Will NFT Sales Rise Due to Ethereum Merger? – Ethereum (ETH/USD)
Ethereum ETH/USD got its long-awaited upgrade. After years of planning, development and delays, the world’s second largest coin by market capitalization has moved to proof-of-stake. The merger is up and running, but the price is still down, but NFT sales picked up after months of downtime.
Sales volume and prices of NFTs have increased, according to crypto Footprint Analytics, a crypto big data company. Prior to the merger, Bored Ape’s sales were up more than 45% from the previous week. They have traded one of the NFTs for 130 ETH, which was around $230,911.25 at the time. After the Merge, they made about $7 million in sales. While CryptoPunks had 25% more than last week. Doodles, an NFT collection saw a more than 1,200% jump in sales after it secured a $54 million funding round led by Reddit founder Alexis Ohanian’s venture capital firm, Seven Seven Six.
Four seconds after the Ethereum merger, the first transaction of an NFT created using proof-of-stake (PoS) consensus was approved. Block 15537393’s merge timestamp was 06:42 UTC on Thursday. One user immediately bought an NFT in block 15537394 with 36.8 ether (ETH), or $53,403 at the time.
For now, the increase in demand for NFTs is a bright spot for the industry. The communities closely watching the NFT market also pointed out that there is a chance for the 5th month of continuous dive in the overall NFT market. Others, who don’t know what the merger will bring to the table, hoped that transaction fees would be lower and would bring in more sales and liquidity.
Anndy Lian, best-selling book author “NFT: From Zero to Hero” commented: “Users will have to wait for the Surge, Verge, Purge and Splurge improvements to see a reduction in transaction costs and significantly increase scalability. Low transaction costs are essential because large costs make many NFT – use cases impossible, especially in the gaming and metaverse industries. Numerous NFT game weapons, avatars and skins are likely to trade for relatively little money, so transaction times must be fast and costs cheap for them to be profitable.”
Lian added that the current cycle looks speculative as the spikes only happened with a few projects and not all. Whether the prices of existing NFTs would rebound remains unclear.
The second talking point on the ground concerns intellectual property rights after the merger. Much is also unknown about how or if intellectual property rights will be transferred to NFT copies on forked versions of Ethereum. Most NFT developers will almost certainly only transfer rights to holders of NFTs on the most popularly adopted post-fork chain, which will almost certainly be EthereumPoS.
Assume that the legitimacy of both the PoS and PoW chain is recognized by major players in the NFT ecosystem. If so, the shared EthereumPoW chain could dilute the value of existing NFT collections due to increased supply. This will also create a tangled scenario in terms of intellectual property rights and commercial rights, and perhaps lead to major disputes among NFT owners.
Eventually, the market will decide which NFT assets to value based on liquidity and community acceptance. Investors and traders may want to wait until the dust settles before making any decisions about their Ether and NFT holdings.
