With each passing week, it becomes clearer that the NFT market peak has passed. Or not?
It is true. Google searches for the term “NFTs” dropped by almost a third since mid-January. And daily volume on OpenSea has dropped more than 65% since February 1, according to data from DuneAnalytics.
Don’t dismiss NFTs as just another crypto fad just yet. Even as the buzz gets agitated, the number of successful NFT projects is quietly increasing, according to a report released today by Nansen a blockchain analytics platform, and shared with The Defiant.
The proportion of minted and profitable NFT projects recently hit an all-time high, according to a chart provided in the Nansen Minters Report. This indicates that a market known for foam and blows, may be growing.
Innovative projects on NFT market
“I think we’re seeing more successful projects,” Paul Harwood, product manager at Nansen, told The Defiant. “We are seeing the market mature and the really innovative projects really taking off and maybe the cash earnings are not doing so well.”
This contrasts with January 2021, when “dead” projects (defined as having less than 10 sales in the last 30 days) accounted for nearly half of the NFT market. Now, these anemic projects represent only a fifth of NFTs minted.
The average price of the NFT coin has also fluctuated between 0.07 ETH and 1 ETH since July 2021, after seeing large spikes earlier that year. Nansen’s report suggests that bullets are getting more competitive, forcing project leaders to lower prices.
Harwood notes that the increasing proportion of projects achieving sums higher than the price of the coin is happening amid the insane growth of NFT miners. According to Nansen’s report, there were only 500 people minting NFTs at the start of 2021 and there are now a staggering 1.2 million in February.
The idea that the NFT craze is a repeat of the initial coin offering (ICO) era of 2017 has become quite frayed. However, in both periods, the best of the bunch demonstrated true staying power and wealth creation. After all, ETH was an ICO, raising $16 million in 2014, according to icodrops.com , before becoming the $300 billion smart contract network it is today. Now Bored Ape Yacht Club is forging ahead – its floor price has shot up 587% since August to 103 ETH and recently launched your own token.
There are other examples of successful ICO projects emerging from the 2017 craze – Cosmos, now a big player among smart contract platforms, it raised $17.3 million in 2017 and its ATOM token now has a market cap of $8.1 billion. ChainLink , Decentral and , Tezos and others also held ICOs in 2017 and each project is worth over $3 billion as of March 23.
NFTs may be following the same pattern. While not all NFTs fall into the same category — for every funny monkey, there are many NFTs with more prosaic utility, Javier Cerdán González, a research engineer at Nansen, told The Defiant. He said he found Solana’s NFTs to be particularly oriented towards public services.
With the hype cycle for NFTs may be waning, the market appears to be maturing into a new phase. This is the result of the Nansen report. While worldwide searches for NFTs may continue to fail, let’s not forget that the term “ICO” has trended towards zero since peaking in late 2017. While many have disappeared, some have thrived. The same can be said of NFTs.