Ethereum’s Declining NFT Sales and Buyers Have a Solana Twist That Looks Like…
NFTs, once a popular search term in 2021, see their traction and popularity fade in 2022, especially as NFT metrics fall. Big bulls like Ethereum-based NFTs have, understandably, also faced serious consequences.
Ergo, the question – Can Ethereum’s competitors capitalize on this opportunity? If so, can it return to the top?
Raises concern over…
NFTs, overall, took a big hit in 2022. NFT trading volume is down a whopping 97 percent since its peak in January. According to data compiled by Dune Analytics, the weekly trading volume of non-fungible tokens across the blockchain realm plunged to $114.4 million.
ETH’s dollar NFT volume fell by ~90% from January, with average sales below $1 billion per month in the third quarter. Simply put, sales averaged less than $1 billion per month in Q3 compared to $4.6 billion in Q2.
Messari October 2 tweet shed further light on the stated scenario.
Source: Messari
The decline highlighted not only a slowing market for NFTs, but also a drop in ETH’s price which most NFTs use as their base currency. OpenSea continued to dominate market share in the 3rd quarter. Furthermore, the data indicated that Ethereum became less popular for NFTs, despite moving to Proof-of-Stake and addressing the issue of carbon/energy intensive usage.
In addition, NFT daily trading volumes fell dramatically, with the average number of daily traders seeing a much smaller decline. This indicated “a sticky base of engaged users of around 40,000 per day,” as per Messari’s post.
Source: Messari
However, a few units saw some relief. For example, Ethereum Names Service (ENS) sales volume increased by 133.95% in the last 30 days. Compared to the same, the sales volume of blue chip NFTs like Bored Apes, CryptoPunks, Azuki etc. was lower. On the contrary, CryptoPunks attempted some sort of recovery on their own charts.
The market capitalization of Ethereum’s top 100 NFT projects also saw a 44% decrease ($19 billion) in USD value in the 3rd quarter (QoQ). The market value of ETH-based NFTs, as a whole, fell by only 27% (12.2 million ETH).
Your loss, My victory
However, despite the backdrop of declining NFT sales and buyers, ETH competitor Solana made waves. Mainly in terms of stealing or rather creating upside compared to Ethereum’s NFT market share.
In fact, as per Delphi DigitalSolana’s share of total NFT trading volume increased from 7% to 24% over the past 6 weeks.
Will we see a change in the dominance structure within the NFT market? Or will Ethereum slowly make its way back to the top?
