Market background

The usage of blockchain to create non-fungible tokens (NFT) is becoming more widespread as blockchain technology advances. A digital asset such as an image, video, or in-game item is represented by an NFT, which is a crypto asset. The NFTs are recorded under their owner’s name on the blockchain, allowing them to be traded as a substitute for the digital asset they represent.

According to marketplace data, the market for non-fungible tokens (NFTs) reached new highs in the second quarter, with $2.5 billion in sales so far in 2021.

Furthermore, NFT games generated $2.32 billion in revenue in the third quarter, according to data compiled in the annual report by the Blockchain Game Alliance. That was roughly 22% of all NFT trading volume industry-wide in the quarter as blockchain games gathered steam.

After the popularity of NFTs burst early this year, sales volumes have remained strong. In June, monthly sales volumes on OpenSea, a prominent NFT platform, hit a new high of $150 million.

Some NFT collectors regard them as collectibles with intrinsic value due to their cultural significance, while others view them as investments in which they speculate on growing prices.

Since March, buyers have outnumbered sellers by a factor of 10,000 to 20,000 every week, according to NonFungible.com, which aggregates NFT transactions on the Ethereum blockchain.

The most popular NFT buying destination was OpenSea, which accounted for $16 billion, or approximately 60%, of all NFT transactions in the 10-month period. With a transaction volume of $3 billion between March and October, CryptoPunks, an NFT collection founded in 2017, was the most popular collection.

Large NFT transactions are becoming more frequent as well. Between March and October, collector-sized sales, or those costing between $10,000 and $100,000, accounted for 63% of total transaction volume. Institutional transactions, defined as those valued more than $100,000, accounted for 26% of all activity during that time.