NFTs market meta-analysis by NIFTSY

  • General figures for the market;
  • Main development vectors;
  • Our forecasts based on p. 1 and p. 2. More precisely — conclusions and short forecasts already on them.
  • In general, this article is a systematic one, because from it we will consider each direction separately.
  • the number of active users (so far, it is thousands — tens of thousands of people: given the presence of 7.5 billion on the Planet — the growth prospects are more than impressive, given that the number of active wallets in the crypto industry is estimated at tens to hundreds of millions as of the first quarter of 2021);
  • practical implementations — a breakdown of this in the general metrics below and in our next materials;
  • other data: from specific Dapps to specialized solutions at the blockchain, protocol and higher layers (which are at least 2–3 more layers).
  • Ethereum has implemented the most projects, but Wax leads in the number of active traders: one of the next studies will just be parsing the statistics on blockchain solutions for NFT and their prospects. In the tangled conglomerate of consensus, forks and top-tier solutions, there is not as much uniqueness as initially seen.
  • First among the categories is the gaming industry (NFT characters, VR properties, etc.). And in general the online aspect of NFT usage seems more obvious so far, although the inevitable process of tokenisation suggests just the opposite: the highly significant role of NFT in the world of unique, offline, objects.
  • That said, 2021 and 2020 differ from each other in that the Ethereum ecosystem has begun to lose out to competitors in a number of ways: this is primarily due to “gas wars”, but also due to the fact that the number of developers of different solutions has begun to increase dramatically due to the general heave of DRS (Polkadot, Cosmos, Cardano, WAX, etc.) — decentralised and/or distributed systems.
  • Games;
  • DeFi;
  • Gambling;
  • Exchange services;
  • Collecting;
  • Marketplaces;
  • Social services;
  • High risk projects;
  • Others.

Forward-looking projects

  • niftsy.io the first cross-chain protocol based on tokenisation of payment channels and functional pledging of assets through this, very technical and economical non-trivial, mechanics.
  • niftex.org is an NFT sharding platform.
  • nftfi.com — not only a supermarket for NFT, but also a mechanism for pledging them through simple and open mechanics.
  • immutable.com — top-level (L2) protocol for direct exchange of both ERC-20 and ERC-721 tokens.
  • upshot.io — protocol for expert (and possibly objective) real-time evaluation of NFT.
  • nftx.org — a platform for creating NFT-backed index funds.
    charged.fi — mechanism for creating new format ETFs via NFT wrappers (one NFT can contain different tokens).
  • nft20.io — a liquidity protocol via NFT: buying and selling via swaps.
  • dodonft.io — NFT liquidity protocol, including tokens via swaps.
  • safemoon.net — deFi-protocol, which is based on a minimalist functionale and NFT collateral.
  • nft.org — a community-driven protocol designed to run applications that support the creation, marketing and exchange of so-called “unplayable” tokens.
  • Sharding is not only a mechanism for solving problems within blockchain implementations (such as increasing TPS, scaling load sharing, etc.), but also a perfectly overlapping way of sharing risk, profits and other co-ownership parameters in the NFT market.
  • Liquidity wrapped in NFT is much more reliable and interesting in terms of possible integrations than liquidity created by interchangeable tokens alone.
  • The collateral function is one of the basic features of the NFT-market and its development will largely determine the general evolution of the market and its individual segments. For sure.
    The competition between the protocols will eventually lead to the first stage of their unification, because that is where the mass adoption effect lies.

NFT and not the obvious trends. Prelude

Conclusions

  • Overall growth in the number of users of blockchain platforms;
    Increased growth in specific blockchain implementations, in which currently the leadership remains with the Ethereum ecosystem, followed by Flow, WAX, BSC and others. There is also potential for growth in DRS such as: Polkadot, Cosmos, Tezos, Tron and Solana.
  • At this time, by metrics such as: capitalization of projects, the average bill of sale of 1 NFT, the average bill of sale per 1 buyer (seller) — belongs to Ethereum, but the frequency of transactions and the number of sellers / buyers — WAX.
  • The development of NFT standards and the increased weighting of non-ERC-721 tokens — also lays the potential for further growth, especially in industries not directly related to collecting and/or digital art.
  • To date, NFTs have been involved in a variety of areas. We will highlight a few (in future publications — we will look at all of them in details):
  • 1. Protocols that use NFT to implement various functionalities (NIFTSY, UpShot, NFTfi, NFTx, Meme and others).
  • 2. Marketplaces (OpenSea, Rarible, EulerBeats, SuperRare, Async Art, Known Origin, Nifty Gateway, Foundation, Portion, MakersPlace, Zora, Mintbase, Mirror (a project that has died), Audius, Auctionity, Pixura, Getpixls, Mooncatrescue, Niftygateway, Blockparty, Known Origin, Myth.Market).
  • 3. DeFi (in YFI, NFT is an insurance policy; in UNI, NFT is a liquidity pool position; Aavegotchi uses NFT as secured through AAVE unique characters; Tinlake uses NFT as an opportunity to swap ERC-20 tokens and others, say, AnRKey X).
  • 4. Games (aggregators like Alien Worlds, Axie Marketplace, Decentraland Marketplace or Terra Virtua; games proper — CryptoPunks; Cryptokitties; Decentraland and many others).
  • 5. The others are all covered in later articles in this series.
  • Initial analysis of general market indicators showed that NFT-sellers are not active in crypto-market downturns and this may give rise in the future to an internal hedging tool among crypto-assets: however, for now for a complete argument — existing indicators, especially — in the time slice, are not enough and there are obvious contradictions in this direction.
  • At the moment, NFT market is estimated from $1 to $15-$18 billion (depending on project evaluation criteria), but considering such factors as: a) crypto-market growth in 2020–2021 to actually $2 trillion capitalization; b) increase of NFT market share in 2014–2021; c) potential of inherent growth (see above) — this market has all prospects to grow in 10x and more times. And in the medium term. And it is not about valuation in dollars, but about the network effect and intrinsic value to crypto-assets as a whole.
  • The main problems, however, are: 01. Verification of NFT collateral: unsecured NFTs can be used for both money laundering and outright fraud; 02. Linking offline and online entities to NFT: it must be unique; 03. Unification of NFT standards: so far, the diversity of platforms and standards is not a problem per se, but rather a growth driver, but without uniform NFT liquidity transfer standards across blockchain platforms and other parameters, it will be extremely difficult to create a market environment that protects the interests of investors as well as developers and direct sellers/buyers.
  • The last, but extremely important conclusion for this research is that at the moment, information aggregators (CMC, CoinGecko, DappRadar, etc.) and specialized analytics resources actually focus on classic parameters of project evaluation, while the NFT market, especially in conjunction with DeFi, provides a wider spectrum for objective evaluation of a project, product or any other entities in general: this includes liquidity turnover (collateral), number of reverse sales, commission saved, HODL mechanics, etc.
  • Blockchain integrations with NFT;
  • NFT marketplaces;
  • NFT protocols and their future;
  • Other directions (vectors) of evolution.
  • And let’s also look at even less obvious trends in this market.

--

--

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store