In an article published on Tuesday (4), The Wall Street Journal stated that the NFTs market is “collapsed”.
According to the article, a survey by the newspaper showed that daily sales of blockchain-based digital collectibles have dropped by more than 92% since their peak in September. Furthermore, the number of active portfolios trading NFTs would also have plummeted by a similar percentage.
However, more complete and comprehensive data indicate just the opposite.
In his article for the WSJ, Paul Vigna uses data from the latest report from the NonFungible.com platform. However, as Timothy Craig pointed out in an opinion piece, the report was based on a limited scope of data.
According to Vigna, his data covers transactions involving ERC-721 NFTs on the ETH network, NFTs on the Ronin chain used in the game Axie Infinity, and NFTs on the Flow blockchain. This, for Craig, is insufficient to analyze the big picture:
“Given the high number of ETH NFTs that now use enhanced contracts such as ERC-1155 and ERC-721A, the NonFungible sample leans towards older NFTs,” says Craig.
According to the critic of the WSJ article, the survey excludes many more recent collections, such as the Azuki, which is currently the sixth most traded NFT collection of all time. That’s because the collection uses an ERC-721A contract.
Furthermore, Craig points out that the two ETH sidechains included in the NonFungible report, Ronin and Flow, had a very bad quarter.
Ronin has seen its player base dwindle dramatically after being targeted by a $620 million hack. Meanwhile, the Flow network has seen its biggest NFT product, NBA Top Shot, plummet in recent months.
NFTs from other blockchains ignored
Still, Craig notes that, “for some reason,” NonFungible’s data does not consider NFTs based on other blockchains, such as Solana and Polygon.
According to data from CryptoSlam, the Solana network processed more than $11 million in trading volume. Polygon, meanwhile, facilitated more than $1.4 million in NFT trades in the period.
“By excluding the second and third most active chains for NFT trading, NonFungible data does not accurately represent the entire industry. Claims that the data indicate a declining NFT market are, at best, misleading,” emphasizes Craig.
Other surveys indicate a rise in NFTs
Data from the latest Dapp Radar report too indicate that Vigna is wrong. According to the survey, the number of negotiations involving NFTs reached an all-time high in the first quarter of the year.
In all, more than 116 million transactions on NFT dapps and marketplaces across all blockchains were recorded. This is a 22% increase from the fourth quarter of 2021.
Another example that the NFT market remains heated is the recent case of the biggest NFT sale in history by Yuga Labs, responsible for the Bored Ape Yacht Club NFTs collection.
Last week, Yuga Labs sold over 55,000 lands for their next metaverse game. As a result, it raised more than $310 million in initial sales. Less than a week since launch, the collection has surpassed $700 million in turnover, as Craig points out.
“Vigna says the market is losing interest in NFTs. But the truth is, he doesn’t know where to look. For those who follow the space daily, the NFT craze is still going strong”, says the critic.
Finally, Craig claims that NFTs may even decline in the future in response to economic uncertainty. But for now, contrary to what The Wall Street Journal suggests, the NFT market is booming.