NFTs Unsuitable as Equity Instruments
Duncan Cock Foster, co-founder of Nifty Gateway, on NFTs as luxury goods
This failed because equity works best when every unit is interchangeable, while an NFT makes every unit its own little market. A normal share can trade instantly against a deep pool of identical shares, but an NFT equity stake has to be priced one by one, with different traits, histories, and buyer demand. That destroys liquidity, makes price discovery messy, and turns a financing tool into a collectible market.
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The same mismatch hurt membership NFTs. A gym, club, or creator business usually needs monthly or annual payments to keep funding staff, content, and upkeep. A lifetime NFT pass gives cash up front, but it cuts off the recurring revenue stream the business actually lives on.
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The market learned this the hard way in 2022 through 2025. Broad NFT platforms had depended on speculative use cases like pseudo equity and tokenized access, while dedicated art platforms held up better as buyers kept treating NFTs more like collectibles than financial instruments.
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Exchange run NFT marketplaces were a useful real world test. Coinbase began sunsetting its standalone NFT marketplace on July 10, 2024, and Kraken put its NFT marketplace into withdrawal only mode on November 27, 2024, showing how weak trading demand became once the financialized thesis broke.
Going forward, tokenized ownership is more likely to use fungible rails that look like ordinary securities, while NFTs remain strongest where uniqueness is the point, in art, luxury goods, and collectible status objects. The divide is simple. Financial claims want sameness and liquidity. Cultural objects want scarcity and distinction.