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NFT transactions exploded in 2021 as fans discovered the digital aggregation tech built on blockchain, but since then it has stagnated and slowed its growth in 2022, according to a report by analytics firm Chanellis.
Non-fungible tokens (NFTs) have been one of the most dynamic and pioneering pieces of decentralized Web 3 technology in the last two years. And now there is a big debate about whether interest in NFTs is flattening.
The Wall Street Journal cited data on flatlining this week, and some data analysts, such as Dune Analytics, disputed Nonfungible.com’s interpretation of the data. Now the channelization data will add fuel to the fire.
NFTs are blockchain-based digital items whose units are designed to be unique, unlike traditional cryptocurrencies whose units are interchangeable. NFTs store data on a blockchain – as with most NFT projects built on the Ethereum blockchain – and that data may be associated with files containing media, such as images, videos, and audio, or in some cases physical objects.
NFTs typically give the holder ownership over the data, media, or object associated with the token, and are usually bought and sold on a specific marketplace, Chanellis said.
NFTs saw explosive growth in 2021, but this growth has not been sustained and has reached that level so far in 2022.
Since the beginning of 2021, NFT transaction volume has increased significantly, but this growth fluctuates. NFT activity declines and flows every month – so far in 2022, the value sent to the NFT marketplace continued its 2021 growth in January, entered a recession in February and then began to recover in mid-April.
Overall, collectors have shipped more than $ 37 billion to the NFT marketplace by May 1, 2022, surpassing the total of $ 40 billion sent to them in 2021. However, since the end of the summer of 2021, NFT transaction growth has come and gone properly, with the exception of two major spikes, activity has remained largely flat: one in late August, which was probably inspired by the release of the Mutant App Yacht Club Collection, and one from late January to February. Was extended to the beginning of 2022, which
Luxerrer was probably inspired by the launch of the NFT Marketplace, Channelisis said.
After that spike, however, a significant decline in NFT transaction activity began in mid-February, falling from $ 3.9 billion in the week of February 13 to $ 964 million in the week of March 13 – the lowest weekly level since the week of August 1, 2021. The NFT market began to recover in mid-April, however, and is now approaching the weekly volume that hit earlier this year, possibly due to the recent launch of the board app Yacht Club’s Metawars project.
Despite these fluctuations in transaction volume, the number of active NFT buyers and sellers continues to grow. In Q1 2022, 950,000 unique addresses bought or sold NFT, up from 627,000 in Q4 2020. Overall, the number of active NFT buyers and sellers has increased every quarter since Q2 2020, ChannelLis said.
As of May 1, Q2 2022, 491,000 addresses have dealt with NFTs, which has put the NFT market in motion to continue its quarterly growth trend in the number of participants. The number of active NFT collections on OpenSea – i.e. having any transaction activity in a given week – has also grown steadily since March 2021, and is currently over 4,000.
Who uses NFTs?
Analysis of web traffic on the popular NFT platform shows that Asset Class attracts users from all over the world. Central and South Asia leads the way, followed by North America and Western Europe. While some regions are certainly lagging behind, the fact that no region has accounted for more than 40% of all web traffic since the beginning of 2021 suggests that, like the entire cryptocurrency, NFTs have captured a global audience.
Most NFT transactions are retail size, meaning below કિંમ 10,000 worth of cryptocurrency. NFT collector-sized transactions (between $ 10,000 and $ 100,000) have grown significantly as part of all transfers between January and September 2021, but have remained stable ever since. This suggests that, at present, the addition of new retail NFT investors is gaining momentum with the addition of large NFT investors.
However, in terms of transaction value rather than the number of transfers, Chanellis said NFT collectors make up the bulk of the activity. Institutional investors are waiting for them, and even do most of the activity in certain weeks when extremely large purchases have been made. For example, during the week of October 31, 2021, organizational transfers accounted for 73% of all activity, largely due to the purchase of multiple NFTs in the Mutant App Yacht.
Subsequent weeks saw more organizational-sized transfers, and since then, organizational transfers accounted for 33% of all activities. However, like the entire NFT market, the growth of institutional-sized NFT transactions has not been sustained.
From late November to mid-February, institutional NFT purchases increased weekly, reaching 1,889 transactions in the week of February 13, after rising to 2,739 two weeks earlier. Institutional NFT activity then plummeted, falling to just 473 transactions during the week ending February 20.
As of April 17, 2022, institutional NFT activity has not yet reached that level in the winter of 2021. This period of reduced institutional activity is also almost identical to the overall decline in interest in NFTs in general.
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