NFT Financials Fall in Q3, But Chain Values Remain Bullish, DappRadar’s New NFT Report Shows
KAUNAS, LITHUANIA –News live– DappRadar
DappRadarthe global app store for decentralized applications, in its new report on the state of the NFT market, predicts that despite the economy slumping in Q3, overall sales are expected to grow by 6% by the end of the quarter.
Although the NFT market’s trading volume fell by 75% ($2 billion) from the previous quarter, sales are estimated to reach 21.1 million by the end of Q3. Additionally, despite the overall decline in the NFT market, with tough economic headwinds and the impact of the Terra Luna crash, with trading volume down 75% for Q3, the number of unique traders has increased by 36%, compared to until the 3rd quarter of 2021.
Source: DappRadar
“Considering the amount of brands starting to implement NFTs and the number of unique traders this quarter (2.2 million), the expansion of the NFT market will continue to expand also in 2023, but the road ahead will be rocky,” concludes the report.
Ethereum NFT projects
On the downside, in the third quarter, the market capitalization of Ethereum’s top 100 NFT projects was down 44% ($19 billion) in USD value from the previous quarter; During the same period, the market capitalization in terms of ETH-based NFTs as a whole fell 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 exclusive 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, CEO of Chain of CryptoPunk #5822 for a record 8,000 ETH (about $23.7 million). This sale is the largest CryptoPunks NFT purchase in history.
Bluechip collectibles
In fact, the report finds that although blue chip collectibles’ trading volume in the third quarter fell by 88% to reach more than $334 million, almost the same value as in the second quarter of 2021, “when we look at the bottom price of the top 11 blue chip collectibles it has not decreased, but it has held almost the same value as before Terra’s collapse.”
Looking at the September floor price data for the top 11 blue chip pools, Azuki is up 43.18% (11.44 ETH) from last month, followed by Cool Cats with a 15.83% increase (2.78 ETH ). On the other hand, Yuga’s four projects, in addition to Mutant Ape Yacht Club’s 2.14% (14.30 ETH) increase from August, reduced the floor price. CryptoPunks was down 5.19% (63.95 ETH), Bored Ape Yacht Club 7.36% (73 ETH), and Otherdeed just 0.57% compared to August.
Digital art
Avatars aside, there is a thriving market for digital art that includes NFTs, with over 4.5 million sales since January 2021, and a total trade volume of over $3 billion. While the market has cooled in the third quarter, 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 Games 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 drop sharply from $1 billion in Q1 of 2022 to just $71 million in Q3. Sales figures also fell 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 fell significantly from Q1 to Q3, the report argues that demand for fashion and luxury NFTs remains one of the strongest use cases. An example of this is the collection created by Tiffany & Co, with a new price of 30 ETH ($50,000), sold out in 20 minutes, worth $12.5 million in revenue.
Sports NFT market
The sports NFT market led by football and basketball, with Sorare and NBA Top Shot, generated a combined $128 million in trades during Q1 from more than four million trades. Volume fell 63% in Q2, while the number of sales crashed by 54%. In Q3, the total trade volume is more than $18 million, a further decrease of 61% from the previous quarter, and the sales figure is one million, 47% from Q2. Despite the bleak economy, the report believes the sports market for NFTs remains strong and Sorare will benefit from the 2022 World Cup later this year.
The impact of The Merge
Finally, regarding the impact of Ethereum’s merger on NFTs, the subsequent reduction in energy consumption required by the new Proof of Stake mechanism was a positive step forward in combating criticism of NFTs, the report finds: “This is a significant advance for Ethereum and especially for NFTs, successfully debunking one of the most common NFT objections.”
Notes to editors
[1] DappRadar Q3 NFT Report
[2] The merger and the 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 led by renowned Chinese miner Chandler Guo.
As ETHPOW and other forks diverge from Ethereum’s mainnet, they produce duplicate copies of Ethereum’s NFTs. An NFT is simply a blockchain token that can serve as proof of ownership for digital assets such as artwork and collectibles. Therefore, a forked Ethereum chain will contain multiple deeds pointing to the same artwork or medium.
A Bored Ape Yacht Club NFT owner can sell the duplicate 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 can also lose the original version on that chain.
[3] Digital art in Q3
In Q3, the total trade volume is 58 million dollars, a decrease of 72% from the previous quarter. The number of sales decreased by 43% compared to the previous quarter, reaching 258,000.
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Founded in 2018, DappRadar is The World’s Dapp Store: a global decentralized application store (dapps), making 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 over 30 protocols and offers a wealth of consumer-friendly tools, including comprehensive NFT valuation, portfolio management and daily industry-leading, actionable insights.
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