When it comes to technology research and trends, South Korea is quickly becoming known as a leader. Reports have shown that Non-fungible token (NFT) adoption has soared in this small East Asian country.
South Korea was ranked among the top ten countries in the World Intellectual Property Organization’s Global Innovation Index as of 2020. That level of innovation is demonstrated to global retail consumers by tech giants such as Samsung and LG, as well as to gamers through Krafton, a game maker.
Those companies, and many others like them, are now venturing into the NFT space by releasing new collections to customers and launching divisions dedicated to developing NFTs.
There could be several reasons for the eagerness to introduce NFTs to retail consumers and the general public at large that go beyond simply being a thank-you prize for a purchase. Alex Lim, Strategy Lead at the Korea-based KlayChicken NFT project, proposed this idea. “NFTs are all the rage, but a lot of people don’t even know why.”
“The NFT hype in South Korea stems from a mixture of sentiments… I believe that in the second half of the year, the time will come when the whole South Korean NFT industry takes a quantum leap.”
One possible reason for this huge change is that there is no tax on digital assets in South Korea, which may have helped speed things up. The tax on crypto has been put off until 2023. President-elect Yoon Seok-yeol may push to put it off again for another year, to 2024.
Furthermore, NFTs are not as strictly regulated as cryptocurrency is now. Although the Financial Services Commission (FSC) is working to implement new NFT rules, none are currently in place. This has kept the market open for a slew of new marketplaces to emerge on exchanges like Upbit and Bithumb, as well as from corporations like gaming giant Krafton looking to profit from NFTs.
GM Chung, co-founder and CEO of DeSpread, a blockchain ecosystem accelerator based in Korea, believes that practical use-cases for NFTs will become more common in his country: “I expect NFTs to expand into a social on-chain profile layer along with transaction history in the future.”
“Previously, the phenomenon of purchasing NFTs for community participation was done, but recently, the expansion of NFT utilities is considered to be a major reason (for its rise in utilization).”
During his campaign, President-elect Yoon issued an NFT collection that supporters could mint to feel a sense of belonging to his cause.
Beyond participation, South Korea’s Hoseo University issued NFT diplomas to its 2,830 graduating students on March 18. According to the local news outlet Money Today, this decision is aimed to improve accessibility and convenience for students as well as prevent forgery of diplomas.
Chung may even be underestimating the utility NFTs provide to market participants. Last month, the Ministry of ICT, Science, and Future Planning announced a $187.7 million grant to support the development of a national Metaverse. The new grant is expected to benefit content creators the most.
Content creators seem to be benefiting from a rise in demand for their help in designing NFT designs for a wide range of businesses. A simple search for NFT on the most popular job search site, JobKorea, leads to 753 unique jobs for content creators and business professionals.
Those creators’ digital assets have typically taken the form of in-game items or characters, as well as emojis for text messaging apps. This familiarity with digital assets is why Doo Wan Nam, co-founder of crypto investment firm Stablenode, believes Koreans have embraced NFTs so quickly: “Koreans are more open and understanding when it comes to NFT which is another form of digital asset.”
Lim stated that content creators and businesses are now incorporating NFTs into their business plans because they recognize NFTs’ “potential and utility.” He went on to say that building a supportive community to boost brand power “has always been the inevitable, yet difficult task for any content creator.”
“NFTs have opened a new horizon for those who seek to materialize an ideal community where there is commitment, passion, and autonomy.”
