Data in the heat wave: What we discovered from the data behind the NFT…

Abstract: Special thanks to Daryl Lau from Mechanism Capital for his comment. Due to the difference in smart contracts, Art Blocks and Cryptopunks are not included in this study.

Data in the heat wave: What we discovered from the data behind the NFT...

Secondary market indicators

As early as half a year ago, no one would have thought that OpenSea would eventually top the Gas fee tracking list and be able to compete with Uniswap. Today, OpenSea is the second largest gas consumer entity, often occupying 10-20% of the gas in the Ethereum market. It is currently the largest secondary market for NFTs. After the NFT of an art project was minted, they began trading on OpenSea, and other collectors selected and bid on their favorite NFT.

Data in the heat wave: What we discovered from the data behind the NFT...

Combining the historical transaction volume with the number of independent buyers since July, we can see that the interest of secondary buyers in NFT has begun to weaken in August. The decline in Ethereum transaction volume may indicate a decline in sales prices, while the decrease in the number of independent NFT buyers may indicate a lack of new participants to enter the NFT field.

However, since the August 19 low, NFT trading has seen a strong rebound. This matches the surge in the average transaction price of NFT on OpenSea.

Data in the heat wave: What we discovered from the data behind the NFT...

Interestingly, since July, the average ETH price sold by NFTs has remained relatively stable, which means that the dollar value of each NFT has increased. The daily highest price obtained by secondary NFT sales has also been on an overall upward trend.

Investigate the status of the NFT project

Now, we are moving from the secondary NFT market to the primary NFT market. We got a universe of 645 NFT projects. It is estimated that since June, approximately 84,000 ETH has been deposited into ERC-721 NFT contracts. This constitutes the main “sales revenue” accumulated from the addresses where these NFTs were first minted. Approximately 75,000 ETH has been transferred from these contracts. 573 projects have already transferred out ETH, and 72 projects still haven’t touched the ETH in their inventory.

Distribution of items by main sales revenue

Only 80 projects have major sales revenues of 300 ETH and above. The median return is 10.2 ETH.

Data in the heat wave: What we discovered from the data behind the NFT...

Participation of casters by address

From June to mid-August, an estimated 75,682 addresses minted NFT, with an average of 3.16 independent mints (average). Interestingly, most of the addresses only cast an independent NFT project.

Data in the heat wave: What we discovered from the data behind the NFT...

Where did the project party’s income go in the end?

What did the project do to all the ETH they received? Now, we only study the projects whose main sales revenue exceeds 20 ETH, and analyze the ETH that has been transferred from the project library since June. This is usually a contract call recorded as an internal transaction on Etherscan.

We took the list of payees to find out which addresses they sent ETH to after they received ETH from their respective projects.

Take this address list further and check whether they are physical addresses or whether they are contract addresses. If so, we will not track any further transactions with these addresses and will remove them from the sender list in the next step. If they are not, find out which addresses they have sent Ethereum to after receiving ETH from the previous source.

Repeat the above steps 2 more times, a total of 4 types of transfers were found.

Because each subsequent recipient address may spend more ETH than it gets from NFT sales, there is no clear way to absolutely limit whether the ETH they spend “from” that additional NFT income. However, we can assume that the percentage of expenditure on each type of entity should be a representative measure of how they choose to spend their income. The results are as follows:

Data in the heat wave: What we discovered from the data behind the NFT...

Approximately 52.3% of Ethereum from primary NFT sales is still circulating in non-physical wallets. 10.4% is used for DEX, either as liquidity or swaps. 3.6% were deposited in centralized exchanges, while 17.7% were reinvested in NFT projects. This includes NFT mines and markets such as OpenSea or Rarible .

Let’s remove the ETH that flows to non-physical entities, and more specifically examine the part of Ethereum that flows to users.

Data in the heat wave: What we discovered from the data behind the NFT...

Nearly 22% of the revenue was returned to OpenSea, estimated to be for the purchase of more NFTs. Binance tops the list in terms of CEX deposits, accounting for 13.75% of the Ethereum flow to entities. Uniswap followed closely behind with 9%. Approximately 6% is also used in CryptoPunk related activities, possibly as purchase capital.

in conclusion

NFTs are a bright new vertical field that seizes opportunities between products and markets. However, the industry is still discovered by certain profit-seeking practices. There are also some signs on the chain that the founders are raising the floor price for certain projects. This behavior may indicate an ongoing hedging transaction. However, the healthy distribution of NFT miners and the increase in the number of independent buyers indicate the true organic growth of the NFT community. Some projects are also outstanding. Under the management of their own communities, the project parties reinvest the main sales income in NFT.

Author | Ling Young Loon

Original link:

https://www.nansen.ai/research/do-nft-projects-dump-your-etherLing Young Loon

 

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