The reality of the NFT markets in 2021

Transcript

[Music] hello everyone um so yep thank you for being there um goodye i'm the ceo and co-founder of nonfrontable.com and we are about to have a global overview of what's going on on the nft market so the goal of today's presentation is just to explore if nfts are bubble is there a market crash is there only speculation so yeah we'll try to answer these uh these questions um so yeah i don't know if you ever

heard about nonetheless.com so we are basically the largest data platform about nfts so what we do is we track market history uh on the front blockchain for now but we are about to uh to track all the other flow works the blockchain the minus smart chain running and so on and we work closely with a lot of these media so if you look at an article on forbes or writers that speak about nfts there are more chance that the data are coming from non-vulnerable.com um so yeah i think you've heard about this uh global idea that nfts are just a bubble

so maybe just to start with that can you just raise your end if you own an nft oh gosh yeah that's good i guess that most of you own the nft ticket to enter fcc that's an nft definitely um so we have seen a lot a lot of articles recently about the you know the nft market crash about the bubble bursting we've seen so many of them um and one of the articles uh went pretty viral just because they explained that they had found exclusive hidden data about the nft market crash and that was kind of surprising for us

because these data were coming from our platform and we have never seen any market crash so we were just confused but our media people can just look at our data and see a market crash so we spent a lot of time just trying to understand what's going on and why people think that the nft market has crashed and so on so let's look at the market evolution um so basically you have all the data from 2020 to 2021 so basically the first semester of 2021 and what you can see is that of course there was a peak i mean if you look at that i've

picked up something like 300 million traded per week that's absolutely crazy but that's just a peak the global trend is definitely increasing so compared to a year and a half ago the nft market is just huge i mean a little more than a 50 million are traded every week in nft only on the front blockchain because as i said this is not for for flow for wax and for all the other chains so that's definitely not looking like a crush but just some sort of a stabilization after peak and just to give you a little bit of context about this metric there is difference between total sales

and total usd transacted basically with nfts you can do a lot of things but it's not just buying or selling the asset you can you know interact with a smart contract you can play you can upgrade your asset this is what we call the total usd transactive all the other things you can do with nfts basically so yeah i mean from a personal standpoint that just looks like a alfie ecosystem that is having some sort of stabilization and it's increasing at the very end of s1 2021 in terms of distribution you know that nfts can be used for gaming for art for sport for thousands of use cases

and today the most common use case in terms of uh usc traded is definitely collectible and there's an explanation for that two explanations actually the first one is crypto punks the second one is me beats i don't know if you've heard about these two projects from the same company lava labs but the prices went completely crazy i mean today the floor price of a crypto bank is something like 40 000 for just an image yeah but that's crazy but the thing is that there's a market for that um so um just to be clear if you look at the

of a volume for nba top chart on flow or other projects like that the sport segment is way way bigger than that this is only for frl but on game and sports you have of course sorel only from blockchain but you have nba top shot as well that is not is not there so um most people only look at the volume of usd trading that's important definitely the size of the market is important but the market is unfit just because there's a lot of people because there is a community because there are wallets and people that are actually buying or playing with assets so what you are there is the evolution of

the sellers the buyers and the total active wallets that interact with nfts on the front blockchain so same i mean that doesn't look like a market crash i mean if you compare to a year and a half ago everything is just way way higher so what we have today is a little more than 30 000 um wallets interacting every week with nfts for about 15 000 buyers and little less sellers what is important there as well is that there are more buyers than sellers people are not leaving the space there are more people

that try to grab new assets than people trying to dump the assets which is extremely important to monitor um what we've um identified as well is that during the nft craze of you know march march april a lot of people arrive of course a lot of new wallets arrived in vanity space and try to grab some assets or just discover what's going on um and we've looked at the retention rate of the nfc industry and the retention rate is actually really good um a little more than 60 000 wallets arrived new wallets arrived and

started to interact with nfts and 30 of them remained after the boom after the complete craze so of course it was definitely predictable that a lot of people just arrived purchasing nft and were like okay that's it there's nothing i can do with them so okay i'm done so 30 of them remain after and when you remember all these articles explaining that the market crashed as the bubblers burst and everything at that time in may june 75 000 new wallets interacted with nfts so more and more people arrive in the nfc industry and more and

more buyers arrive as well so that's absolutely not a decrease not even stabilization it's just definitely getting uh higher and faster which is pretty cool and uh just something else which is interesting uh if you look at the uh at the line at the bottom this 9000 so basically that's what we consider as the record of the nft community and that's tiny 9000 people sorry wallets not people that have been active since january until june so something really important is that

even if there is a growth a crazy growth today that's completely that's a small really small ecosystem so the room to um to grow and to develop is absolutely incredible or just at the beginning of something um we've read as well that basically all the prices went down that people basically but there was just speculation and after the speculation there was a massive dump and same i mean if you look at crypto punks the price went completely crazy and there is something to consider as well for crypto punks and basically for nfts

is that you purchase them mostly with if so the value of if has an impact on the usd price as well and i mean i won't be too long about that but there are two kind of approaches to philosophy the first one is to consider that the usd price is the reference all the people that are outside of the crypto space that arrive in the vinfd industry are like my reference is the usd price for and if maximalists they just want more heath so whichever the price of if as long as they get more if after the resale they are richer so from a usd standpoint we can consider that they have

they have lost money but not for them so that's why this kind of um of charts that taking account the usd price have to be read taking account the if value as well that's important and what you have at the bottom is the average value of all the artworks sold on super rare which is somehow the largest art marketplace so same i mean there are the peak it's not a crash it's just getting higher compared to a year and a half ago yeah this is a little messy i'm sorry basically you have the average price of all the

most liquid nfts so you have uh sore arc blocks cryptokitties if ethereum name service decentraland and the sandbox and non-origin so same if you compare to the really beginning there in 2020 the average price was something like 50 100 usd for as you say as you can see almost 1000 for most of its projects so just to give you a global overview of the of industry so more active right almost 200 000 active wallets in in the past quarter which is way way more than the

previous quarter more buyers more sellers almost a billion traded only on nfts on the farm blockchain which is massive just massive and we have a slight increase of something like three thousand percent compared to past year which is decent so um before analyzing nfc markets and energy related data there are a lot of questions that you have to to keep in mind because to be honest it's not that easy to analyze nft markets firstly just double check the sources where are the data are coming from

who has scrubbed this data how are they compiled all these information i mean if you just look at other data providers we are not the only one i mean if you look uh i can mention them i mean if you look at the product crypto slam on others they don't necessarily track the same data as we do there are dozens of approaches for that so just be clear on what kind of data you have and what does that mean and is that correlated to something else to other you know announcement in the ecosystem to the evolution of crypto markets as well the second thing is that if you try to i don't know invest or just buy something in a project

look at what we call the advanced matrix just consider the volume of usd trading is not enough i mean it can definitely be counterfeited you can just have a lot of wash training on this project and you are looking at i don't know one billion on a market that's huge but that can be fake so just try to look at how many wallets uh how loyal are there is there some sort of liquidity or attention in this community so basically just do your own research spend time i mean it's not easy it's not something you can do just like that buying something and making money and nfts are not meant just to be to be traded on the market initially

most of the nfts are meant to do something with them a domain name has definitely a use so before purchasing something ask you just this question what is the use case what am i going to do with that is it something that could be available tomorrow and um yeah that's it oh yeah maybe one one more thing um you may have seen in the previous uh slides this one that we talk about sore and so crypto ck in a project you may have different kind of nfts so you may have what we call the nft tickers on decentraland which is a

metaverse you have the land you have estates you have wearables you have the names so don't consider only the average price for decentraland that doesn't mean anything just like looking at the average price of a real estate market all around the world you won't have any useful information with that so try to look as the really most detailed information you can find and i think that's it you probably have a yeah oh an overview of what's going on on the nfp market so if you have any questions feel free

thanks a lot for the presentation i had a question regarding your slide which showed that about 70 percent of the um traffic on ethereum was just collectibles before it was a pie chart yeah that one so how for instance how do you pick a part for instance axi because actually you need a collectible to play it so where exactly does a axi fit in these categories uh actually infinity you mean yep actually infinity is definitely a game and the fact is that um yeah i mean at the end of the day uh you can consider almost everything as a cultural if you collect houses a house is a collectible if you collect pokemon cards it's supposed to be a game that's faster

collectible four axes uh they are initially meant to be part of a game where you can you know battle your little axis in an arena um so that's a game but the thing is that they have moved to running which is a side chain that we are about to track as well in a couple of weeks so if you go back to nonforgeable.com in something like a month from now you'll have all these data but updated action infinity and everything so yeah that's a game looking to the picture where do you think uh the trend is going now because i think a lot of um people are now using the

collectibles and where it's going now from your point of view um actually that's that's interesting that's a good question because collectibles were not that big six months ago but with this new community arriving in the space of this new community of people that are not extremely tech savvy or but don't really understand what they can do with nfts the most basic use case is owning something you purchase the asset you own the asset and that's it collectibles are the perfect fit for that actually there is nothing you can do with collectibles you collect them and that's it so that's why it's a really simple to understand use case for

newcomers but down the road we know that gaming and sports are extremely extremely massive uh i mean if you look at soria for example or nba top chart i mean there is definitely something people are crazy about sport sports plus nft makes sense there is definitely something about owning truly owning something about um about your your favorite club um we've seen um massive attraction last year about art and same this year with people artwork sold for 69 million a couple of months ago so honestly i think that collectibles are definitely going to decrease in the next few months and we'll see

more and more gaming art sport utilities are still extremely tiny behind utters you have all the domain names ticketing uh all these use cases that are more related to use case over to sorry to make it to the real world use case that's still a niche segment for now hi i have a question so we're seeing a lot more companies interested to make nfts in gaming in art right but the question they always seem to have is like which platform should we use does it matter which blockchain protocol we use should we use

ethereum hive wax which one what would your recommendation be or what is your point of view on this trend um yeah that's definitely a good question because um each uh each blockchain each platform i mean you can choose the blockchain and on the blockchain for example finances you can choose different marketplaces so there is definitely a choice to make at the very beginning historically from is a main blockchain for nfts is it the best one i don't know honestly uh because if you look at what people do with the side chains we've run in with a polygon for example uh in terms of fees in terms of uh of fast transaction that's

definitely way way more handful so i won't recommend a specific chain or platform today but you definitely need to do your own research and just look at is it truly decentralized uh does is that a good fit for your project in terms of a scalability of fees this kind of thing if you know that you have to interact with the chain every second you can't pay fees each time so this is the kind of thing that you have to consider so coming back to here coming back to collectibles do you have an idea of the breakdown um for instance with crypto avatars that

we've seen uh surging nowadays projects like board the ap out club uh cool cats got a gang but do do you have a breakdown of how much the portion of these are in the collectible segment uh i don't have the figures in mind right now i know that some of them like board your board ap club and others made a very massive massive volume we consider them as collectibles but what we've seen recently is honestly hundreds of copycats of crypto packs just because it's extremely extremely easy basically to recreate 10 000 units of something

we've seen honestly we have listed them recently on on the platform so we have spent with the rest of the team uh a lot too many too much time uh just looking at this project and when you see ten thousand blah blah blah unique blah blah i mean yeah that's just a crypto bank scooby cat so yeah um what blockchain do you currently track on non-functionable if you're wrong are you planning on on expanding absolutely in a in a couple of weeks we'll be tracking uh wax flow polygon run-in did i forget one uh tesos as well and that's it and loom

room as well and the binance smart chain [Music] so yeah i think that's the exhaustive list yep i've got a question regarding composability so that's one of the use cases of nfts and it's been touted as the one thing that you can do cryptokitty and then you put it into another game is it something that you're actually seeing or is it something that you actually are able to track actually um at the top of my mind i don't know we don't see much interoperability between projects because in most cases you know issuing your own nft your own token is part of your

business model you have to create your assets sell them and you are offended like that so we haven't seen much uh in some cases we've seen basically people that uh that display their artworks from super in decentraland for example that's some sort of pleasing basic use case of displaying your assets in a metaverse metaphors are just large boxes where you can display anything you want um so no we don't see much of that that's definitely in my opinion one of the most valuable opportunities with nfts to be able to use any nft in any game or any platform around the world but i think that will arrive down the

road with a larger community with thousands and thousands of new developers in the space any other question maybe nope looks like we're good thank you thank you so much you