According to Finder, Vietnam is one of the five countries with the highest NFT ownership rate globally, up to 17% of the population. This Southeast Asian country is also home to the most prominent NFT startups in Asia and even the world. Then should you invest in the NFT market in Vietnam?
What is NFT? Why is everyone talking about it?
To put it simply, NFTs (Non-fungible token) are digital assets that represent tangible or intangible items, built on existing or newly-created blockchain networks. They can be a digital representation of anything from artwork, songs, and game items to real estate or hotel reservations. Unlike cryptocurrencies with fungible features, each NFT has a different encoding, rendering its denomination dependent on the limit and uniqueness of each item.
For example, you spend some money to buy a new piece of artwork from an artist in the form of NFT. Immediately, you will receive a certificate file approving that you and only you now have the ownership to this digital work. You have the full rights to use this NFT and may resell it for a price you consider appropriate, just like a standard physical artwork.
Although NFTs have been around since 2014, along with the development of blockchain and cryptocurrencies, it is only in the last few years that this type of digital asset has exploded in popularity, especially in the field of arts and entertainment. Recently, the NFT market has witnessed the participation of many artists from various fields, from amateur to professional, and a variety of high-value digital works. In particular, the NFT work named Everydays: The First 5000 Days by American digital artist Beeple was sold for $69.3 million in 2021. At the same time, the market also has the participation of many “big names” in the technology industry and many prominent fashion and sports brands such as Adidas, Gucci, and Louis Vuitton.
The rise of NFT in Vietnam
Despite its status as a developing country, Vietnam’s NFT trading sector remains active and catches up to other countries in the region. With the release of the global success NFT game Axie Infinity, the Vietnam NFT market gradually expanded into other fields like art, entertainment, real estate, and tourism.
Axie Infinity is a Vietnamese NFT game developed by Sky Mavis, a game studio based in Ho Chi Minh City in 2018. According to CryptoSlam, this game has become the first NFT series to reach $4 billion in revenue, and the total Axie Infinity market capitalization is now approximately $1.4 billion. In simple terms, Axie Infinity players will buy NFTs of adorable creatures and then put them against one another in combat. During gaming, players may earn tokens that can be traded for fiat money on an exchange.
In addition to games, a few Vietnamese artists have also uploaded their works on NFT platforms and reaped substantial profits.
Xeo Chu, a 14-year-old artist, sold a painting called “Hoa mai may man” (Lucky Apricot Flower) for up to $23,000. Binz, a well-known rapper, also released an NFT collection for his new song “Don’t Break My Heart” in mid-March of this year.
This song’s copyright is split into NFTs with four distinct classes, corresponding to four different revenue copyright share rates. Musician Nguyen Van Chung has also applied a similar revenue-sharing form through NFT to his 200,000-subscribed Youtube channel.
Several other industries also have their own projects and plans on NFT. In addition to NFT projects to partition real estate for joint purchase, the tourism sector has established an NFT travel platform named Crystabaya that allows users to buy, sell, and trade bookings.
Although NFT projects have only proliferated recently, and many are still in the developing phase, the NFT trading market in Vietnam has been very active as a significant number of people participate in NFT gaming. Along with that, several people are spending money to acquire NFT items and sell them for a profit.
Opportunities and challenges of NFT market in Vietnam
Blockchain is a priority technology area: In Decision No. 2117 of the Prime Minister of Vietnam in 2020, blockchain technology (the basis of NFT) is one of the sectors on the priority list of research, development, and application. On May 17, the Vietnam Blockchain Union was established as the first formal legal body specialising in blockchain technology.
Lots of room for development: Vietnam has seven firms among the top 200 blockchain companies in the world. In particular, Vietnam is in the midst of a digital transformation process, and some technologies, such as blockchain and NFTs, will offer a good start for the future process if applied early on.
Many potential NFT projects: Billions of dollars have been raised and profited through blockchain-based games like Axie Infinity and finance apps like Coin98 Finance. Along with that, a series of projects and NFT exchanges are being planned and developed in the Vietnamese market, attracting many foreign investors.
No specific laws and regulations on NFTs and cryptocurrencies yet: Despite being a priority field, there are presently few, if any, laws or regulations governing blockchain and NFT in Vietnam. All NFT trading actions are not legally protected, and you must bear all consequences if there is a problem.
Pump and dump schemes in some NFT projects: With the weak regulatory framework in Vietnam and the easy creation of NFTs, multiple NFTs can be created just to trade back and forth between certain wallets to create artificial value and solely generate profits for their creators.
Lack of infrastructure and human resources: According to the report of Navigos Group, Vietnam lacks an abundance of high-credential blockchain professionals. Furthermore, organizations are increasingly focused on application development, implying a restriction in infrastructure for developing blockchain projects. This can create barriers to market growth as well as increase the danger of cyber attacks.
Should you invest in the Vietnam NFT market?
According to a recent analysis by the Markets and Markets research organization, blockchain-related businesses in Vietnam are predicted to reach approximately $2.5 billion by 2026, more than five times the value in 2021. This demonstrates, in part, the immense growth potential of the cryptocurrency and NFTs sectors in Vietnam.
Moreover, a survey conducted in Southeast Asia by Statista and Milieu (November 2021) has pointed out that 68 percent of Vietnamese respondents expect the value of NFTs would improve in the next five years. This is also the most optimistic figure among the six nations studied, including Indonesia, the Philippines, Thailand, Malaysia, and Singapore.
With the growing demand for NFTs and the development of many potential blockchain projects, Vietnam is an attractive location for you to invest in NFTs, especially in the long term. Along with it, government backing is a driving factor for stable and long-term growth in this sector.
However, to invest in an area not yet protected by the law, you must also prepare yourself with a good understanding of how blockchain works, as well as the local cryptocurrency and NFT markets. From there, make investment plans and scenarios suitable for your financial ability and risk appetite.
Some of the most potential Vietnam NFT projects in 2022
Aura Network is an NFT-specific blockchain technology platform built on the Cosmos ecosystem. Aura Network offers an open system, improves NFT interoperability across various blockchain ecosystems, and builds an infrastructure layer that integrates NFT into Metaverse.
Aura Network has recently received funding with a capital flow of 2.5 million USD in a seed round with the involvement of various well-known blockchain investment funds.
ASPO World is a blockchain-based startup that develops tactical mind games, and it has introduced players to a world of 3D graphics with a character system based on the Japanese style.
This NFT game development startup has raised investment capital of up to 3.5 million USD after more than four months of project implementation. The ASPO token trade volume has hit approximately 24 million USD (according to CoinMarketCap figures) just one day after its initial listing. The total trading volume is expected to have exceeded $1 billion.
Similar to ASPO World, Poriverse is an NFT game development startup that belongs to the play-to-earn game model that allows users to play games for money. A unique feature of Poriverse is that game players are allowed to rent or borrow NFT (characters, in-game items) to join the game instead of spending a large amount of up-front money to make the first purchase like in other games. All these transactions are done publicly and are secured by blockchain technology.
In March 2022, Poriverse just announced the establishment of a strategic partnership with the branch of Polygon (MATIC), one of the world’s leading Blockchain platforms. Previously, this game has raised $600,000 from global investors.
To summarize, NFTs and Blockchain are relatively new areas in Vietnam, yet they offer significant development potential and investment prospects. If you still have questions regarding the NFTs market, contact Viettonkin for the most up-to-date and reliable information. Viettonkin and our team of specialists have over 12 years of expertise in the sectors of investment and business consulting. Contact us now.