Author: Mason Nystrom

Original source: Messari Research

According to data released by the NFT analysis platform NFTGo, the current total market value of the encryption industry is as high as US$2 trillion, of which the market value of NFT exceeds US$15 billion, accounting for about 1%.

In addition to the well-known avatar and art NFTs, there are a variety of NFT types, including:

• Avatar - BAYC, Punks, VeeFriends

• Game Assets - Loot, Sorare, ASm AIFA Genesis

• Utility assets - membership assets

• Metaverse assets - Sandbox assets (non-land)

• Digital Land- Sandbox LAND, Decentraland

• Social - HeadDAO, LinksDAO, MetaHero Universe

• Intellectual Property - Adidas, Budverse Cans, Pepsi Mic Drop, Twitter collection

• Music - Deafbeef, Eulerbeats, Kloud

• Finance/Decentralized Finance- Uniswap liquidity positions, yield bearing NFTs

At present, the total market value of NFT is 18 billion US dollars, of which avatar NFT accounts for the largest proportion, with a market value of 8 billion US dollars, exceeding the sum of the market value of various NFTs ranked second to fourth.

Games, art, and collectible NFTs follow closely behind, with a market value between 2.3 billion and 3.3 billion US dollars, and they are also the most concerned areas for most consumers.

However, since some NFTs can be classified into multiple types, how to reasonably classify each NFT is also extremely challenging. For example, if Nike released avatar-like NFT projects, are these NFTs counted as IP or avatars? As the NFT market matures, these types will become more clearly defined.

In terms of percentage, the market value of avatar-type NFT accounts for nearly 50%, while the market value of other sub-categories is mostly only single digits.

Head NFT types will continue to expand with the development of the NFT market, such as art NFT. Compared with the global art market with a market value of US$1.7 trillion, the art NFT market is like the tip of the iceberg.

At the same time, types of NFTs such as collectibles will fade away over time, while NFTs with practicality will come to the fore, including other subscription benefits such as membership and cash flow.

At present, the cumulative transaction volume of the NFT industry has exceeded 28 billion US dollars. With the continuous influx of newcomers and more and more companies using existing IP or launching new IP to issue non-homogeneous tokens, this industry will continue to prosper. Similar to the figure above, avatars, art, and collectible NFTs account for the majority of transactions.

But more importantly, these NFTs are fundamentally static NFTs, which means that the vast majority of them provide no additional utility beyond representing ownership of the corresponding asset and access to Discord.

Although static NFTs are very precious, as investors gradually tend to pursue a better experience through the assets they hold, people's demand for non-static NFTs will continue to rise, mainly including game assets, practical assets, and music NFTs.

Except for game NFTs, the percentage distribution chart of the transaction volume of other types of NFTs is largely similar to its market value distribution chart. It is worth mentioning that the trading value of game assets is lower than their market value, which means that many game assets in the collection may not have been traded.

While cumulative data can reveal a lot, they cannot provide a more forward-looking perspective. The statistical chart of transaction volume within 30 days shows that the transaction volume of game NFT has surged, which also reveals the reason for its high market value and low cumulative transaction volume. Since the market value calculation is usually based on the most recent transaction price of the NFT collection, the market value tends to grow faster than the transaction volume.

On the one hand, the growth of game NFT transaction volume may mark the further recovery of the game industry, which is also reflected in the promotion of the market value growth of the game industry by homogeneous game tokens.

On the other hand, NFT may also be a lagging indicator, and the surge of homogeneous game tokens is a catalyst to boost the development of game NFT. In the future, the difference between homogeneous and non-homogeneous game Token market performance will be an important indicator to measure the development trajectory of the game industry.

In addition to the game market, there is also a huge difference between the transaction volume of the NFT art market and its cumulative total, and some of the transaction volume comes from avatar NFT projects. Crypto art sales will continue to be dominated by four major platforms, namely Art Blocks, Nifty Gateway, Foundation and SuperRare.

In the end, the long tail of intangible assets will be tokenized on the chain, and the types in the NFT market will become more and more abundant. In the past few months, despite the overall downward trend of the encryption market, the NFT market has continued to hit new highs.

Both NFT traders and investors should bear in mind the following two seemingly opposing views-in the long run, the NFT market will continue to develop and grow into a market of hundreds of billions of dollars; but in certain periods, the NFT market may also be Generally overrated.