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Nansen: Will the NFT project dump your Ethereum?

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What exactly do the project parties do with all the ETH they receive?

原文标题：《 Do NFT Projects Dump Your Ether? 》

Source: Nansen

Kyle, the Way of DeFi

Special thanks to Daryl Lau from Mechanism Capital for his help with this article. Due to differences in smart contracts, Art Blocks and Cryptopunks are not included in this study.

Secondary market indicators

Six months ago, no one would have thought OpenSea would end up at the top of the Ethereum Gas Tracker rankings and compete with Uniswap. Today, OpenSea is the second largest gas consumption application, often accounting for 10-20% of the total gas consumption market. OpenSea is currently the largest NFT secondary market. After a project owner or artist casts an NFT for a crypto art project, they start trading on OpenSea, and other collectors start picking and bidding for NFT works they like.

Charting historical transactions with the number of independent buyers since July, we can see that secondary buyers' interest in NFT began to wane in August. A decline in Ethereum transactions could indicate lower sales prices, while a decrease in the number of independent NFT buyers could indicate a lack of new entrants to the NFT space.

Nonetheless, NFT trading volumes have rebounded strongly since the August 19 low. This matched OpenSea's average NFT transaction price spike.

Interestingly, the average ETH price sold by NFT has remained relatively stable since July, which represents an increase in dollar value per NFT. The maximum daily price for secondary NFT sales has also been on a general upward trend.

Investigation of NFT project pattern & NBSP;

Now, we move from the secondary NFT market to the primary NFT market. We can map out a universe of 645 NFT projects. It is estimated that about 84,000 ETH have been deposited into erC-721 NFT contracts since June. This constitutes the bulk of the accumulated "sales revenue" from the addresses where these NFTS were first cast. About 75,000 ETH have been transferred from such contracts. 573 projects have transferred ETH out, while 72 projects still haven't moved ETH from their vaults.

Project distribution by main sales revenue & NBSP;

Only 80 projects achieved tier 1 sales revenue of 300 ETH or more. The median income for ETH is 10.2 ETH.

Accumulated project sales revenue until August 16

NFT casting participation by address

From June to mid-August, an estimated 75,682 addresses cast NFT, generating an average of 3.16 unique NFT per address (mean). Interestingly, most addresses create only one unique NFT project.

What happens to these Ethereum revenues -- or will these projects dump your ETH

What does the project side do with all the ETH they receive? For now, we only look at projects with sales revenue of more than 20 ETH and analyze ETH transfers from project coffers since June. This is usually based on contract calls recorded as internal transactions on Etherscan.

We get a list of recipients and find out which addresses they send ETH to after receiving it from their respective projects.

Get the list of addresses further and check whether they are physical or contract addresses. If it is a contract address, we do not track any further transactions from these addresses and remove them from the list of senders in the next step. If not, find out to which address they sent the ETH after receiving it from previous sources.

Repeat the preceding steps twice. Thus, a total of four levels of transfer were found.

Since each subsequent recipient address may spend more Ethereum than they receive from an NFT sale, there is no clear way to categorically qualify whether the Ethereum they spend "comes from" additional NFT revenue. However, we can assume that the percentage spent by each type of entity should be a representative measure of how they choose to spend their income. The results are as follows.

About 52.3% of Ethereum from major NFT sales is still circulating in non-physical wallets. 10.4% has been used in DEX for liquidity or exchange. 3.6% has been deposited into the centralised exchange, while 17.7% has been re-injected into the NFT project. This includes markets such as NFT foundry and OpenSea or Rarible.

We removed ETH flows to non-physical parts and more specifically examined Ethereum flows to physical parts.

Almost 22% of ETH funds flow back to OpenSea, presumably to buy more NFT. Binance took the top spot in CEX deposits, accounting for 13.75% of Ethereum traffic to physical entities. Uniswap followed with 9%. About 6% is also used for CryptoPunk related activities, possibly to fund purchases.

Conclusion & have spent

NFT is a new vertical product that captures the product market matching point. However, the industry is still caught up in some profit-seeking practices. There are also chain signs that the founders of certain projects are deliberately overpaying for certain items, which could indicate shuffling deals. Nonetheless, the healthy distribution of NFT mints and the increasing number of unique buyers show that the NFT community is really growing organically. Some projects stand out under their own community governance by reinvesting major sales revenue into NFT.