One in Three NFTs End Up With Little to No Trading Activity, Report Says

The number of minted profitable NFTs is increasing over time, while that of NFTs with little trading activity is gradually decreasing

article-image

Blockworks exclusive art by Axel Rangel

share

key takeaways

  • The number of those minting NFTs rose from approximately 500 to 1.2 million last year, according to blockchain analytics firm Nansen
  • Demographic data of NFT minters indicates a gradual rise in retail participants

From Cool Cats to Jack Dorsey’s tweet, NFT sales notched $25 billion last year as the industry surged in popularity. But one in three NFTs ends up as “a dead collection” with little to no trading activity, according to a report from Blockchain analytics firm Nansen, published today.

The conclusions are based on observations of blockchain-based collectibles with either fewer than 10 sale transactions in the past 30 days or those that no longer have a listing on a marketplace.

While some market participants buy and sell digital works of art, others decide to mint them.

For the uninitiated, minting is the process of putting an item on-chain — making it a non-fungible token (NFT). Participants usually mint NFTs via Ethereum, Polygon or Solana, paying fees to do so. 

The number of those minting NFTs rose from approximately 500 to 1.2 million last year — notching a 2,000 times growth in the market. 

One in three minted NFTs, additionally, has a higher trading floor price than its initial cost to mint. The profiles of NFT minters also show a gradual rise in retail or “non-whale” minters.

“Data demonstrates a trend towards more affordable projects out-performing the initial minting price,” Paul Harwood, a product manager at Nansen, told Blockworks.

“This suggests the NFT market is maturing, with the best performing projects able to connect better with the communities and markets underpinning them.” 

Since the beginning of the year, the amount of ether spent on minting has gradually declined — which could point to a slight correction in the NFT market.

“Just like any instruments in the market, I believe NFTs will see a correction,” Kevin Kang, founding principal at crypto hedge fund BKCoin Capital, previously told Blockworks.

“NFTs will not be immune to the risk-off sentiment in the market, as mainstream art collectors tend to see NFTs as a riskier asset.”

OpenSea’s transaction and trading activity plunged 67.2% and 23.31% respectively over the past month, according to blockchain data dashboard DappRadar.

Stephen Young, founder of marketplace NFTfi, told Blockworks the “money grab projects will die” in NFTs, but despite bearish signals the broader blockchain-based collectible market will not.


Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Tags

Upcoming Events

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Screen Shot 2024-05-16 at 14.53.45.png

Research

Loss-versus-rebalancing (LVR) is arguably Ethereum DeFi’s biggest problem, and thus reducing LVR is fundamental to the success of Ethereum. This report dives into the world of LVR. We uncover its importance for AMM designers, discuss the two major mechanism design categories and various projects developing solutions, and offer a higher level perspective on the importance of AMMs in general.

article-image

Yesterday saw Congress’ upper chamber side with the House on a measure aimed at overturning SAB 121

article-image

Oklahoma’s new crypto bill will go into effect in November of this year

article-image

The deposits hit a $20 million cap in just 45 minutes

article-image

Twelve Democratic Senators voted in favor to pass the resolution Thursday

article-image

Pump.fun is “aware” that bonding curve contracts on Pump.fun were exploited, and has since paused trading

article-image

Some investment pros are mulling crypto allocations between 1% and 10% and seeking ex-BTC exposure for interested clients