State of the Market
Trading volumes on NFT marketplaces have been hovering around their lows for the year. This week is no exception. Low transaction volumes directly impact the revenue generated by marketplaces. This week OpenSea let go of 20% of its employees in preparation for various “crypto winter” scenarios, one of which includes remaining at the current trading volumes for the next 5 years. This is surprising news as OS had been highly profitable, generating over $1B in revenue in 2021. We could see similar measures by other marketplaces if conditions do not improve.
LooksRare continues to build through the current downturn. The number of daily users has fallen significantly since earlier in the year. However, transaction volumes (filtered for wash trading) are significantly higher than in Jan-Feb 2022, showing that it is starting to gain meaningful adoption among NFT traders.
It is worth noting that $LOOKS tokens from the private sale unlocked this week. Since the unlock, approximately 50% of unlocked private sale tokens have been staked, and less than 10% have been sold on a DEX. This suggests that private sale investors are generally still bullish on LooksRare.
Despite the market downtrend, the number of NFT buyers remains relatively steady on most days. The number of first-time buyers fluctuates between 5,000 – 10,000 daily. Overall, this is a healthy sign that there is still buying demand for NFTs. Since total transaction volume has fallen while users remain relatively constant, we can infer that the average transaction size & volume per user has also fallen.
Top NFT Collections This Week
- We like the Punks. There have been huge volumes of trading in CryptoPunks this week with no obvious catalyst. The differential in floor price between Punks & Apes is now <10 ETH, and we could see the Punks overtake the Apes again quite soon.
- Yuga Labs successfully completed its First Trip metaverse tech demo over the weekend. Reviews from participants were general
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