KAUNAS, LITHUANIA
–News Direct–
DappRadar, the global app store for decentralized applications, predicts in its new report on the state of the NFT market that despite financials falling in Q3 that total sales are expected to grow by 6% by the end of the quarter.
Although the NFT market’s trading volume decreased by 75% ($2 billion) from the prior quarter, sales are estimated to reach 21.1 million by the end of Q3. In addition, despite the general fall in the NFT market, with tough economic headwinds and the impact of the Terra Luna crash, with a decline of trading volume of 75% for Q3, the number of unique traders count has increased by 36%, compared to Q3 2021.
Source: DappRadar
“Taking into consideration the amount of brands that are starting to implement NFTs and the number of unique traders of this quarter (2.2 million), the expansion of the NFT market will continue expanding also in 2023, but the road ahead will be rocky,” the report concludes.
Ethereum NFT projects
On the downside, in Q3 the market cap for Ethereum’s top 100 NFT projects suffered a 44% ($19 billion) decrease in USD value from the previous quarter; though over the same period, the market cap in terms of ETH based NFTs as a whole decreased only 27% (12.2 million ETH). In contrast, NFTs on ImmutableX increased trading volume by 87% from the previous quarter showing the potential of web3 games.
With Ethereum hosting the high-end collectibles contributing to millionaire sales, one of the positive standout NFT news from the quarter was the sale of the most expensive NFT this year, with the purchase by Deepak Thapliyal, the CEO of Chain of CryptoPunk #5822 for a record-breaking 8,000 ETH (approximately $23.7 million). This sale is the biggest CryptoPunks NFT purchase in history.
Bluechip collectibles
Indeed, the report finds that though blue chip collectibles’ trading volume in Q3 fell by 88% reaching more than $334 million, almost the same value as in the second quarter of 2021, “when we look at the floor price of the top 11 blue chips collections it hasn’t decreased, but it has maintained almost the same value as before Terra’s collapse.”
Looking at the September data for floor prices of the top 11 bluechip collections, Azuki has an increase of 43.18% (11.44 ETH) from the previous month, followed by Cool Cats with a 15.83% (2.78 ETH) increase. On the other hand, the four projects of Yuga, besides Mutant Ape Yacht Club’s increase of 2.14% (14.30 ETH) from August, decreased their floor price. CryptoPunks decreased by 5.19% (63.95 ETH), Bored Ape Yacht Club 7.36% (73 ETH), and Otherdeed just 0.57% compared to August..
Digital art
Asides from avatars, there is a thriving market for digital art incorporating NFTs, with over 4.5 million sales since January 2021, and a total trading volume of over $3 billion. While the market has cooled off in Q3 the digital art industry is expanding. This year, contemporary art institutions are beginning to acquire art produced as NFTs, while digital art is an important element of the expanding metaverse.
Blockchain gaming NFTs
The blockchain gaming market which is worth more than $8.6 billion, and with 847,000 daily Unique Active Wallets (UAW) registered in August, saw the total trading volume of NFTs decline sharply from $1 billion in Q1 of 2022 to just $71 million in Q3. Sales numbers also fell off from 12 million in Q1 to 3.3 million in Q3.
Fashion and luxury NFTs
In the fashion and luxury NFT market, while trading volume dropped off significantly from Q1 to Q3, the report argues that demand for fashion and luxury NFTs remain one of the strongest use cases. A case in point, the collection was created by Tiffany & Co, with a mint price of 30 ETH ($50,000), sold out in 20 minutes, worth $12.5 million in revenue.
Sports NFT market
The sport NFT market led by soccer and basketball, with Sorare and NBA Top Shot, combined generated $128 million in trades during Q1 from more than four million trades. The volume decreased 63% in Q2 while the number of sales crashed by 54%. In Q3 the total trading volume is more than $18 million, a further 61% decrease from the previous quarter, and the sales count is one million, a 47% from Q2. Despite the bleak financials the report believes the sports market for NFTs is still strong, with Sorare to benefit from the 2022 World Cup later this year.
The impact of The Merge
Finally, in terms of the impact of Ethereum’s Merge on NFTs, the consequent reduction in energy consumption required by the new Proof of Stake mechanism, was a positive step forward to combat criticism of NFTs, the report finds: “This is a significant advancement for Ethereum and particularly for NFTs, successfully rebutting one of the most common NFT objections.”
Notes to Editors
[2] The Merge and dangers of NFT duplication
Despite The Merge being supported by most developers in the Ethereum community some developers in the Ethereum community split the blockchain and created a new chain that continues to use the existing proof-of-work mechanism. The most notable example so far is ETHPOW, which is headed by the renowned Chinese miner Chandler Guo.
As ETHPOW and other forks diverge from the Ethereum mainnet, they produce duplicate copies of Ethereum’s NFTs. An NFT is only a blockchain token that may serve as proof of ownership for digital assets like artwork and collectibles. Therefore, a branched Ethereum chain will contain multiple deeds pointing to the same piece of art or media.
A Bored Ape Yacht Club NFT owner may sell the duplicated version on the proof-of-work chain, but if the same transaction is “replayed” by a malicious actor on the merged proof-of-stake chain, the seller may also lose the original version on that chain.
[3] Digital art in Q3
In Q3 the overall trade volume is $58 million, a 72% reduction from the previous quarter. The number of sales decreased by 43% over the previous quarter, reaching 258,000.
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Founded in 2018, DappRadar is the The World’s Dapp Store: a global decentralized applications (dapps) store, which makes it easy for its base of more than 1 million users per month to track, analyze, and discover dapp activity via its online platform. The platform currently hosts 9,000 dapps from across 30+ protocols and offers a plethora of consumer-friendly tools, including comprehensive NFT valuation, portfolio management, and daily industry-leading, actionable insight.
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