Adobe Inc. (ADBE), an American developer of multimedia and creativity software products, is scaling its presence in the NFT market. The company supports the creative economy by meeting the demands of every professional, marketer, knowledge worker, application developer, business, and consumer when it comes to generating, managing, monitoring, optimizing, and interacting with engaging content and experiences. Adobe’s major industry-standard photo, design, and video creation products are Photoshop, Premiere Pro, After Effects, and Lightroom. With its Content Credentials features, the company now plans to leverage on the digital art trend, as well as collaborate with Polygon to integrate Ethereum scaling into its Behance social media platform. Many investors who are interested in the latest technological developments such as NFTs and cryptocurrencies are focused on young companies that are yet to prove their worth, when in reality, well-established Adobe Inc. offers exposure to these fast-growing market segments.

The Digital Art Software Market To Generate Massive Revenue In Coming Years

Adobe has long been a leader in the creative software market, having pioneered the concept of digital art. Adobe Illustrator, a vector graphics editor and design program originally built for the Apple Macintosh, was one of the company's first commercial apps. Adobe is gradually expanding its Creative Cloud Space by adding new support features for creators, as the creator economy is growing faster than ever thanks to the rising popularity of NFTs and the introduction of Metaverse. On October. 26, 2021, the company announced the launch of Content Credentials, a new program that links creator attribution details with an NFT image in Photoshop. Earlier, Adobe co-founded the Content Authenticity Initiative in collaboration with a few other tech giants in 2019 to combat visual misrepresentation by offering technology to verify content authenticity. It was designed to assist users in determining if a piece of media posted to a website was edited by an authorized member or an unknown third party. The same technology is used by the company for NFT pieces generated with Adobe products. This tool, which is currently in beta testing for Photoshop users, is aimed at helping users determine the original creator of digital content. The "Prepare as NFT" option will be available to all Adobe Creative Cloud customers soon, and it will include a signature that verifies the new NFT pieces as unique and will collect identity data and keep it as metadata for every content that is created and edited in the Creative Cloud software, allowing buyers of NFT artwork to see not only who minted the NFT, but also who created it.

The creator economy, one of today's fastest-growing business segments, is transforming the way creative individuals make a living, thanks in large part to opportunities provided by social media and Web 2.0. NFTs have profoundly altered the digital asset market by allowing creators to build their online communities. The Bored Ape Yacht Club, for example, began with a series of private chat rooms and a graffiti board and has since then expanded to include high-end products, social events, and even an actual yacht party. Because of the popularity of NFTs, many businesses are evaluating how they can participate in this young and fast-growing industry. According to market tracker DappRadar, NFT sales reached $25 billion in 2021, with artwork ranking third after collectibles and utility.

Exhibit 1: Quarterly NFT Sales In USD Billions

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Source: DappRadar

Exhibit 2: Daily NFT Sales

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Source: NonFungible.com

Adobe’s refined creative tools are likely to play a massive role in the growth of the NFT market in the coming years, and the company is already emerging as one of the biggest winners of the NFT movement. In addition to the financial benefits associated with this favorable development, Adobe is also likely to attract above-average valuation multiples in the market as investors interested in these latest technologies will bid Adobe shares higher, attaching a premium to its stock price.

Adobe Partners With Polygon

In the last two years, the popularity of NFTs has grown in leaps and bounds but this has also resulted in an increase in the criticism of the technology stemming from the negative environmental impact. As much as NFT has played a critical role in the growth of the creator economy, there are greenhouse gas emissions associated with it. Given the negative impact of NFTs, there is a new market for carbon-neutral or low-emission NFTs. As countries are pledging to reduce their carbon impact, emerging technologies are required to assist in meeting the goal. Adobe has been aiming to reduce its carbon footprint and improve energy efficiency through strategic collaborations. By 2035, the company aims to achieve its RE100 goal, and the company promotes and works toward a low to no-carbon economy. Adobe’s debut in the NFT market could just be the beginning of a trend toward greener NFTs in the future.

Adobe announced a partnership with Polygon on March 9 to integrate Ethereum scaling into its Social Platform, Behance. Creators will be able to display their non-fungible tokens on the Behance platform while decreasing their carbon footprint and transaction fees. Artists can also use Polygon to create NFTs on the popular marketplace OpenSea, display the image linked with them on Behance, and direct people to OpenSea to purchase them. Adobe's recently announced "Content Credentials" tool, which allows creators to cryptographically authenticate their creative work, has already been adopted by OpenSea. Now, Polygon integration will be used as a more environmentally friendly approach for artists to make NFTs. The eco-friendliness of this initiative is still debatable, and it is part of Adobe's continuous crypto expansion, as well as a move to help artists concerned about the technology's possible negative consequences.

Polygon is built on top of the Ethereum blockchain, capable of processing up to 65,000 transactions per second. The platform has a smaller energy footprint for individual crypto transactions and fewer transaction costs associated with Ethereum. Polygon has over 7,000 DApps and more than 130 million unique users and it mints and transfers assets via an efficient Proof-of-Stake (PoS) consensus process, which substantially minimizes the network's carbon footprint. Minting a single NFT on Polygon emits roughly 66 grams of CO2, which is about the same as driving 0.26 kilometers.

Conclusion

Adobe’s partnership with Polygon is the next step in the company's mission to empower artists all over the world. NFT functionality was recently introduced to the creative cloud portfolio, allowing artists to upload their NFT-based creations directly to the platform. Since the launch of the NFT tool, thousands of Metamask wallets have connected to Behance. This is an ideal opportunity for Adobe, the leading digital creative platform in the world, to expand its NFT footprint. Polygon has gained popularity as one of the most widely used platforms for the NFT community because of its low fees and low carbon impact. With the strategic partnership with Polygon and the introduction of new tools, Adobe will be able to participate in the next generation of the creative economy, potentially creating billions of dollars in wealth for shareholders.