Nansen: How does the NFT project party handle the raised ETH?
Original source:Nansen
Compilation of the original text: The Way of DeFi
Original source:
Compilation of the original text: The Way of DeFi
In the first half of 2022, market participants spent approximately $2.7 billion on minting NFTs. So what exactly do NFT projects do with the money they raise?
Between January 1 and June 30, 2022, market participants spent 963,227 ETH (~$2.7 billion) on the Ethereum blockchain for the minting of NFTs.
About half (50.7%) of the ETH raised by the NFT project party remained in their own hands, while 45.7% of the ETH was circulated to non-physical wallets.
Cumulatively, the top five NFT projects that raised ETH through minting raised a cumulative 81,364 ETH; an estimated 8.4% of the total ETH raised by all projects during the observation period.research articleNansen previously published a
, the article traces the flow of ether (ETH) raised by NFT collectibles through primary sales (i.e. minting of NFTs). For almost a year, we revisited this research topic to see if the trends we identified before still hold. Specifically, what do NFT collectibles do with the ETH they raise?
Investigating NFT minting on Ethereum
image description
The current study analyzes the flow of ETH obtained by project parties through the sale of major NFT collectibles between January 1 and June 30, 2022. During this period, market participants spent 963,227 ETH (~$2.7 billion) on NFT minting. A total of 1,088,888 wallets participated in the minting activity. However, the number of wallets involved in minting NFTs has increased to over 1.5 million unique wallets when the free minting event is included.
image description
image description
image description
image description
NFT Activity Volume on Avalanche (January 1-May 31, 2022)
image description
current research scope
During the study period, a total of 28,986 NFT collectibles were deployed on Ethereum. These projects raised a total of 963,227 ETH. Interestingly, no more than half of the items in these NFT collectibles were free NFT minted items (51.6%, n=14961). For NFT projects that successfully raised ETH through minting, almost two-thirds of these projects (65.8%, n=9229) raised less than 5 ETH. Projects raised a median of 1.43 ETH and an average of 59.4 ETH. A total of 140 NFT collectible items raised over 1000 ETH. Therefore, the amount of money raised through minting still varies greatly between different NFT collectibles.
NFT collectibles by amount of ETH raised (for contracts deployed between January 1st and June 30th, 2022)
As the number of unique wallets participating in NFT minting activity grew, we also witnessed a slight increase in the average NFT minted volume per wallet during this period, reaching 3.65, up from the previously reported average of 3.16.
image description
NFT minting participation by wallet address (excluding free minting)
For contracts deployed between January 1st and June 30th, 2022
Similar to our previous findings, most wallet addresses continued to mint a unique NFT during the observation period (51.7%, n=563348).
In this part of the analysis, we followed the research parameters set by the original study - analyzing projects with primary sales revenue of more than 20 ETH between January 1st and June 30th, 2022. ETH is transferred from the project's treasury, usually as a contract call on Etherscan as an internal transaction record. We use Nansen's wallet address label database to analyze the outflow of the above ETH. Here, Nansen defines a non-physical wallet as an address whose owner or known entity we cannot determine. In some cases, such an address may still have a name (for example, nansen.eth). In short, non-physical wallets are usually private and untagged wallets.
image description
Outflow distribution of raised ETH
image description
In the newer study, previous research observations were challenged. Most of the ETH raised during the primary sale now stays with the NFT project. Half (50.7%) of the ETH raised by NFT projects has been retained. Only 0.2% of ETH is sent to centralized exchanges or centralized exchanges. Finally, about 3.5% of outflows were categorized as “other” wallets, including service providers, angel investors or charities.
The table below breaks down the top 20 non-physical wallets that received ETH from January 1st to June 30th, 2022. Top non-physical wallets include ETH millionaires, wallets that used EIP1559, NFT collectors, exchanges for heavy decentralized exchanges, and some private wallets. As the graph shows, Vee Friends Series 2 accounted for 5 of the top 20 transfers to non-physical wallets; it primarily made transfers to wallets identified as highly active wallets.
image description
We acknowledge that this study only looked at direct transfers from NFT project addresses to instant transaction addresses. In other words, we still do not capture transactions from these wallet addresses to other potential subsequent counterparties, which further limits our findings. Therefore, we reviewed the top 5 NFT collectibles ranked by the amount of ETH raised to track the flow of ETH raised. Using Nansen's wallet analyzer and counterparty features, we provide an in-depth analysis of each NFT series and the flow of ETH raised through its main sale.
On-chain data shows that Pixelmon - Generation 1 has become the number one NFT series in terms of ETH raised through its main sale. The table below lists the top five NFT collections. They raised a total of 81,364 ETH, an estimated 8.4% of the total ETH raised by all projects during the observation period.
Pixelmon–Generation 1
image description
Moonbirds
Top 5 NFT Projects by ETH Raised
VeeFriends Series 2
The ETH raised by Pixelmon-Generation through the primary sale was transferred to another wallet identified as Nansen’s “Gnosis Security Proxy” (private) wallet. (0xf6 bd9 fc094 f7 ab74 a846 e5 d82 a822540 ee6 c6971) on Nansen, which may be the implementation of the project group's multi-signature wallet. While conducting our investigation, we found relatively sporadic activity on this wallet. The analysis of the transaction parties of this wallet shows that the funds raised are transferred out of this wallet in the form of USDC (57%) or WETH (43%).
World of Woman Galaxy（WoWG）
For Moonbirds, the ETH received by the project through the primary sale was transferred to the Moonbirds public mint beneficiary address (0x000 ddf0 af676 ec8 e21 d77 c5 af8166 a95531 a1668). From the beneficiary wallet, another 19.7 k ETH was transferred to several Gemini-pegged wallets.
Genesis Box
Most of the ETH raised from WoWG was transferred to Nansen's wallet labeled 'OpenSea Royal Recipient' (0x646 b9 ed09 b130899 be4 c4 bec114 a1 aa94618 be09) - an address that likely belonged to the WoW team. Most of the ETH from this wallet was then transferred to a wallet address associated with the EIP 1559 user of this new wallet.
to reflect
to reflect
disclaimer
In our first attempt to track what happened to ETH raised through tier one sales, we found that most of the funds raised were moved to non-physical wallets. In our updated research, this is no longer the case, and half of the ETH raised by the NFT project party is retained. However, 45.7% of ETH raised funds were transferred to non-physical wallets. Since our original research, Nansen has continuously improved our labels and metrics. This increase in wallet labeling may have contributed to the statistical findings of this study, in which more physical wallets were captured. Improvements to our labels also mean that on-chain investigations and due diligence are easier to conduct. The original study was conducted within the constraints of filtering out ongoing wash trading, and the current study was also conducted after incorporating Nansen's wash trading filter, which helped to improve the quality of the investigative work. Reflecting on the on-chain results, we stand by our conclusion that the minting of the NFT market remains in a very healthy state as the average minting volume per unique wallet address increases. Furthermore, the on-chain evidence of NFT collectibles reinvesting major sales proceeds into NFTs points to the presence of conscientious builders and creators in this market.
