What does the Ethereum 2.0 Merge mean for NFTs??

Hey friends,

Thanks for joining us on this edition of Morning NFTea! We've got a good round-up of developments from the upcoming Ethereum merge to a new OpenSea Policy aimed at reducing scams, so let's get into it!

OpenSea New Stolen NFT Policy

Its no doubt that NFT scams have plagued these early days of Web3 as it's hard to go by without hearing about a discord getting hacked or someone getting phished, and one of the important pieces of this puzzle has been identifying and managing stolen assets. OpenSea has been the largest NFT marketplace with over 80% market share as of February 2022 (forkast, 2022), and hence has been at the forefront of NFT scams, but its policy of blocking flagged assets from resale has received large backlash from the community as it punished users who bought the NFT in good faith. The previous policy had OpenSea blocking stolen assets from any transaction on its platform, which would freeze its value to unsuspecting holders. It is against US law to knowingly allow the sale and transfer of stolen items, and so @OpenSea has just announced via Twitter Thread it will require a police report to be submitted within seven days of flagging an NFT as stolen, for all NFTs that are reported stolen. This move also allows OpenSea to target false reports against innocent holders where buying & selling will be re-enabled for reported items with no police report. The new policy will make it easier for users to re-enable transactions after recovering the item, or for the stolen item report to be withdrawn. The new policy comes off the back of MetaMask's new security update on transaction transparency, and Dubai's Virtual Assets Laws, showing a pattern that Web3 is being made safer and easier for everyone.

NRL Launches First NFT Jersey

You may know the NFL or NHL, but if you haven't heard of the NRL its the National Rugby League, which happens to be Australia's 2nd most watched sport (men.au, 2022), and now one of the Australian leagues teams is launching the first “NFT jersey”. @NRL_Bulldogs have had a strong history of producing unique physical collectible jerseys such as the past Star Wars or Avatar jerseys, so a digital NFT version comes naturally and is able to let the NRL reach new corners of the globe. Aaron Warburton, CEO of the Canterbury Bulldogs, said, “Launching this jersey with a Bulldogs membership is fantastic and will undoubtedly grow our supporter base across the USA, Europe, and Asia. Kieran and his team are making this momentous occasion extra special by providing a complimentary Illuvium NFT”. Illuvium, a sponsor for the team had recently hit headlines for selling 20,000 digital land plots in a three-day event totaling a value of $72 million USD, making it one of the most successful NFT launch sales in history. Purchasing the Bulldogs NFT jersey allows the holder to access a free in-game NFT in the Illuvium role-laying world built on the Ethereum blockchain. All in all, you may not watch the NRL, but an Australian rugby team taking steps into Web3 shows future adoption of NFTs could be done in all types of industries.

The Ethereum Merge

The long-awaited Ethereum Merge has recently topped headlines due to a D-day being announced for mid-September, according to a prominent member of the blockchains community. Anthony Sassano co-founded the Ethereum research website EthHub, and said via Twitter on Thursday that “The Ethereum main net merge has been tentatively scheduled for around September 15th/16th”, he added that the news came from a call with core Ethereum developers. The upgrade will complete Ethereum's move to a proof-of-stake consensus mechanism, which was originally expected to take place near the end of September. Proof-of-stake will eliminate the need for miners, where validators will take their place and compete in order to gain the rights to produce the next block, and requires some of the underlying assets to be staked in order to participate in securing the network. But, the most important difference, is the 99.95% reduction in power used to secure the network. So what does the merge mean for NFTs? First of all, one of the lead arguments against NFTs is the energy use involved, but after the merge making ETH greener, faster, and slightly cheaper, users will finally be able to mint and sell NFTs in a sustainable setting. Another important aspect to note is how this new network will help facilitate the NFT-run Metaverse and Play 2 Earn gaming world that we are always hearing about. There has also been discussion on the NFT battles between Ethereum and the growing Solana and Polygon platforms that have used this staking feature for their advantage up to this point, but these benefits will now also be available for Ethereum NFTs. The merge has kickstarted price interest in ETH as we see an 80% increase over the past month as of writing, so as new users flock to this new Ethereum and its popularity rise, we could potentially see NFT popularity also increase. 

That's it for this edition, come back in a couple of days as the next stories develop, but until then, take care and we will refill the tea!

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DISCLAIMER: 

None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.