Navigating the Non-Fungible Token

$91.8 million, $69 million, and $52.7 million. These are the amounts associated with the three most sought after Non-Fungible Tokens (NFTs) sold in 2021. Although NFTs were first created in 2014, 2021 saw a massive rise in their global popularity. In fact, Google reported that in 2021, “How to buy an NFT?” was one of its most searched questions.

NFTs can alternatively represent a collectible, a financial instrument, or a permanent record associated with a person, physical or digital object, or data—each presenting an entirely distinct set of legal issues. The lack of governmental expertise in emerging technologies accompanied by the shortage of regulatory guidance has created a frustrating environment for innovators. Despite being one of the fastestgrowing industries in the world, there is a remarkable deficit in legal scholarship regarding these devices. NFTs, with their attendant blockchain and smart contract technologies, can create new paradigms around ownership and identification and inspire entirely new business models.

In addition to clarifying what NFTs are, this Article seeks to fill the gap in the literature by analyzing how the specific use of an NFT implicates different areas of the law. Examining the way NFTs function in sectors ranging from fine arts to finance, this Article suggests how tokenization law and policy must advance to leverage the incredible opportunities that NFTs present.