- The number of such NFTs minted has risen from around 500 to 1.2 million in the past year, according to blockchain analytics firm Nansen
- NFT Coin Mechanism Demographics Indicate Gradual Increase in Retail Participants
From Cool Cats to Jack Dorsey’s tweet, NFT sales hit $25 billion last year as the industry grew in popularity. But one in three NFTs ends up as “dead collection” with little or no trading activity, according to a report from blockchain analytics firm Nansen, released today.
The findings are based on observations of blockchain-based collectibles with fewer than 10 sell transactions in the last 30 days or those that no longer have a listing on a market.
While some market participants buy and sell digital artwork, others decide to hit it.
For the uninitiated, minting is the process of on-chaining an item, making it a non-fungible token (NFT). Participants typically mount NFTs via Ethereum, Polygon, or Solana, paying a fee to do so.
The number of such NFTs minted increased from around 500 to 1.2 million last year, driving 2,000 times market growth.
Additionally, one in three NFTs minted has a higher price floor than its initial minting cost. NFT coin changer profiles also show a gradual increase in retail or “non-whale” coin changers.
“The data shows a trend toward more affordable projects exceeding the initial strike price,” Paul Harwood, product manager at Nansen, told Blockworks.
“This suggests that the NFT market is maturing, with the most successful projects able to better connect with the communities and markets that underpin them.”
Since the beginning of the year, the amount of Ether spent on minting has gradually decreased, which could indicate a slight correction in the NFT market.
“Like all instruments in the market, I think NFTs will see a correction,” Kevin Kang, founding director of crypto hedge fund BKCoin Capital, told Blockworks.
“NFTs will not be immune to risk sentiment in the market, as mainstream art collectors tend to view NFTs as a riskier asset.”
OpenSea’s transaction and trading activity fell 67.2% and 23.31%, respectively, over the past month, according to blockchain data dashboard DappRadar.
Stephen Young, founder of the NFTfi marketplace, told Blockworks that “cash-grabbing projects will die” in NFTs, but despite bearish signals, the broader blockchain-based collectibles market will not.
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