market has grown in popularity as blockchain technology has developed, with data from DappRadar showing that trading in NFTs reached $22bn in 2021, compared with $100m in 2020. LimeWire’s announcement also reflects the momentum in the industry right now, with Yuga Labs raising $450 million from top US VC a16z, the purchase of the CryptoPunks IP, and the launch of the new ApeCoin. No wonder that top NFT holder Punk6529 in a revealing interview with Laura Shin asserted that, “there will of course be over the next few years, multi 100 million dollar brands formed in the NFT world, right? Did I say million or billion, I meant billion.”
LimeWire was well known from 2000 to 2010 as a free software peer-to-peer file sharing (P2P) client, before it was shut down in 2010. LimeWire creator, Mark Gorton, is reported to be unhappy at the news as the new LimeWire project has absolutely nothing to do with the team that originally developed the file-sharing software. They just happen to share the same name. “I am not thrilled about an unrelated group of people using the LimeWire name. Using the LimeWire name in this way creates confusion and falsely uses that brand that we created for purposes for which it was never intended,” Gorton told TorrentFreak.
Blockchain energy-saving technology
Because of the extremely high carbon emissions, cryptocurrencies are becoming increasingly popular. However, many environmentalists have criticized cryptocurrency mining. One of the reasons LimeWire chose Algorand as a partner is because it is one of the most energy-efficient blockchains. In addition, Algorand pledged last year to be a pioneer in the blockchain space for sustainable development by collaborating with ClimateTrade, a leader in carbon dioxide emissions traceability. The stated goal of Algorand is to provide users worldwide with the most secure proof-of-stake blockchain network while minimizing environmental impact.
Improving user accessibility
Paul Zehetmayr, LimeWire Co-CEO, admitted the biggest challenge with NFTs and the crypto market in general is that it’s still limited to a relatively small group of ‘savvy users’. Plus, the fact that despite platforms like OpenSea and LooksRare the entry barrier is still too high for mainstream adoption.
“If you are an average music fan on the internet, you might not own any cryptocurrency or have access to a crypto wallet, let alone understand the mechanics of collectibles on the blockchain. We want to remove all those obstacles and make it easy for people to participate, while at the same time offering an exciting platform for crypto natives,” Zehetmayr confirmed. Music fans and collectors will be able to buy and trade a rich variety of music-related assets on LimeWire, such as limited editions, pre-release music, unreleased demos, graphical artwork, exclusive live versions, as well as digital merchandise and backstage content. “On LimeWire, the artist always receives the majority of all earnings, retains full control and ownership of their content and is entitled to receiving royalty payments even when their collectibles are traded further down the line in the secondary market,” ‘new’ LimeWire CEOs Julian and Paul Zehetmayr informed TorrentFreak.
Trading activity declines
The recent sluggish trading volume in the global crypto market has impacted the trading volume of the NFT market. According to Non-Fungible.com data, the global turnover of NFTs exceeded $160 million two weeks ago, but the global turnover of NFTs in the most recent week was only $63 million. In addition, OpenSea, the world’s largest NFT trading platform, saw its average daily NFT trading volume drop by more than 80% to $50 million in March, down from $284 million in February. Many in the industry believe this is due to the loss in confidence created by the decline in the cryptocurrency market, resulting in the sale of many NFTs. As the investor saying goes, sentiment follows the market, the market does not follow sentiment.
The decline in the market value of the NFT market also correlates to the recent uncertainty and political turmoil in the global financial market. Furthermore, the drop coincides with US regulators’ increased scrutiny of the crypto industry, with legislation likely following the recent US crypto Executive Order. The US agency responsible, the Securities and Exchange Commission (SEC) has reportedly also started to investigate whether NFTs are in fact securities and should be regulated and no doubt taxed as securities. It’s possible in the short-term that this series of regulatory and macro market changes have resulted in a gradual cooling of the NFT market.
It may be that art and music related NFTs do continue to grow in popularity in 2022, but it’s also worth recalling the words of Cointelegraph’s Tom Farren in our recent expert panel discussion when he added a cautionary note for investors: “We are going to see a transition away from art orientated NFTs. I think you’re gonna see NFTs as the digital passport to like an array of Metaverse worlds, in online experiences, anything that you would have in the real world, and, but it’s going to be in a digital format. And I think, in 2022, I think authenticity is going to be key.”