Transfers of non-fungible tokens or NFT have surpassed those of US dollar-pegged stablecoins and altcoins, while the supply of wrapped Bitcoins remained relatively stagnant in the last few months, according to an update from Coin Metrics.
Daily NFT transfers topped 50,000 on average since July and maintained an upward trend to such an extent that the daily NFT transfers are now averaging 300,000. On the other hand, transfers of altcoins and stablecoins have decreased steadily since July.
Altcoin transfers have fallen to 30,000 per day from 42,000 while transfer of stabelcoins are down to 18,000 per day from an average of 24,000 per day in July. These numbers make it clear that NFT have become more popular than they have ever been.
Last weekend, however, the NFT world was briefly thrown into chaos when some OpenSea users were hit by an email phishing scam and NFTs worth millions of dollars were stolen. The chaos was temporary, as transfers of ERC-721, the token standard for NFT on the Ethereum network, barely slowed down at that time but soon bounced back to all-time highs.
OpenSea is currently the all-time leader in NFT trading volume with US $21.85 in traded value but other marketplaces like LooksRare threatens to challenge the dominance of OpenSea. LooksRare, launched in early January, was able to bring in a large swathe of customers by offering only 2% of basic sales and zero fees on private sales, compared to 2.5% fees on every transaction on OpenSea.
The NFT collections that helped LooksRare zoom on popularity charts are Meebits, that come from LarvaLabs, the same creators behind CryptoPunks and Autoglyphs.
LooksRare also allows traders to earn rewards in the form of its native LOOKS token for buying and selling NFTs. However, the rising popularity of LooksRare is also seen as controversial, as there are reports of the platform overflowing with wash trading to rig the token-based rewards system. Some users and journalists have observed and reported a number of repeated false transactions.
Meanwhile, the surge in trading volumes on OpenSea in recent weeks appeared to be fueled by the price increase in Bored Ape Yacht Club (BAYC) and its sibling collections Mutant Ape Yacht Club (MAYC) and Bored Ape Kennel Club (BAKC). BAYC, which has a large number of celebrity owners, is still the most popular NFT collection on OpenSea.
OpenSea, incidentally, announced a US $300 million Series C funding early this year, led by venture capital firms Paradigm and Coatue. The fresh infusion of funds raised OpenSea’s valuation to US $13.3 billion and the firm plans to use the funds for product improvement and hiring of new employees.
The popularity of NFT is partly attributed to the expansion of pro sports and music industry into NFT and the growth of virtual real estate. For example, NFL superstar Tom Brady raised US $170 million in January to help scale up his Autograph NFT marketplace and recording artist John Legend launched an NFT platform in February for musicians to tokenize their work.
Besides, many NFT projects or collections are collaborating with strong thought leaders, brands and communities to increase their overall value in terms of social and investment capital.
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