Are NFTs Dead?
Controversial subject, we know. However, statistics don’t lie and we’ve been delving into the numbers to find out if NFTs really are dead.
It’s the middle of 2021 and NFTs are booming, the dominant chain for trading is, of course, Ethereum and the only place to trade NFTs is OpenSea. Fast forward to today and OpenSea has all but collapsed in terms of trading volume, and there are now multiple blockchains fighting for NFT dominance.
At it’s peak throughout 2021/2022, OpenSea captured around 90-100% of all NFT sales volume, with the market regularly exceeding $1B in transactions per day - they sat back and earned a cool 2.5% of that trading volume every day.
Not much changed until October 2022, when the upstart NFT marketplace Blur launched. The difference with Blur? They didn’t impose trading fees at all and rewarded traders for using their platform with their native token $BLUR. Couple that with a simple, trader friendly user interface and advanced features such as aggregated “floor sweeping” across multiple marketplaces, fast "snipe reveals" and portfolio analytics tools, Blur quickly became a favorite among fast-paced traders looking to get the best deal and maximize profits. By February 2023, Blur had captured more than 80% of daily NFT trade volume.
OpenSea had no response, and has since continued to loose more and more of it’s market share. Today OpenSea only deals with about 8-10% of NFT daily trading volume.
Everything was looking rosy for Blur, but they hadn’t accounted for one thing.
In removing trading fees from their platform, and therefore making it an NFT industry standard, they had also made royalties for NFT creators optional. This was great for pro-traders, maximizing profits on every trade, but for the industry as a whole it was catastrophic.
Previously, those that had made NFT collections received Creator Royalties on every trade, with most collections sitting somewhere between 5-10%. In making this optional, Blur had unwittingly removed any reason for people to create NFTs.
As you can see from the above charts, as Blur peaked in trading volume the total sales count and newly minting projects dropped dramatically.
Of course, while hugely significant, Blur isn’t the only factor that caused a drop in NFT sales volumes. In early 2023 the cryptocurrency market was just recovering from a deep pull back, with Bitcoin sitting at around $25,000 from previous highs of over $60,000.
NFT sales have crept up to around $200-300M per day across multiple blockchain networks in recent months, marking a significant uptic from lows of around $50M per day in 2023.
So, are NFTs dead? Definitely not.
In fact, there is a strongly bullish outlook on the future of NFTs. It may look different, and whilst there is always room for NFTs as art pieces, perhaps rather than hyped profile picture collections of apes, lions or penguins, we’ll see utility use cases for NFTs such as asset backing, counterfeit prevention and maybe even securing real estate.
