Beyond-the-Hype-A-Nuanced-Look-at-the-NFT-Landscape-in-July
In July 2023, the volatility of the NFT market continued, characterized by declining trading volumes. However, the determined growth and resilience of certain sectors, such as gaz g and music NFTs, stands out. This resurgence is reflected in the increasing number of unique users engaging with these niche sectors.
This comprehensive report aims to provide a comprehensive insight into the NFT ecosystem in July 2023. It delves into key indicators such as market capitalisation, trading volumes, user engagement and the delicate balance of buyer and seller activity across prominent chains such as Ethereum and Polygon. In-depth analysis of leading platforms and marketplaces, as well as the NFT funding market.
Beyond the data, the report also highlights significant milestones and breakthroughs. For example, the story of artist Jack Butcher’s inspiring journey and creation of Opepen NFT as a heartfelt tribute to ThreadGuy. These stories go beyond numbers and statistics to illuminate the cultural weight and spirit of collaboration that underpins the NFT space, even in times of market turbulence.
Data of this report was obtained from Footprint’s NFT research page. An easy-to-use dashboard containing the most vital stats and metrics to understand the NFT industry, updated in real-time, you can find all the latest about trades, projects, fundings, and more by clicking here.
Throughout July 2023, the value of bitcoin remained mainly in the range of $29,000 – $31,000. The cryptocurrency reached a one-year high of $31,400 on 13 July, its highest value since July the previous year.
However, despite this surge, bitcoin ended the month at a lower value of $29,230, down around 4% from its opening price of $30,587 on July 1.
In particular, muted summer trading activity and a lack of short-term positive catalysts likely contributed to bitcoin’s decline.
However, as Rachel Lin, CEO of decentralized futures exchange SynFutures, pointed out, bitcoin’s dip below $30,000 may represent a brief correction in an overarching bullish trend. This perspective reinforces bitcoin’s resilient trading range between $29,000 and $31,800 since mid-June, undeterred by factors such as interest rate hikes, inflationary fears and other macroeconomic concerns.
In the current month, the market cap of the NFTs market has remained stable at around $100 billion. However, there has been a noticeable decline in trading volume following the Azuki falls, indicating a possible cooling of market activity.
On a more positive note, the number of unique users engaging with NFTs showed a slight increase over the previous month, with 431,817 unique users recorded in the current month compared to 408,548 in June.
The Blue Chip Index is in a downtrend, signaling a deeper bearish sentiment in the market.
Major bluechip NFT projects such as Azuki and Bored Ape Yacht Club (BAYC) have experienced significant price declines. BAYC even dropped below 30 ETH this month.
This market violation reflects an increase in risk aversion among investors and a decrease in confidence in the NFT market. Investors may become more cautious and reluctant to take on riskier investments, resulting in a shift to safer assets or a reduction in overall market participation.
In July, the NFT market showed a buyer/seller ratio of 149.13%, with 299,983 buyers and 201,155 sellers, surpassing the ratio seen in the last 90 days.
The increase in buyers during this period can be attributed to the events of projects such as Planet IX and Galaxy. Specifically, as of July 23rd, Planetix had 4,932 NFT buyers compared to only 59 sellers, indicating strong demand and enthusiasm for buying NFTs. Games like Planetix continue to be a key driver of the active NFT market.
The events and activities of projects like Planet IX and Galaxy also created a significant spike in NFT unique users during the specific period of July 21-23.
In addition to the impact of gaming and quest platforms on the rise of NFTs, it is worth noting the NFT projects themselves.
One notable example is Yuga Labs, the creators of the widely known Bored Ape Yacht Club (BAYC), which recently launched “Made By Apes”, an on-chain verification solution. This platform addresses the challenge of verifying and cataloging intellectual property created by BAYC members. With the unique on-chain license provided, BAYC and Mutant Ape Yacht Club (MAYC) members can use the Yuga-made Made by Apes logo on their products and services.
Degods and Pudgy Penguins also launched similar initiatives this month. These actions represent a significant shift in recognising and promoting the value of intellectual property in the NFT space. By granting exclusive IP rights to NFT owners, these projects aim to foster creativity and innovation within their communities. This move further enhances the appeal of NFTs, elevating them from mere collectibles to valuable assets with practical, real-world applications. As the NFTs market continues to evolve, these IP-focused initiatives could play an important role in shaping its future.
Ethereum’s dominance of the NFT market continues to grow, accounting for an impressive 98.03% of the total volume. However, the absolute NFT trading volume on the Ethereum blockchain for the month of July reached a new two-year low of $660.1 million. The NFTs market as a whole is facing a period of reduced trading activity.
In July, the number of unique addresses participating in NFT transactions on the Ethereum blockchain hit a new two-year low of 163.24k. Interestingly, Polygon surpassed Ethereum in terms of unique users, with a total of 185.35k.
Looking at NFT buyer activity on Polygon, the top two platforms driving the market are PlanetIX and Galaxy, with 39,145 and 16,231 buyers respectively in July. This indicates that the current growth drivers in the NFTs market are primarily practical use cases, such as gaming and utility-oriented platforms, rather than traditional art and collectibles.
In the current market slowdown, the demand for NFTs related to images and artistic culture has weakened, while NFTs with practical uses have shown greater resilience.
In the middle of the month, Polygon made a major announcement with the release of Polygon 2.0. The introduction of a network of ZK-powered layer 2 (L2) chains will create a blockchain that can achieve both scalability and interoperability, which we should expect in the near future.
In terms of NFT marketplaces, Blur continues to dominate the market in terms of volume for large professional transactions. However, it has seen a downward trend, dropping from 64.32% to 57.94% over the 2 months. X2Y2 and LooksRare have seen a slight increase over the same period.
In terms of number of transactions and users, Opensea continues to hold the majority share and keep growing, which has been for a long time.
The NFT market has been particularly subdued in recent months, with only 3 funding rounds totalling $15.85 million in July.
NFT ticketing company Get Protocol has successfully raised $4.5 million in seed funding from investors including Flow Ventures and the Tezos Foundation.
Get Protocol aims to disrupt the ticketing industry dominated by Ticketmaster, which holds considerable power and generates substantial revenue. NFTs are seen as a solution to issues in the Web2 tech realm, offering advantages such as smoother event queuing, anti-scalping measures, and improved attendee data collection. Other NFT-based startups like YellowHeart and Tokenproof are also entering the ticketing space alongside Get Protocol.
NFT lending platform Gondi has gone live after securing $5.35 million in a seed funding round led by Hack.vc. Gondi allows users to use blue-chip NFT collections on Ethereum as collateral for loans or financial applications. The platform aims to improve NFT lending by providing accessible lending options within the Web3 ecosystem.
It’s worth noting that the NFT sector is characterized by rapid shifts in sentiment and trends. While the current downturn may be a reflection of the cautious environment, ever-evolving technological advances and increasing institutional involvement could potentially spark a new wave of interest and activity in the near future.
While the funding market has been subdued, capital continues to flow actively into the NFT sector. Of particular note this month is the surge in activity at the intersection of music and NFTs. This trend is indicative of a growing recognition that NFTs are evolving to encompass more than their original purpose of aggregating community culture.
This can be seen in initiatives such as the Mastercard Web3 Music Accelerator, which has released a number of NFT tracks, and Beatport’s launch of an NFT marketplace focused on techno music.
It’s important to recognise that for the NFT market to grow in a sustainable and prosperous way, it must excel in both practical utility and cultural engagement. Only by effectively balancing these aspects can NFTs establish themselves as valuable tools with lasting impact across multiple domains, further cementing their place in the evolving landscape of digital assets.
The NFT market is shifting towards practical uses, yet it’s still largely centered around cultural engagement.
This month, “Opepen” stirred up a wave in the market. OpenSea even changed their Twitter handle to “OpepenSea,” accompanied by the caption “for the culture.”
NFT artist Jack Butcher, who created Opepen, created a bespoke ThreadGuy Opepen NFT edition that has sent waves of excitement through the Web3 community.
Michael Jerome, better known as “Threadguy”, is known for being at the center of polarizing Web3 discussions, attracting considerable attention in the ever-evolving landscape.
Inspired by his Mutant Ape’s color palette, Butcher curated a unique Opepen design exclusively for ThreadGuy, who’s known for his involvement in the Mutant Ape Yacht Club (MAYC).
On the 17th of July, Jack Butcher introduced the “Opepen Threadition”, for provenance purposes only, and to redirect some economic energy to a massive contributor to this ecosystem. All proceeds from this initiative will be used to support ThreadGuy’s efforts and to express gratitude for his contributions to the crypto world. As of the 7th of August, this NFT has been minted 67,155 times.
Remarkably, the ripples of this event went beyond the confines of the NFTs. It highlighted the remarkable unity and altruism that exists within the community, and emphasized the profound importance of recognising and celebrating creators within the ever-evolving NFT landscape. This incident highlighted the genuine spirit and kindness of the community, demonstrating the importance of recognising creators in the rapidly evolving realm of NFTs. Many perceived Butcher’s gesture as a representation of the authentic and idealistic essence of the crypto community – one that values shared culture over mere financial gain.
People said, “For the culture.
Data includes:
This piece is contributed by the Footprint Analytics community.
The Footprint Community is a place where data and crypto enthusiasts worldwide help each other understand and gain insights about Web3, the metaverse, DeFi, GameFi, or any other area of the fledgling world of blockchain. Here you’ll find active, diverse voices supporting each other and driving the community forward.
Author: lesley@footprint.network
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