Glassnode Market Insight: NFT activity is booming and chain gaming is exploding

Glassnode: Behind the Rebound of ETH: NFT and The Explosive Growth of Gaming

By Luke Posey

The original article was compiled by Vivian

ETH continued to rebound from its July lows, breaking through $2,500 on the back of increased network usage.This increased interest has been driven mainly by the explosive growth of NFTs and games.With the upcoming London hard fork and IP-1559 becoming a secondary topic for cryptocurrencies, ETH prices have happily grabbed the NFT's tail.

The rise of NFTs has left DeFi temporarily in its shadow, leaving every market participant wondering what will happen next for NFT. In this article, we will explore:

- A quick introduction to NFT and its history.

- Prices of NFT collectibles have exploded in the past few months.

-OpenSea Exchange growth and broad indicators of NFT traders and their activities.

- The rise of NFT games.

The overwhelming source of ethereum network adoption since DeFi summer has been Uniswap V2.Uniswap is still a dominant gas consumer, but over the past few weeks we have often seen Uniswap ranking second or third in total gas consumption by hours or even days, firmly behind non-homogeneous Token (NFT) projects, mainly collectibles auctions. See the daily consumption for August 2 below as an example.

Source: Parsec Finance

This gas consumption incident is still insignificant compared to the peak of DeFi activity in the summer and beyond. At that time, more than 800,000 addresses were interacting with Uniswap every month; today that number has dropped to less than 340,000. In other words,OpenSea and other NFT exchanges follow a number of major cryptocurrency projects in terms of active addresses.

Unlike regular encrypted tokens, NFTs are not fakeable, meaning that each Token is unique and valued independently. Most Ethereum NFTs comply with the ERC-721 standard, the homogenized Token standard for Ethereum. With the support of this standard, a whole generation of 1/1 art and 1/ X themed releases have been launched and have been a great success.

As the NFT's art and collection marks a new era, the exchange of items was previously very personal and non-social. Buyers/sellers no longer have to wait for slow centralized parties to list their assets, ship and trade, organize an auction day, or approve their sale through a centralized entity.The NFT allows transactions to take place on a peer-to-peer basis, swapping ownership of these collectibles around the clock. Major trading venues for NFTs include the OpenSea Exchange and Rarible.

1/1 artwork is those works cast by the artist on the blockchain, as a single NFT. They are released separately, sometimes as multiple copies of the same work. A 1/ X collection is a collection of NFT with unique properties, usually adhering to a few themes. Cryptopunks are the most valuable of these 1/ X collectibles.

What makes these NFT's valuable?

Value comes from status, scarcity, community, and reputation.

A (relatively) liquid market that allows traders to interact and participate in price discovery around the clock.

Issues with the rarest characteristics in each collectible tend to trade at the highest price, traded and priced in ETH. Rarity increases interest in NFT and holder status. Note that the average price of cryptocurrencies has risen sharply. They have exploded, with countless popular figures inside and outside cryptocurrencies holding and showing off their Punks.

Many savvy NFT investors follow the hottest drops, track new projects, and try to understand which projects will gain interest from the NFT community.The projects with the strongest price growth tend to have large Discord communities,There, NFT owners from the series discuss their interests and make friends based on their common interests. Take the Bored Apes Yacht Club for example.

Bored Apes launched in late April, just three months ago. NFTs investors like Bored Apes cast their NFT from a limited number. The project usually has a start date and anyone interested can compete to forge their own NFT from a limited supply. Once the ceiling is reached, there is no more.

The standard mint price for each collectible usually hovers between 0.02ETH and 0.08ETH. Once these NFT's are fully cast, they can only be purchased on secondary markets such as OpenSea. Bored Apes sold their 10,000 unique Apes for 0.08ETH each. Since its launch, the price on the secondary market has far exceeded the selling price of this 0.08ETH.

OpenSea saw explosive usage growth in 2021.This secondary market provides a variety of configurations for NFT trading. NFT creators can even incorporate a royalty into their projects, allowing them to receive a cut of the transaction every time their NFT is traded. In addition, OpenSea supports various types of sales. Fixed price and variable style auctions are the most popular.

Usage exploded in July and is now on the rise in August, which is expected to be a record month if usage continues at this rate; This chart may seem silly, but it reflects the speed at which OpenSea completed $100 million in dollar transactions in just a few days in August. How many times have you seen this level of growth?

This crazy growth of OpenSea is driven by huge user growth and widespread interest in the field.In July, 63,000 addresses interacted with OpenSea. Over three days in August, 28,000 addresses had already interacted with the exchange. The explosive growth in NFT interest over the past three days is explored below, based on the number of addresses interacting with OpenSea. For comparison, the popular DEX Sushiswap had 34,000 addresses interact with it during the entire month of July.

NFTs in the game

In other areas of explosive growth... In the past few months, encryption games have come to the fore,Axie InfinityThe market value of Token$AXS has grown from $200 million to a $2 billion market value during July. It did this because the base game reached a large audience.

Axie Infinity plays a lot like Hearthstone and Pokemon.Players use their collection of Axies with different characteristics to fight each other. Before the match, players rank their Axies. In the game, players choose when to allocate energy to their Axies. The Axies then hurled skills at opponents that were targeted based on the position set before the game (thanks to Axie Scholar FluctusLux for an explanation).

Signs that the project has been adopted can be seen in gas usage throughout May/June. In July, it continued its historic growth, with a peak of over 250,000 daily active users and 30-day transactions of playable characters (Axies) in the game exceeding $500 million.

Source: Dappradar Axie Infinity layout

Exchanges on the secondary market for Axie NFT have also been explosive. OpenSea and Axie Marketplace have seen more than $700 million in 30-day trading, with more than 230,000 traders and 1.4 million cumulative sales.

Source: Dappradar Axie Infinity layout

Various other games have been announced or released recently. Parallel, another popular game, recently released its first batch of cards for its upcoming card game. These cards are special early running cards with unique designs. The same cards will be available for purchase at a later date for use in the game, but not as fancy as the cards originally running. Think about it, it's like trading a holographic fire-breathing dragon against a regular fire-breathing dragon (as explained by @defiduck_karoo).Holocaine has higher value because of its rarity and status.

conclusion

We can expect more and more NFT projects to continue to roll out,And have different legitimacy and staying power. Art and culture move fast, and today's interesting NFT may soon be forgotten by tomorrow. While we can't quantify status, we can quantify price, transaction activity, number of holders, community size, and try to understand demand for the entire NFT space.

The existence of the NFT is so closely tied to the culture of DeFi that we would be remiss if we ignored it. Increased interest in NFT is as reasonable a catalyst for ETH prices as any other use on the network. How capital from DeFi < --> ETH < --> Where NFTs go is anyone's guess.

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