Challenges with data availability in the NFT market

Nonfungible tokens (NFTs) have grown into a distinct sector within the blockchain industry, but they still need to address several challenges before aiming for mass adoption. One of the main issues in the space has to do with data availability, or mostly the lack of it. Unlike the broader crypto industry, the NFT market is still in its infancy, and there are relatively few resources available to track NFT collections, explore detailed statistics, and analyze market trends.

To begin with, the NFT market lacks standardized data formats and metadata. This can make it difficult for NFT buyers and sellers to share and analyze data, such as ownership history, provenance and other important details. Without access to meaningful data, it can be challenging for buyers to make informed purchasing decisions and for creators to accurately price their NFTs.

One of the reasons for the current situation is that the NFT market is highly fragmented, with thousands of different collections and individual NFTs available for purchase. This makes it challenging for a single resource to provide a holistic view of the market as a whole.

Users can still rely on blockchain analytics resources such as Nansen or DappRadar, but they are not NFT-oriented and may not cover the NFT market from all angles.

How data availability can improve the NFT market

Increasing data availability in the NFT space can contribute to a more mature and efficient market where buyers and sellers can make informed decisions based on a complete overview of the space. This in turn can drive growth and innovation in the market, and lead to increased adoption and participation over time.

Here are some ways dedicated NFT analysis resources can help the market:

• Market analysis — with access to relevant data on NFT collections and market trends, buyers and sellers can better analyze the market and identify new trends and opportunities.
• Transparency – easy access to data on NFT ownership history, provenance and other details would provide more transparency. This can help buyers make more informed decisions.
• Liquidity – improved data availability can make it easier for buyers and sellers to connect and trade NFTs. This can have an indirect positive impact on market liquidity and create more opportunities for investors and collectors.
• Price discovery – improved liquidity and data availability can in turn help creators determine a fair price for their NFTs.
• Standardized data formats — standardized data formats and metadata can make it easier to compare and analyze different NFT collections and marketplaces. This can help to create more consistency and predictability in the market, and make it easier for participants to navigate.

NFT analysis – Covers demand in an unexplored market

The huge demand for reliable NFT analysis tools is a good opportunity for developers to come up with solutions. Some companies are already well ahead in this race. One example is bitsCrunch, an NFT-oriented data analytics firm. Its flagship product is Unleash NFTs, a leading AI-powered NFT analysis platform that provides a comprehensive overview of the NFT market, along with rich infographics, in-depth market reports, relevant statistics and insights into wash trading patterns.

Saravanan Jaichandaran, the Chief Data Scientist at bitsCrunch, shared:

“Data availability remains a core issue despite the prominence of NFTs in recent years. Recognizing that, we built Unleash NFTs to offer reliable insights that allow people to make more informed decisions about their NFT investments, and thus adding more trust and transparency to the ecosystem.”

With Unleash NFTs, bitsCrunch aims to make NFT analysis more accessible to NFT investors, creators and enthusiasts. The company relies on three core values:

• Accuracy — the company’s data scientists strive for precision to deliver concrete analysis and data that help clients better evaluate their NFT investments. All critical indicators, such as market value, trading volume and other trading activities are updated regularly.
• Transparency — bitsCrunch offers reliable AI-powered solutions designed to create trust and transparency in the ecosystem.
• Accessibility — the company’s products are available to NFT market participants worldwide through clean and easy-to-understand API.

In addition to offering in-depth reports and rich infographics, Unleash NFTs has a dedicated tool to identify wash trading, an activity where one or more traders have planned to create an artificial demand for an NFT by buying and selling it multiple times.

Data availability is a critical factor for the growth and maturation of the NFT market. The lack of standardized data formats and metadata, along with the highly fragmented nature of the NFT sector, presents significant challenges for buyers and sellers looking to navigate this new space.

Fortunately, there are signs that the situation is improving. New platforms and tools are emerging, which aim to provide greater transparency and better market analysis while at the same time leading to increased liquidity in the NFT market. In addition, work is underway to develop standardized data formats and metadata that can provide more consistency and predictability to the market.

Learn more about bitsCrunch