Non-fungible token (NFT) production on Ethereum, or the value of primary revenue generated by NFT coins, fell to an all-time low of $17.55 million in September, down 12.4% from $20.05 million in August, according to Forkast Labs data.
NFTs are blockchain-based digital assets that can provide information about digital ownership. Notable collections such as Bored Ape Yacht Club (BAYC) traded at a floor price of 128 ETH (US$211,000) in May 2022 before falling over 60%, along with other notable NFT collections such as CryptoPunks, which fell by 60 .4% fell to 45 Eth. (US$72,727), from an all-time high of 113.9 Eth (US$184,080) recorded on October 9, 2021.
“Blue-chip NFT collections such as Bored Ape Yacht Club and CryptoPunks serve as indicators of broader NFT market sentiment. Their decline could signal a shift in investor sentiment, perhaps calling into question the intrinsic value of such assets,” said Matan Doyich, the CEO of Crypto Index, a company building a centralized infrastructure for tokenized crypto exchange-traded funds. Forkast.
Reflecting the overall NFT bear market, the Forkast ETH NFT Composite, an index that measures the performance of the top 250 NFTs on the Ethereum blockchain, fell 48% this year to an all-time low of 715.22 points, recorded on 1 September. 28.
NFT production on the Polygon blockchain fell to a seven-month low of $4.7 million in September, down from a yearly high of $14.44 million in August. Polygon NFT production is up 219% this year, compared to $1.47 million in January. Despite the rising numbers, the Forkast POL NFT Composite is down more than 46% this year.
The overall slump in the NFT market, along with the decline in NFT production, can be attributed to a loss of interest among NFT investors, according to Anndy Lian, author of NFT: From Zero to Hero.
“The NFT market was driven by a lot of hype in 2021. However, this has waned in recent months as people have become more realistic and picky about the type of NFTs they want,” Lian said.
Revenue from NFT services on Ethereum, or total marketplace fees and creator royalties from secondary sales, fell 84.4% this year to $6.01 million in September, compared to $38.74 million in January. Forkast Labs facts.
On OpenSea, one of the world’s largest NFT marketplaces, the protocol’s monthly NFT trading volume fell 31.8% to $76.79 million in September, compared to $112.74 million in August, according to data from The Block.
Trading volume at Blur, OpenSea’s rival marketplace, fell 38.3% to $150.42 million in September, compared to $243.92 million in August.
“To reignite interest in NFTs, the industry must see and demand innovations beyond digital art and collectibles, such as integrating NFTs into more substantial real-world applications,” Doyich shared. Forkast.
This year brought new use cases for NFTs, which will be needed to incentivize institutional investors, said David Tng, managing director of TZ APAC, the Asian entity of the Tezos blockchain.
“NFTs will rely on the same pain point: they need to prove their utility, especially against the backdrop of a highly volatile market. However, we still see rapid growth and innovation. Companies and artists continue to use NFTs as a platform to explore, create and connect with their audiences,” Tng wrote in a statement shared with Forkast.
Despite the market slump, globally recognized brands continue to adopt NFTs. Starbucks launched an NFT version of its iconic Pumpkin Spice Latte last Thursday, to commemorate the iconic drink’s 20th anniversary. The $20 NFTs have no coin limit and users will receive 250 bonus points that can be spent on improving their Starbucks Odyssey experience, the company’s Web3 rewards and loyalty platform.
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