Ordinals trading volume dropped 97%? A brief discussion on the three major errors reported by DappRadar
Original author: trevor.btc
Original compilation: Luffy, Foresight News
Recently, the author @the_LeticiaMelo from DappRadar published an article about Ordinalspopular articles, saying that Ordinals transactions have fallen 97% since May, but this data is not accurate.
The article was subsequently reposted by Cointelegraphs Brian Quarmby, further fueling the spread of misinformation.
For the uninitiated, you might think that DappRadar does a deep dive. But this is not the first time that DappRadar has made mistakes. I remember DappRadar made a major announcement when it launched Stacks integration in 2022, and all the data was wrong. They launched a dashboard ranking apps by TVL, active users, etc., but none of the numbers were right.
Unfortunately, this article on Ordinals is another example of DappRadar publishing misinformation.
What’s wrong with DappRadar?
1. Trading volume data error
DappRadar claims that Ordinals saw $452 million in volume in May and $35 million in July. July was down 92% from May. is it right? No.
Ordinals volume was $195M in May and $65M in July, according to @cryptoslamio.
I know, theres still a massive 66% drop, but it tells a very different story than DappRadar.
Lets look at another set of data. @domodatas Ordinals Marketplaces Dune data dashboard shows that Ordinals sales were $155 million in May and $50 million in July. This is almost identical to the 68% drop shown by CryptoSlam.
There is no doubt that the market is falling after the hype cycle, but as you can see, DappRadars data on the extent of the decline is not accurate.
As any math geek knows, a 92% drop is worse than a 67% drop and then another 67% drop.
So DappRadars data is not only inaccurate, but also highly misleading.
2. No mention of BRC-20
The DappRadar article does not mention BRC-20.
According to Dune, 74% of May sales were from the BRC-20, which I think is a major oversight.
Why? This article compares the BRC-20 + Bitcoin NFT volume trend with the Ethereum and Polygon NFT volume trends. When writing about NFTs, you shouldnt mix inappropriate data.
3. It makes no sense to compare ATH in the hype cycle with mature ecosystems that are not in the hype cycle.
Quoting DappRadar author Leticia:
“Bitcoin Ordinals faced a steeper decline, hinting at possible concerns about its platform or the utility of its NFT products.
Its important to understand that while Bitcoin Ordinals have brought innovation, Ethereum and Polygon have longer-standing reputations and wider adoption in the NFT space, making them less susceptible to drastic changes in the market.
So this begs the question, has Ethereum NFT trading volume ever experienced a significant drop in two months?
Yes, they are also bound to fall.
According to Dune analysis:
From January to March 2023, NFT transaction volume on Ethereum dropped 49%
From April to June 2023, NFT transaction volume on Ethereum dropped 77%
The drop in trading volume that happened to Ordinals is not uncommon during the NFT hype cycle. In fact, the situation for Ethereum in April 2023 was even worse.
Keep in mind that even Bitcoin fell 76% from a high of $68,000 to a low of $16,000, albeit over a much longer time frame.
Concluding Thoughts
Are Ordinals accelerating the hype cycle? Absolutely.
Has Ordinals trading volume dropped significantly compared to its peak? Yes.
Can it fall further? certainly.
But so what?
The Ordinals Market is no different than any other new asset in the space, nor what weve seen in other NFT ecosystems.
History always repeats itself in a sense. A lot of people know that a dip will happen sooner or later, but that hasnt changed my belief in technology or the future of the space.
