![]() ![]() The new standard effectively turns any NFT into its own digital wallet or smart contract account. A few of the most highly anticipated upcoming titles include Illuvium, Star Atlas, Metalcore, Shrapnel and Otherside.įurthermore, the launch of the ERC-6551 token standard on the Ethereum blockchain, may enable new functionality and uses for NFTs. It can take 5-10 years to develop high-quality games, so the first big hit titles could be expected to arrive within the next few years. Many of these games require NFTs to represent ownership of in-game assets or the digital identities of players. Gaming was one of the darlings for Web3 venture investors, with investment in the sector estimated to total $10 billion. As new projects enter the sector, bullish cycles are created leading to greater innovation and adoption, ultimately resulting in lower-quality projects rushing in, before crashing and causing the cycle to start over. Just like the broader cryptocurrency market, NFTs will continue to exhibit cyclical price performance. The NFT Blue Chip index is down 54% year to date NFTgo Outlook and Implications The index comprises blue chip collections such as CryptoPunks, Bored Apes, Art Blocks, Mutant Apes, DeGods and Azuki. – Craig Oshrin, Founder of CraigOs Crypto Corner Key StatĪccording to analytics site NFTGo, the NFT Blue Chip Index dropped 30% over the last 30 days and 54% for the past year. I am also looking at what qualifies an NFT collection to be considered a current or future blue chip.” Can the project connect to actual products and services? That, to me, is the ultimate utility. The few things I am doing as an investor: more time researching future blue chips to figure out if getting into a community makes sense. This space is still in its infancy with only those who are fully immersed able to recognize the nuances and apply it to safeguard their assets. They are less than transparent when it comes to how NFTs are viewed from a taxable standpoint and whether they are considered securities. ![]() “Part of the cause around NFTs crashing has to do with the non-supportive stance from the SEC. Blur’s token rewards may in fact be increasing liquidity as farmers are incentivized to list more assets, preventing an even greater collapse in NFT prices.īlur farmers have been aggressively selling their token rewards, and the price is sitting near its all-time low at 32 cents, down 77% from its all-time high of $1.40 in February.īlur's price is down 77% from its all-time high TradingView Key Quote ![]() However, some analysts have taken the other side of the debate. The farmers are willing to take losses because they expect to make the losses back from the Blur airdrop.” This is the closed loop, slowly cascading bids lower and lower, which also brings the floor down. The problem is farmers are dumping into bids held by other farmers, while genuine demand tends to buy at or above the floor price (collectors). Farmers have to dump assets after their bids are filled and get the ETH to place a new bid in order to continue earning points. In fact, just eight wallets traded 4,000 ETH ($7.6 million) or more on Blur in a single day in February, according to NFTstats.eth, pointing to concentration of trading among a few large players on the exchange.ĭiscussing the mechanics of Blur’s token incentive program, Bitcoin Frontier Fund Managing Partner Trevor Owens described, “The bid incentive is time based, so the longer you have a bid up, the more points you get. This activity adds selling pressure, amplifying weakness during a bear market, where fewer organic holders are entering the space and serving as the “buyer of last resort”. The program arguably incentivized large whales and mercenary traders to engage in short-term trading, dumping large NFT positions they had previously acquired to earn Blur tokens. Since February of this year, the exchange has implemented a user incentive program that rewards traders with Blur tokens for placing orders and listing NFTs. Some market analysts have also attributed the decline in NFT floor prices and volume to Blur’s rising dominance. Thus, diminishing trading volume and the shifting market structure have caused the noticeable decline in royalties, a major source of revenue for NFT projects. This has been the case among leaders such as Blur, OpenSea, Magic Eden and LooksRare. Royalties are directly tied to trading volume, with many projects requiring fees on secondary transactions that are paid to the NFT creators.Īdditionally, royalties have come under pressure as some marketplaces have made them optional, in the hopes of enticing traders to come to their platforms. Weekly royalty payments reached a peak of $76 million in April 2022, according to a recent report from data analytics platform Nansen, and subsequently collapsed 95% to $3.8 million in June. NFT creator royalties have hit a two-year low, for two reasons. ![]()
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