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NFT market hits a low point, analyzing the reasons behind it and the changes in the landscape of blue-chip NFT projects.

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After the one-year anniversary of Terra's crash, the overall NFT market has shown a downward trend, with niche NFTs dropping to zero.

Original author: 0xSevens.lens & Wang Zai

Looking back on the one-year anniversary of Terra's sharp decline, the overall trading volume of the NFT market, the issuance of new NFTs, and the prices of top blue-chip NFT projects are all showing a downward trend, and even niche NFTs in the end market have fallen to zero.

Analysis of the causes of this freezing point in a step-by-step manner:

1. Liquidity extraction in the NFT market;

2. NFT players lack confidence in the future market and are selling off their holdings.

3. FUD caused by whale selling and Blur farmers dumping blue-chip NFTs in NFT lending protocols.

From the data, it can be seen that Terra rekt is not the lowest point for most NFT prices in the market. The low point for most NFT prices hovers around April 2023, and there is a continuous downward trend in trading volume.

Yuga Labs

From the perspective of the leading players in the industry, although Yuga Labs has launched Dookey Dash, Bitcoin NFT series TwelveFold, and otherdeed 2nd beta, there has not been any new narrative gameplay to attract more players' attention and liquidity. The expansion speed of the ecosystem far exceeds the achievable benefits.

In addition, the NFT series of Yuga Labs' ecosystem has also expanded further and has not performed well in terms of price. The price of Koda was around 14E before it was separated, and the floor price of land before the element split was 2E. Now the floor prices of these two series have been cut in half.

LimitBreak

Not only Yuga Labs, but LimitBreak also faces such a problem. The diversification of NFT assets within its ecosystem has dispersed the attention and liquidity of players, leading to a decline in the prices of NFT series and further undermining the confidence of HODLers in the bear market.

BAYC

In addition, following the FTX incident, NFT whales represented by Franklin have been selling their holdings of monkeys and other blue-chip NFTs. This has indirectly led to further anxiety and panic among other NFT holders, causing confidence in the NFT market to plummet.

Backtest the trading volume of BAYC over the past year. In February of this year (02.24), we observed a surge in BAYC trading volume, with many large holders reportedly selling off according to parsec data.

One potential reason is that the bid mining reward mechanism of Blur provides a large amount of liquidity to the market while accelerating the process of the NFT market bubble bursting. (Related link)

反弹最猛的蓝筹

translates to

The strongest rebounding blue-chip stocks

Among the 32 "old blue chips", only 13 projects have seen price increases, while most "blue chips" have fallen by around 40%-90%. The returns from holding blue chip projects are far from meeting the expected Alpha yield. NFTs with good momentum have also seen significant increases in their derivatives, such as Milady and Redacted Remilio Babies, Azuki and BEANZ, Pudgypenguin and Lil penguins.

Among the top 15 NFTs in terms of trading volume, only the holders of CryptoPunks, Milady Maker, Azuki, and Pudgy Penguins have seen positive returns in the past year. (Note that Azuki experienced a community trust crisis in May of last year, with various scandals exposed and community holders selling NFTs at the lowest price at that time.) The NFTs that truly have investment value are: Milady Maker, Pudgy Penguins, and CryptoPunks.

Of the 27 projects launched within a year, 15 have seen price increases while 12 have experienced a downward trend. Among them, OpepenEdition, RedactedRemilioBabies, and Nakamigos have seen price increases of over 10 times. Overall, newly launched projects with high trading volume and high returns have experienced smaller declines compared to older NFT projects.