Casey Wagner

Bouncing back after months of declining prices and waning interest, NFT sales volume has started the new year off strong, data shows.&nbsp;



In the week ending Jan. 7, NFT sales increased by 26%, led by frontrunning project Bored Ape Yacht Club, which saw a 53% week-over-week increase, according to <a href="https://www.cryptoslam.io/" target="_blank" rel="noreferrer noopener">data</a> compiled by CryptoSlam. 



Ethereum was the most popular blockchain by sales volume, accounting for $164 million of the total $209 million in sales completed over the week.&nbsp;



Even after its two <a href="https://blockworks.co/news/top-solana-nft-projects-are-jumping-ship-to-ethereum-polygon">most valuable</a> NFT projects, DeGods and y00ts, announced plans to move to Ethereum and Polygon, respectively, Solana saw its NFT sales grow by nearly 30% last week, per the data.&nbsp;



Dust Labs, the startup behind both DeGods and y00ts, said it received a $3 million grant from Polygon to move blockchains.&nbsp;



“This shows the resilience of the Solana NFT community, providing optimism for SOL token holders,” Marcus Sotirious, market analyst at GlobalBlock, said in a note Monday.&nbsp;



News of the move, which is slated to occur later this quarter, was not initially well received by much of the community, Galaxy researchers noted in a December report.&nbsp;



“​​The Solana NFT community has been divided in response,” Galaxy analysts wrote. “While some in the community applaud the move as a smart business decision, others have expressed frustration at the fact that Frank [DeGods/y00ts founder Rohun Vohra] is abandoning Solana precisely when it’s trading at its lowest levels since early 2021.”&nbsp;



Solana’s <a href="https://blockworks.co/news/new-year-new-solana-battered-sol-beats-top-50-crypto-by-far">native token</a> SOL has emerged as a top performing coin of 2023 after ending 2022 94% lower against the dollar. As of Monday afternoon in New York, SOL was up more than 50% in the past seven days.&nbsp;



Even with increasing volumes, NFT collectors are still a relatively niche group, data shows, with 400,748 NFT buyers last week making a collective 1.2 million transactions. For scale, the Bitcoin <a href="https://bitinfocharts.com/comparison/bitcoin-transactions.html#3m" target="_blank" rel="noreferrer noopener">blockchain</a> currently handles around 1.75 million transactions per week.



The NFT market locked in around $24.7 billion in trading volume across blockchains and marketplaces in 2022, according to data from DappRadar, a decrease from 2023, which saw $25.1 billion in total volume.&nbsp;



2022’s slowdown was primarily concentrated in the second half of the year. In the third quarter of 2022, NFT sales dropped 60% from the previous quarter, DappRadar data shows.



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DeGods

BAYC Leads the Pack as NFT Sales Bounce Back in New Year

Shalini Nagarajan

As the Solana ecosystem works to distance itself from Sam Bankman-Fried, two of the network’s top NFT projects are migrating to rival blockchains.



DeGods will allow holders to bridge their NFTs over to <a href="https://twitter.com/degodsnft/status/1607156858019794944" target="_blank" rel="noreferrer noopener">Ethereum</a> sometime next quarter while y00ts will do the same on <a href="https://twitter.com/y00tsNFT/status/1607156616201392128" target="_blank" rel="noreferrer noopener">Polygon</a>, the teams tweeted Sunday.



With about $18 million in volume over the past 30 days, the projects are by far the most traded NFT collections in the Solana ecosystem, per <a href="https://opensea.io/rankings?chain=solana" target="_blank" rel="noreferrer noopener">data</a> from marketplace OpenSea. DeGods carried a floor price of 695 SOL ($7,824), while y00ts&#8217; stood at 215 SOL ($2,400) as of Tuesday.&nbsp;



Both projects are the creations of tech startup Dust Labs, which <a href="https://blockworks.co/news/latest-solana-nft-collection-gives-ethereum-nfts-a-run-for-their-money" target="_blank" rel="noreferrer noopener">raised $7 million</a> from investors including Solana Ventures in September. The firm’s utility token DUST, which denominates NFT staking yields and other perks, will also be ported to Ethereum and Polygon alongside related rewards points.



Rohun Vora, the creator tied to both NFT projects, tweeted a narrated video which said: &#8220;Dear Solana community, thank you. The support from this community has mean the world to us. Thank you for putting us on the map. We could not have done any of this without you.&#8221;



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">It&#39;s just the beginning. <a href="https://t.co/F3vxzXQAOy">pic.twitter.com/F3vxzXQAOy</a>&mdash; Frank III (@frankdegods) <a href="https://twitter.com/frankdegods/status/1607155074224250881?ref_src=twsrc%5Etfw">December 25, 2022</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



&#8220;We&#8217;ve come to the realization that in order to grow, we need to explore new opportunities. We believe that now is the time to take a calculated risk to embark on a new journey. After all, the biggest risk is not taking one.&#8221;



As yet, the migration isn’t mandatory and it’s unclear how NFT markets will react to NFT collections spread across both blockchains. Dust wrote in a separate tweet that “the future is multi-chain.”&nbsp;



“The details of the bridge will be released when it&#8217;s ready &amp; tested. This has never been done before at this scale,” the teams tweeted. “We want to make sure that it&#8217;s airtight.” DeGods’ daily volume rose almost 190% after the news was announced, according to blockchain data platform <a href="https://twitter.com/nansen_ai/status/1607564321638469633" target="_blank" rel="noreferrer noopener">Nansen</a>.



In a Twitter Spaces, Vora said DeGods isn’t growing at the intended rate on Solana, and “if Ethereum is where we have to go to keep growing, it’s what we have to do.” 



The DeGods project <a href="https://twitter.com/DeGodsNFT/status/1445891296283922434" target="_blank" rel="noreferrer noopener">tweeted</a> in Oct. 2021 that “Solana is just straight up better than Ethereum,” claiming it was a more decentralized blockchain.



<h3 class="wp-block-heading">Solana NFT departure compounds market losses</h3>



The move comes as somewhat of a blow to Solana, which has suffered throughout the Bankman-Fried scandal. While the disgraced crypto mogul wasn’t directly involved in its development, he was one of the network’s loudest proponents and most prolific investors.&nbsp;



Solana&#8217;s total value locked has <a href="https://defillama.com/chain/Solana" target="_blank" rel="noreferrer noopener">dwindled</a> by 75% since the start of November, now at $214 million. Markets have punished Solana’s eponymous native token. SOL has sunk some 70% after wind of troubles at FTX first broke last month; bitcoin and ether have only shed around 25%.&nbsp;



Polygon’s MATIC initially surged up to 50% as Bankman-Fried’s empire crumbled but has since given up those gains.



<figure class="wp-block-embed is-type-wp-embed is-provider-flourish wp-block-embed-flourish"><div class="wp-block-embed__wrapper">
<iframe loading="lazy" class="wp-embedded-content" sandbox="allow-scripts" security="restricted" src="https://flo.uri.sh/visualisation/12281862/embed#?secret=FEq2IQ4g3B" data-secret="FEq2IQ4g3B" frameborder="0" scrolling="no" height="575" width="700"></iframe>
</div><figcaption class="wp-element-caption">Polygon&#8217;s MATIC has outperformed bitcoin, ether and solana over the past three months</figcaption></figure>



DeGods and y00ts&#8217; blockchain switch was telegraphed earlier this month with reports that the former had&nbsp;asked Solana for $5 million to stay on its network, a request Vora has <a href="https://twitter.com/frankdegods/status/1607605466833784833" target="_blank" rel="noreferrer noopener">denied</a> took place.



CoinDesk now <a href="https://www.coindesk.com/web3/2022/12/26/solanas-top-nft-projects-degods-and-y00ts-to-migrate-chains/" target="_blank" rel="noreferrer noopener">reports</a> that a DeGods spokesperson confirmed Polygon paid for y00ts to jump ship, although an amount was not disclosed. The current grant will also only last two years at most, according to Vora (via CoinDesk), and is pegged to certain undisclosed milestones.



Solana co-founder Anatoly Yakovenko meanwhile <a href="https://twitter.com/aeyakovenko/status/1607449836831358981" target="_blank" rel="noreferrer noopener">shared</a> that he felt “bittersweet” about the NFT projects going multi-chain, but acknowledged their ambitions to grow.



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Top Solana NFT Projects Are Jumping Ship to Ethereum, Polygon

<div id="highlights-block_6352c79fd7364" class="highlights">
 <ul>
 <li>More marketplaces are leaning toward the zero-royalty model </li>
 <li>Sellers are responsible for paying the artist’s cut for secondary sales</li>
 </ul>
 
</div>



To date, Ethereum-based NFT creators have raked in more than $1.8 billion in royalties, according to data compiled by Galaxy Digital.&nbsp;&nbsp;



<a href="https://cms.blockworks.co/nft-royalties-sometimes-they-work-sometimes-they-dont/">Royalty payments</a>, the percentage that creators collect on secondary sales, are mostly concentrated to a select number of NFT projects, with 428 collections accounting for 80% of the royalties earned. 



The highest-earning entity, according to Galaxy, is Yuga Labs, the blockchain company behind the Bored Ape Yacht Club and Otherside NFT collections, among others. Yuga Labs collections have earned a total of more than $147.6 million in royalties. 



Read more: <a href="https://cms.blockworks.co/nft-royalties-sometimes-they-work-sometimes-they-dont/">How NFT Royalties Work – And Sometimes Don’t</a>



“Until recently, NFT royalties have been an opaque aspect of NFT trading,” Galaxy researchers wrote in a <a href="https://www.galaxy.com/research/insights/nft-royalties/" target="_blank" rel="noreferrer noopener">report</a> published Friday.&nbsp;



NFT creators receive their royalties from the seller, not the buyer, similar to real estate transactions in traditional markets.&nbsp;



Royalties are not currently programmed into smart contracts, making it difficult to track payments. Smart contract transfer mechanisms cannot be relied upon to calculate royalty payments because these functions also are used when collectors transfer NFTs between their own wallets.&nbsp;



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">“The only way an NFT royalty could be programmed into a smart contract is if the program somehow knew precisely when an owner is transferring an asset between his/her own wallet or selling an NFT to a buyer,” the researchers noted.&nbsp;</blockquote>



Because a decentralized royalty payment system is not yet functional, NFT marketplaces have taken on the role of facilitating royalty payments.&nbsp;



<a href="https://cms.blockworks.co/crypto-wallet-maker-ledger-sells-nfts-becomes-top-opensea-project/" target="_blank" rel="noreferrer noopener">OpenSea</a> only began showing royalty amounts during the checkout process in <a href="https://twitter.com/opensea/status/1448362715760713731?s=20&amp;t=ai9zbl9W6W0BBCQZtN3enQ" target="_blank" rel="noreferrer noopener">October 2021</a>. The popular NFT marketplace has also doubled its average royalty payout in the past year, increasing from an average of 3% to 6% paid to artists.&nbsp;



Other marketplaces, such as <a href="https://cms.blockworks.co/sudoswap-erupts-as-nft-traders-capitalize-on-royalty-free-sales/" target="_blank" rel="noreferrer noopener">Sudoswap</a>, pay artists no royalty fees at all in an effort to appeal to sellers and attract traders.&nbsp;



“Buyers often need a price increase of 10% to just break even,” Sudoswap said on <a href="https://twitter.com/sudoswap/status/1545535672240390145?s=20&amp;t=uCntDbTuYAUncxuHWr8i_Q" target="_blank" rel="noreferrer noopener">Twitter</a> in response to the decision to move to a zero-fee structure. “Trading on sudoswap means you only pay a 0.5% fee versus the usual 7.5% (2.5% + 5% royalty) fee on other platforms, enabling better price discovery.”



<a href="https://cms.blockworks.co/web3-watch-sec-probes-yuga-labs-degods-eliminates-nft-royalties/" target="_blank" rel="noreferrer noopener">DeGods</a>, the most popular NFT project on Solana, became the latest to join the no-royalties club earlier this month when the team decreased its royalty payment from 9.99% to 0%.



Royalties have been touted as a reason to invest in digital art since NFTs came on the scene, Galaxy researchers point out. Removing this model would significantly change one of the defining features of the industry.&nbsp;



“Until NFT royalties came into the picture, artists traditionally only made money from primary sales of their works,” researchers wrote. “That restrictive economic paradigm ensures that artists, especially those whose work may be seen as too revolutionary for their time, are unable to grow their revenue stream as their work gains recognition.”



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NFT Royalties Top $1.8 Billion: Galaxy Digital

Ornella Hernandez

<div id="highlights-block_63487cbfa516b" class="highlights">
 <ul>
 <li>Yuga Labs gives back to Miami students and forms Ape Community Council</li>
 <li>Actor Anthony Hopkins&#8217; NFT collection became the fastest primary drop in OpenSea’s history, selling out in 7 minutes</li>
 </ul>
 
</div>



<a href="https://cms.blockworks.co/opensea-adds-avalanche-marketplace-avax-traders-shrug/" target="_blank" rel="noreferrer noopener">OpenSea this week added support to the Avalanche (AVAX) chain</a> — its seventh blockchain for NFT transactions. AVAX traders, however, appeared indifferent, considering the token continued its steady decline in an uneven week for digital collectible markets.&nbsp;



And for gamers out there, the upcoming first-person shooter multiplayer Web3 game <a href="https://cms.blockworks.co/blockchain-game-shrapnel-aims-for-aaa-status-in-web3/" target="_blank" rel="noreferrer noopener">Shrapnel recently released its economic white paper</a> outlining its gameplay and in-game assets after dropping a movie-like game trailer.



Here are other notable stories that caught the eyes of the Web3 Watch, starting with <a href="https://cms.blockworks.co/french-authorities-charge-5-over-theft-of-bored-ape-nfts/" target="_blank" rel="noreferrer noopener">Yuga Labs</a>, the creator of Bored Ape Yacht Club (BAYC) NFTs.&nbsp;



<h3 class="wp-block-heading">The SEC wants a closer look at the Apes</h3>



The SEC has made Yuga Labs its latest target in a series of probes into crypto and Web3 companies.&nbsp;



The investigation will determine whether sales of its digital assets violate federal securities law. The brand portfolio includes BAYC, Mutant Ape Yacht Club, CryptoPunks, Meebits, the Otherside metaverse and the ApeCoin (APE) token.&nbsp;



“We hope to partner with the rest of the industry and regulators to define and shape the burgeoning ecosystem,” Yuga Labs <a href="https://www.bloomberg.com/news/articles/2022-10-11/bored-ape-creator-yuga-labs-faces-sec-probe-over-unregistered-offerings" target="_blank" rel="noreferrer noopener">said in a statement</a>.



Whatever the outcome, Yuga Labs is the highest-valued NFT company — and the SEC’s decision will likely set an industry precedent.



ApeCoin’s upcoming staking plans on Oct. 31 may have piqued the regulator’s attention. Asked to comment on staking, Yuga Labs told Blockworks that while it was an initial launch contributor of ApeCoin, it is not involved in the independently-run ApeCoin DAO, “so there’s not much we can say on the matter.”&nbsp;



Within an hour of the SEC’s announcement, APE’s price fell from $5.16 to $4.77 and has continued to decline.&nbsp;



Yuga, however, keeps trudging through The Swamp and has since <a href="https://yuga.com/blog/miami-arts-education-initiative/" target="_blank" rel="noreferrer noopener">announced</a> its commitment of $1 million to supporting education and art initiatives in Miami — the hometown of its co-founders and CEO.



Additionally, Yuga Labs recently <a href="https://yuga.com/blog/bayc-community-council/" target="_blank" rel="noreferrer noopener">assembled</a> the BAYC and MAYC Community Council — made up of seven of the earliest Ape holders. The idea is to keep ears to the ground and compile feedback from the community to relay back to the leadership team.&nbsp;



<h3 class="wp-block-heading">DeGods joins the zero-royalties club</h3>



DeGods, the most popular NFT project on Solana, tweeted that it is updating all of its NFTs to 0% royalties. DeGods collection will go from featuring 9.99% royalties to zero.&nbsp;



This “experiment” was done in the name of business. DeGods did not provide additional details.&nbsp;



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">As this tweet goes live, the metadata for the DeGods collection royalties are being updated from 9.99% to 0%. Next, <a href="https://twitter.com/y00tsNFT?ref_src=twsrc%5Etfw">@y00tsNFT</a> (t00bs).&mdash; DeGods (@DeGodsNFT) <a href="https://twitter.com/DeGodsNFT/status/1579018798187044864?ref_src=twsrc%5Etfw">October 9, 2022</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Other Dust Labs owned collections, y00ts and t00bs, will also have their royalties updated soon, according to the company.&nbsp;



The team has yet to reveal its artwork for y00ts, over a month after the initial mint. And the artist behind it and the greater DeGods ecosystem, known as SCUM, recently <a href="https://twitter.com/SCUMSOL/status/1580280071356440576?s=20&amp;t=0-A72s6BntHEBbCZ7OfheA" target="_blank" rel="noreferrer noopener">left</a> the project.



The decision to eliminate the royalty structure calls into question the importance of royalties in the NFT space. <a href="http://Read more: How NFT Royalties Work – And Sometimes Don’t">Royalties</a> are the payment, denominated in percentages, that NFT creators get every time somebody sells their digital asset. 



For traders, this means lower flipping costs and added incentive to transact. Creators usually get to set their cut taken per sale.



Read more: <a href="https://cms.blockworks.co/nft-royalties-sometimes-they-work-sometimes-they-dont/">How NFT Royalties Work – And Sometimes Don’t</a>



Twitter users reacted with skepticism with <a href="https://twitter.com/ElMarcSuarez/status/1579019022032855040?s=20&amp;t=hFcHSLrg3k0CXqWf5YnyQw" target="_blank" rel="noreferrer noopener">questions</a> like, “But how will team make money?” to <a href="https://twitter.com/goku_nft/status/1579092815833083908?s=20&amp;t=hFcHSLrg3k0CXqWf5YnyQw" target="_blank" rel="noreferrer noopener">comments</a> like “How about you pay everyone royalties for having your pfp?”&nbsp;



Founder Frank DeGods <a href="https://twitter.com/frankdegods/status/1579592433834545152?s=20&amp;t=YqLW4RX12ihWTvzuaZv6sA" target="_blank" rel="noreferrer noopener">responded</a> by acknowledging how people had been labeling them a “dead project &amp; a rug” for months. He stated that: “If royalties go away…I think the space will be more open to redefining what ‘rug’ means.”&nbsp;



Back in August, NFT artist Beeple weighed in, <a href="https://twitter.com/beeple/status/1558573319347179520?s=20&amp;t=0GHLhx0r7SRFAw_BSzk_XA" target="_blank" rel="noreferrer noopener">tweeting</a>, “Creators will have to build a collector base that WANT to honor these royalties.” Treating holders “right” will likely lead to increased support.



<h3 class="wp-block-heading">Q&amp;A with Unstoppable Domains</h3>



Unstoppable Domains, founding member of the Unstoppable Women of Web3 (UWoW3) education group, announced on Tuesday its commitment to onboard over five million women across Latin America into Web3 by 2030 and to accordingly distribute $25 million worth of free NFT domains.&nbsp;



UWoW3 partnered with Latin America-based organizations CryptoConexión and H.E.R. DAO LATAM to create free educational courses in English, Spanish and Portuguese, along with workshops and hackathons, so female developers can transition to Web3.&nbsp;



Unstoppable Domains also recently ran a <a href="https://cms.blockworks.co/unstoppable-domains-gifted-blockchain-domain-names-to-1m-women-in-abu-dhabi/" target="_blank" rel="noreferrer noopener">giveaway in collaboration with Abu Dhabi firms</a> to ensure each woman residing in the Emirati capital receives a decentralized domain name.&nbsp;



Blockworks connected with the company’s Senior Vice President Sandy Carter to discuss Unstoppable Domain’s education initiatives.



Blockworks: Unstoppable Domains recently launched a set of online courses. Why would a student choose UWoW3 educational streams over other academic platforms?&nbsp;&nbsp;



Carter: UWoW3 educational streams are completely free and feature content from leaders across Web3. For university students, they can be a great resource to immerse themselves in the blockchain space and a supplement to any blockchain-focused academic content.&nbsp;



Blockworks: Why is UWoW3 now turning to Latin America? Which specific countries are being targeted?&nbsp;



Carter: When we launched our educational streams, one of the top requests we got was to provide content in Spanish. We’d also heard from Monica Talan, founder of CryptoConexión, who was excited to partner with Unstoppable Women of Web3 to bring our mission into Latin America. All universities that meet a set criteria will be eligible for free domains. Our first hackathons will take place in countries in Latin America with larger populations, and we’ll work with local partners to hold events in other countries.&nbsp;



Blockworks: While Latin American countries have embraced crypto largely due to necessity amid unstable economies, what specific skills or fields within the blockchain industry does Unstoppable Domains think that users in Latin America should focus on?



Carter: There are a wide range of topics in Web3 that are worth exploring, from how to mint your first NFT to developing for the blockchain. Our Web3 courses in Spanish offer topics at a range of levels, so we can support people on their journey whether they’re just learning about Web3 or are ready to start building in the space.



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