Is NFT Token the Next Big Alpha in Crypto?

Non‑fungible tokens never really left; they evolved. After the speculative boom of 2021–2022, builders spent a cycle fixing costs, throughput, and liquidity. Now a new question matters for 2025: are “NFT tokens” — fungible representations of NFT exposure, plus token‑centric distribution around NFT ecosystems — the next big alpha in crypto?

This piece breaks down what “NFT token” can mean, why the market structure is different this time, where opportunity may lie, and how to participate safely.

What does “NFT token” actually mean?

• Fungibilized NFTs: Mechanisms that turn illiquid NFT exposure into ERC‑20‑like tokens — think fractionalization or hybrid standards that blend ERC‑20 and ERC‑721 semantics. This unlocks liquidity, composability, and perps/AMMs for previously non‑fungible assets.
• Ecosystem tokens: Fungible tokens tied to NFT marketplaces, gaming worlds, or creator economies that accrue value from NFT activity.
• Bitcoin culture → fungible tokens: Inscriptions primed a cultural base; now Bitcoin’s native token standard for fungible assets, Runes, adds a token layer many NFT collectors already understand.

The bet: NFTs don’t just stay pictures — they become liquid, tradeable, composable exposure that can ride broader crypto cycles.

What changed since the last cycle

• L2 costs collapsed: Ethereum’s Dencun upgrade brought blobspace and materially cheaper L2 data availability, making high‑volume mints and NFT‑heavy apps more viable on rollups. See the Ethereum Foundation’s summary of Dencun on mainnet for why this matters for throughput and UX. (Reference: Ethereum Foundation on Dencun)
• Solana’s compressed NFTs: State compression enables minting at internet scale with drastically lower costs, opening the door to consumer apps, loyalty, and gaming assets. (Reference: State Compression and compressed NFTs | Solana Docs)
• Bitcoin Runes: Launched alongside the 2024 halving, Runes is a native fungible token protocol for Bitcoin that inherits Bitcoin’s settlement assurances while tapping into inscriptions’ cultural momentum. (Reference: Bitcoin Optech on Runes)
• Distribution primitives: Onchain social and “actions” (e.g., Farcaster Frames) compress the distance between discovery and transaction, a powerful funnel for NFT‑adjacent tokens. (Reference: Farcaster Frames)

These changes shift the opportunity set: NFTs can be cheaper to issue, easier to move cross‑chain, and more naturally expressed as fungible positions for traders and treasuries.

The mechanics turning NFTs into “tokens”

• Fractionalization and hybrid standards

  • Classic fractionalization wraps an NFT into ERC‑20 shards. Liquidity then sits on AMMs. This is battle‑tested but can splinter community alignment.
  • Hybrid standards like DN‑404 aim to natively blur the fungible/non‑fungible boundary, letting NFTs trade in fungible pools while preserving unique ownership semantics at lower granularity. These are experimental — audit and governance risks remain. (Reference: DN‑404 reference implementation)
  • Baseline standards still matter for composability; EIPs define capabilities and constraints. (References: ERC‑721, ERC‑1155)

• AMMs and orderbooks for NFTs

  • NFT AMMs like sudoswap introduced pool‑based liquidity, making it feasible to quote two‑sided markets for floor assets and, increasingly, traits. (Reference: sudoswap docs)
  • Lending and perps extend the stack. Blur’s Blend popularized peer‑to‑peer NFT borrowing against floor assets; NFT‑backed credit creates reflexivity in both directions. (Reference: Blend announcement)

• Bitcoin tokens with an NFT‑native audience

  • Runes formalizes fungible tokens on Bitcoin, creating a liquidity surface for memecoins, culture coins, and potentially utility tokens that NFT communities can understand and mobilize around. Expect volatility and evolving indexers/tooling. (Reference: Bitcoin Optech on Runes)

Where the next alpha may emerge

• Infrastructure that “fungibilizes” attention

  • Protocols standardizing fractional/ hybrid NFT tokens, plus NFT AMMs, perps, and credit rails, can capture fees and order flow if they nail UX and security.
  • Indexing and bridging for NFT tokens across EVM, Solana, and Bitcoin will likely see sustained demand as liquidity unifies.

• Distribution flywheels

  • Consumer mints via Solana compressed NFTs and cheap L2 mints on Ethereum can drive orders of magnitude more on‑chain actions. Tokens that align creators, marketplaces, and users — with programmable rewards rather than vague “points” — may outperform.

• Bitcoin cultural liquidity

  • Runes are a magnet for speculative flows; projects that convert episodic mania into durable communities, fair supply schedules, and tools may compound attention into value. Be hyper‑selective: memetic strength without mechanics fades fast.

• Gaming and UGC

  • Game assets are native NFTs; turning those economies into liquid tokens with sane sinks/sources, clear IP, and on‑chain verifiability could finally close the loop between players, creators, and markets.

None of this is guaranteed alpha. It’s a map of where risk‑adjusted experimentation looks most interesting.

Risks to respect

• Smart contract and standards risk

  • Hybrid standards are new; upgrades, transfer hooks, and edge‑case accounting can break. Review audits, upgradability, and escape hatches.

• Liquidity fragmentation

  • Multiple chains and standards splinter pools. Without canonical bridges and unified routing, slippage and price discovery can be noisy.

• Wash trading and inorganic volume

  • Incentive programs can inflate metrics. Chainalysis has documented how wash trading distorts NFT markets; treat volumes and top buyers with skepticism. (Reference: Chainalysis on NFT wash trading)

• Regulatory uncertainty

  • Tokens entangling revenue or cash‑flow rights may cross securities lines in some jurisdictions. Structure and disclosures matter.

A practical playbook

• Prioritize primitives, not promises

  • Favor protocols enabling liquidity (AMMs, lending, metadata standards, cross‑chain indexers) over opaque roadmaps. Standards and infra collect durable fees if they become default pathways.

• Read the on‑chain tea leaves

  • Track unique minters, secondary sales to unique wallets, loan health ratios, and time‑to‑liquidity for new collections. Watch allowance patterns and router usage to gauge real demand.

• Demand credible distribution

  • User acquisition via Frames, embedded mints, or wallets with organic reach beats paid hype. Ask how distribution becomes compounding, not one‑off.

• Treat approvals and signatures like production deployments

  • Use per‑site wallets and regularly revoke stale approvals. Tools like revoke.cash make this trivial. (Reference: Revoke approvals safely)

Security first: cold storage for a hot market

If you’re actively experimenting with NFT tokens, split your stack:

• A hot or browser wallet for testing, minting, and small positions.
• A hardware wallet for long‑term holdings, high‑value NFTs, and ecosystem tokens you intend to keep.

OneKey is designed for this exact workflow: multi‑chain support across Bitcoin, Ethereum, and Solana, hardware‑isolated private keys, and seamless connections to dapps via WalletConnect. That means you can mint or trade from a hot wallet and transfer settled positions to OneKey for cold storage — or sign high‑value transactions directly with a physical confirmation step. (Reference: WalletConnect)

Outlook for 2025

NFTs are converging with fungible token markets. Cheaper blockspace, better liquidity rails, and Bitcoin’s token layer expand the design space. The big alpha — if it exists — will likely accrue to teams that:

• Make NFTs liquid without losing their cultural soul.
• Turn distribution into compounding community ownership.
• Ship risk‑managed, auditable contracts that other protocols can safely compose with.

Approach with curiosity, skepticism, and sound key management. If the next leg of crypto is culture‑as‑capital, NFT tokens may be the bridge between the two.