Original author | Liu Quankai

Original Editor | Colin Wu

If 2020 is the first year of DeFi in the cryptocurrency market, then 2021 will undoubtedly belong to NFT.

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Overview of NFT Market from OpenSea Development

It is difficult to say whether the development of OpenSea has driven the prosperity of NFT, or the outbreak of NFT has made the world know OpenSea, but the absolute overlord of the current NFT market is undoubtedly OpenSea. During this year, OpenSea has demonstrated extremely strong dominance. According to ConsenSys analysis, OpenSea's transaction volume can account for about 97% of the total NFT market.

According to the trading volume of OpenSea, the NFT market can be divided into the following stages:

No one cares: before February 2021 (monthly transaction volume has been below 10 million US dollars for a long time, or even less than one million for a long time)

Initial development: February-June 2021 (monthly transaction volume maintained at 100 million to 150 million US dollars, tenfold explosive growth)

Ready to go: July 2021 (compared with the previous five months, the monthly transaction volume has doubled to more than 320 million US dollars)

Unstoppable: August 2021 (the monthly transaction volume reached its peak with a tenfold increase compared to the previous month, exceeding US$3.4 billion)

The heat is cooling down: September-November 2021 (the monthly transaction volume shows a decreasing trend month by month, compared with the peak month, November has decreased by about 44%)

Stabilizing trend: December 2021-present (the transaction volume of this month has been similar to November, and there is a stabilizing trend)

From the perspective of the division stage, the NFT market also shows the characteristics of high volatility in the cryptocurrency market. The outbreak is extremely fast, and the rise is not stepped but jumping, so it is easier to drive Fomo sentiment. The peak trading volume in August is not NFT The month with the most sales is the month after the decline in trading volume, and the lagging growth in the number of active trading users also reflects this; but the basis of the outbreak is still based on long-termism, which is also in line with the fact that the cryptocurrency market is more rewarding in the early days The characteristics of users and loyal users, the number of active trading users in December is currently second only to the peak in October, which also creates conditions for the stabilization of the NFT market.

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Explosive products ignite the NFT market

The rapid development of the NFT market is inseparable from explosive products, and the sale of explosive products is often inseparable from OpenSea.

OpenSea divides different types of NFTs into art, collection, music, photography, etc. Traditionally, we often divide NFTs into collectible NFTs and practical NFTs. Collectible NFTs can be mainly divided into avatars and artistic paintings, while practical NFTs are represented by chain game NFTs. It is generally believed that the large-scale outbreak of collectible NFTs is slightly earlier than practical NFTs in time, mainly because collectible NFTs are mainly used on the ETH chain, and practical NFTs are mainly gradually transferred to Gas after the Axie fire. Low BSC and other on-chain transfers exploded on a large scale.

(1) CryptoPunks: One of the earliest ERC-721 works of art

As the NFT craze continues to rise, those ancient NFT works and those ERC-721 works that have been forgotten by the times have once again become the targets of cross-age significance and capital pursuit. The avatar NFT representative CryptoPunks is the most successful among them work. As Ben Roy wrote in The Fat CryptoPunks Thesis, the novelty of CryptoPunks is that they are the first works of digital art on Ethereum with a built-in method for verifying unique ownership. This is done through cryptographic hashing, so wallet addresses on Ethereum can take ownership of the CryptoPunk in a secure manner.

This year, an important leapfrog growth of CryptoPunks came from August-September. During this month, its sales doubled. The total sales exceeded 1.1 billion US dollars, and the monthly sales exceeded 660 million US dollars, almost 20% of OpenSea's August transaction volume. The floor price of CryptoPunks also increased crazily to over 100ETH this month.

What is even more surprising is that on August 23, the payment giant VISA announced that it had purchased CryptoPunks 7610 for about $150,000. DappRadar analysis pointed out that after the VISA purchase, the average selling price of CryptoPunks will increase by 4580% in 2021. In addition, non-crypto aboriginal investors who bought or collected CryptoPunks also include the famous Internet investor Feng Bo, the famous angel investor Cai Wensheng, Hong Kong star Shawn Yue, etc.

Investors inside and outside the circle spend a lot of money to buy or secretly collect, so that traditional media scramble to report on buyers or collectors. CryptoPunks has also become a marketing tool with high exposure. For example, the Chinese Meme community Losercoin cooperates with DefiVillage Spend 79ETH to buy CryptoPunk 7326, Web 3 project Mask Network to buy CryptoPunk 6128 with 159ETH, etc.

At the same time, a different experts from all walks of life, who hold CryptoPunk NFT, started a community-based discussion around the extension of CryptoPunks. NFT seems to represent a social culture, a circle culture, and it has become an admission ticket to meet more like-minded people. However, it is quite regrettable that this top-level discussion seems to have failed to carry out substantive actions and has gradually been buried.

(2) Bored Ape Yacht Club: Ethereum in NFT, the leader of the monkey family

There is a saying in the NFT market that CryptoPunks is Bitcoin in NFT, and BAYC is Ethereum in NFT. This kind of statement reflects two points. One is that both of them have shown extremely high return on investment and popularity in the circle with the development of the NFT market; the other is that it may reflect the practice of looking for valuation alternatives in investment. By the time we realized that the NFT market was about to get hot, the price of CryptoPunks was already high, and BAYC was just right in every way, so it became an alternative.

Similar to CryptoPunks, Bored Ape Yacht Club's leapfrog growth this year also came from August-September, and even reached a transaction volume of nearly 54 million US dollars on August 28, and the floor price at that time had exceeded 50ETH.

However, unlike CryptoPunks, whose floor price exceeded 20 or 30ETH in August before NFT broke out, BAYC's floor price in July was even less than 5ETH. This NFT, which was only released on April 23, could not be sold out when it was first released. It was not until early May, after Pranksy, an early NFT collector, announced that he had purchased more than 250 BAYC NFTs. big growth.

The success of BAYC does not stem from Pranksy's "calling orders", but by quickly attracting users who have purchased NFT, and developing into a large and interesting community. Just like the "club" in BAYC, the community is like a club. Users exchange their social avatars for BAYC NFT, and users will chat with each other and pay attention to each other. The BAYC team pays great attention to the activities between communities and the interaction between community members. It has launched a graffiti creation bathroom exclusive to BAYC NFT holders, and purchased land on The Sandbox to make it a unique entertainment place for holders. Host virtual meetups and more on Decentraland. It is the community culture that allows BAYC to develop and become the second only to CryptoPunks in NFT.

In addition to BAYC NFT, the BAYC team has also established or derived some additional monkey-related projects in order to allow more users to participate, such as Mutant Ape Yacht Club, Ape Kids Club, etc. In OpenSea, the top ten in 24h trading volume was dominated by multiple monkey projects.

The Bored Ape Yacht Club community's "playing" is not limited to this. Its official mobile game launched by BAYC and MAYC will be launched soon. BAYC NFT will not only exist as an avatar NFT in the future. In the future, we may see Members of different monkey families sit and drink coconut juice and blow the sea breeze on a certain beach in the Metaverse game. BAYC's continued high community popularity has overshadowed the narrative of CryptoPunks. In the past two days, the floor price of BAYC has even surpassed that of CryptoPunks.

(3) Art Blocks Curated: the most artistic art NFT

A work of art is the crystallization of the artist's intellectual labor, embodying the artist's thoughts and inspiration. In generative art, artwork NFT is not only the creator's trend of thought, but also a unique expression of art by computer technology. Art Blocks is such a platform for randomly generating works of art. Before each NFT of art painting is actually cast, even the creator only knows its outline, and the blank space is the unique "thinking power" of the computer.

The prices of NFTs of different categories of art works in Art Blocks Curated will vary greatly, some are worth hundreds of ETH, and some are more civilian, but compared with NFTs such as CryptoPunks and BAYC, Art Blocks Curated works have an artistic atmosphere The thicker it is, the more painstaking effort the artist will spend. Therefore, the Art Blocks team and the community are more inclined to allow each artist's work to have a longer-term development.

In addition to the more sales of Art Blocks Curated works during the August-September period, when the overall NFT is in the cold, there are still some new series of NFTs that can achieve better sales, and even cause a gas fee war due to the casting of works . At present, in the sales history of OpenSea, the sales volume of Art Blocks Curated NFT is close to 220,000 ETH, ranking fourth. The multiple listings of Sotheby's and Christie's traditional auction houses are the best reflection of the value of Art Blocks Curated.

(4) LOOT: What is lacking is not imagination, but a public tool to turn imagination into reality

LOOT, a black and white "JPG". Each "JPG" has only 8 lines, which is as concise as the official introduction. LOOTs are randomly generated adventurer gear and stored on the blockchain. Statistics, images, and other features are intentionally omitted for interpretation by others. The 8 lines represent 8 different types of equipment. All visual effects, statistics and evaluation indicators are omitted, the purpose is to allow LOOT holders to interpret and describe their understanding of the NFT they own in their own way.

LOOT was born at the end of August, when the NFT market was the hottest. Within a week of its launch, its floor price was pushed up hundreds of times, once close to 20 ETH. During this week, various derivative NFTs serving LOOT emerged in an endless stream. For a while, it was a bit unclear whether it was hype or everyone was contributing to this paradigm revolution. However, it took less than a week for the craze to recede. Last week, the hype was still hot, and this week there was no market. Most of the various LOOT derivatives NFT have really turned into JPG, and many daily sales have dropped to single digits, or even 0. So far, the development of LOOT and its derivative NFT has mostly underperformed.

The upper limit of LOOT can be infinite, but the lower limit is also very high. For developers or users who understand programming and art, the birth of LOOT is a boon. According to the existing characters, you can draw the portrait in your mind step by step according to your imagination, and it can even be used as a decryption. All kinds of stories; but for the public, there is no imagination but no execution ability to pay, and there is still a lack of effective and convenient tools in the market to support more user participation.

However, to a certain extent, LOOT guides the trend that collectible NFTs should develop more in the direction of practical NFTs and gamification. The thoughts about characters and equipment contained in it are popular among game users. With the development of Web 3.0 tools and the continuous advancement of the chain game pattern, there is reason to believe that LOOT will return to the public eye.

(5) Decentraland & The Snadbox: "Hot Fever" Scrambles into the Metaverse

If you choose the most eye-catching target from NFT, Metaverse Real Estate will definitely be on the list. In the latter half of the second half of this year, the wave of the metaverse hit, and the land parcel NFT, one of the most important means of production in the metaverse, became the object of looting. Snapping up the land of the hottest metaverse game is like buying a house in a good location in reality.

Decentraland and The Sandbox are currently the two most popular metaverse games in the cryptocurrency market. The NFT sales of the two are mainly concentrated in November. Currently, the floor price of the former reaches 3.617ETH, and the floor price of the latter reaches 2.86ETH.

Among them, the users who purchased the NFT of Metaverse plots have some investments from outside the circle. For example, PricewaterhouseCoopers, one of the four major audit companies, purchased land in The Sandbox and settled in Metaverse to serve customers; the well-known singer JJ Lin announced on Twitter that he bought The three pieces of land in Decentraland cost about 780,000 RMB.

Owning a piece of metaverse land is equivalent to owning the dominance of this land, and you can create any world you want according to your own ideas. With the development of technologies such as VR/AR, the narrative of the metaverse will continue for a long time, and the relatively scarce plots in popular metaverse games will become more precious.

(6) Axie Infinity: Chain game leader, NFT pinnacle

As an NFT-based blockchain game, Axie Infinity is excellent in the play-to-earn mode, and can even make games replace work. Since its inception, Axie Infinity has reached $3.758 billion in NFT sales, which is equivalent to selling assets of 1.21 million ETH, which is almost equal to the sum of the total sales of CryptoPunks, Art Blocks and Bored Ape Yacht Club.

Axie Infinity’s NFT sales peak has two peaks. One is in mid-July, when chain games have begun to show signs of prosperity. Its own excellent play-to-earn system around combat and reproduction and the thriving NFT market make it quickly known The second is that it appeared in early November, and the popularity of collectible NFTs cooled down, while the popularity of chain games continued to rise. Practical NFTs represented by chain game NFTs have been favored by market capital and have become As the first ticket to enter the game, Axie Infinity, as the leader of chain games, also got market feedback from it. However, with the collapse of various chain games and the difficulties of the Axie economic system itself, the number of new entrants has decreased, and its NFT sales have declined significantly.

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The pattern and opportunities of NFT in the public chain

From the perspective of the public chain structure, there are obvious differences in NFT sales among the major public chains. Ethereum is the only one, Ronin belongs to T2, Flow and Solana belong to the third echelon, and WAX and Polygon are behind; but from the number of trading users From the perspective of transaction counts, Ronin and WAX, which rely on games for a living, are obviously more active, Ethereum and Flow are not far behind, and Solana is lagging behind.

Ethereum's NFT sales far exceed other public chains, which is mainly related to the fact that OpenSea and popular NFTs are mainly active on the ETH chain, and their orthodox status is unparalleled. But on the other hand, the casting of potentially explosive NFTs can easily push up the gas transaction fees on the chain, which raises the participation threshold for the extensive participation of users. In addition, the relatively high Gas fee on the ETH chain is not suitable for the development and user attraction of chain games that require frequent interactive operations. The raised threshold also eliminates some highly speculative players. With the development of the Ethereum-L2 network, the balance between legitimacy and Gas costs can be taken into account. At that time, the hard power of the game itself will be tested more. Therefore, chain games based on the Ethereum-L2 network can pay more attention.

The rise of Ronin relies on the long-term high popularity of the Axie Infinity game, which is also reflected in the high number of active users and transaction counts. However, with the continuous development of chain games, Axie Infinity will face more and more challengers. In addition, Axie Infinity is facing the predicament that early players are making a lot of money, tokens continue to be under pressure, and new players are decreasing. NFT sales have declined significantly since the second peak in November, and how to break the situation is very critical. In addition, although Ronin is more of a chain launched because of Axie Infinity, in the long run, the single layout on the Ronin chain should be changed, and the Axie team may also seek the parent game Axie by launching new games or sub-games. Infinity's solution to a difficult situation.

As the third echelon, the two public chains Flow and Solana are the public chains that investors should focus on. One of the characteristics of these two public chains that differs from other public chains is that the buyers and sellers of NFT are relatively balanced, which allows NFT buyers and sellers to have more game space, and NFT liquidity will be relatively better.

In terms of subdivision, Flow is a public chain that focuses on chain games and digital artworks. It does not pursue quantity and focuses on high-quality goods, and enjoys the reputation of the first NFT public chain. Flow's leading chain game is NBA Top Shot. In the eyes of sports fans, this chain game can bring economic benefits no less than Axie Infinity. At present, there are also some game guilds that use NBA Top Shot as their main gold earning game, such as BlackPool. In addition, there are also Pokémon games such as Chainmonsters that have received much attention on the chain. What is even more commendable is that the Flow team has a very high level of literacy, and they are more focused on polishing the product itself rather than making profits as soon as possible. Therefore, projects that choose to launch on the Flow chain can often maintain their original intentions, and most of them will not choose Issuing tokens too early, instead focusing on turning the project into a phenomenal product. The project party prefers to grow together with users, so for users, if they do not dig deep into the projects on the chain, they may miss some high-quality early projects.

Solana is backed by SBF. Regardless of technology or capital, there are more than 500 ecological projects related to NFT on the chain, and the most popular one is the chain game Star Atlas. Since the release of the brochure, Star Atlas 3A-level productions have been widely acclaimed, and the launch of the game may increase the quality of chain games as a whole. In addition, Solanart, the first OpenSea-like NFT sales platform on Solana, has a transaction volume of more than 578 million US dollars since its birth, which is not far from the transaction volume generated by the head chain game on Flow. Solanart's first explosive NFT is Degenerate Ape Academy, which has brought sales of more than 110 million US dollars to the platform, and the current floor price is about 34 SOL. However, it is worth noting that there are many and complicated projects in the Solana ecosystem. When the token is released, the overall valuation is often lowered by extremely low circulation to increase the market value. There may be ongoing stress.

As the public chain with the largest number of active users, relying on low gas fees, relatively low deployment costs and good operating experience, BSC has created a variety of explosive chain games. peak. However, success is Xiao He, and failure is Xiao He. A variety of explosive chain games collapsed overnight and became street rats that everyone shouted and beat, and even directly led to the collapse of the chain game NFT market. The root cause is that the quality of these so-called explosive games is extremely lacking and the mechanism driven by incremental users and funds cannot be sustained for a long time. The thunder has been buried at the beginning of the game, but most users are instigated by the crazy price rise. BSC, which combines all kinds of excellent conditions, obviously has the most suitable soil for the development of chain games. However, the soil of free development is difficult to prevent bad money from driving out good money in the market. At this time, when players identify excellent chain game projects, in addition to technical measurement, More attention should be paid to whether the project party can maintain its original intention.

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A dominant OpenSea, the status quo of other NFT platforms

As mentioned earlier, according to the analysis of ConsenSys, the trading volume of OpenSea can account for about 97% of the total NFT market. The range of platforms for users and project parties to choose has become scarce, and they often have to use them. And for OpenSea itself, maybe it's not all good. Bloomberg has reported that OpenSea is seeking to raise about $1 billion at a valuation above $12 billion and conduct an IPO. This has caused dissatisfaction among users to a certain extent. Although in the follow-up response, OpenSea CFO made some denials to Bloomberg's news. But OpenSea should realize that in the field of cryptocurrency, the community should always come first. As an absolute leader in the market, you should not deviate from the community, and if you deviate from the community, you will eventually be abandoned by the community. Then the NFT platform that is truly rooted in the community and managed and operated in a community-based manner is expected to gain more favor from users in the future.

The public chains used by OpenSea are mainly Ethereum and Polygon. Among them, the transaction volume on the Polygon chain is still relatively small, so the platform can also be divided into NFT platforms supported by ETH chains, other chains outside ETH, and multi-chains.

Except for OpenSea, the NFT trading platforms on the ETH chain mainly include LarvaLabs, SuperRare, Foundation and Rarible. Among them, LarvaLabs mainly trades CryptoPunks, which has a certain degree of exclusivity. Although the overall trading volume far exceeds the sum of the other three, the actual users The number of users is relatively small, mainly high-end users; the total transaction volume of Rarible ranks first among the remaining three, and the total transaction volume is only 2.6 million US dollars. There is no absolute gap, but its number of users far exceeds that of other platforms, and the average sales volume The main strategy is to seize the low-priced NFT market to serve retail users and high-frequency users. The current market value of the token is about 70 million; SuperRare is also one of the few platforms that have issued a token. It seems to be more in line with the positioning of the community. The current market value is around 100 million US dollars. The strategy is similar to that of LarvaLabs, mainly focusing on mid-to-high-end users; the positioning of Foundation is relatively more neutral, and the ratio of average price and number of users is also more balanced.

Except for the ETH chain, the NFT platform positioned on its own public chain is mainly concentrated on Solana. According to the official review, in the whole year of 2021, Solana has minted more than 1 million NFTs, and this has directly benefited the Arweave protocol that stores NFTs. The surge in demand for NFTs has led to a surge in storage protocol revenue. In addition to the Solanart NFT platform mentioned above, there are also Magic Eden, DigitalEyes Market and Solsea, etc. Among them, Solanart's transaction volume and number of transaction users are extremely good, and it undertakes the mission of most of the Solana NFT market; DigitalEyes Market focuses on pixel style, It meets the NFT asset needs of many long-tail users. In addition, there are two popular NFT products on Solana, namely Degenerate Ape Academy and Solana Monkey Business on Solanart, which are currently the only NFTs on Solana that have sold more than 100 million US dollars.

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In addition to the big players in the traditional circle entering the market to buy NFTs in the circle, many manufacturers in the traditional field have also announced their entry into the NFT market, but most of them are only "brutally" selling their own NFTs to users in the circle, in order to Obtaining market bonuses at the marketing level, the popularity often lasts for less than a week. For example, the Pepsi Mic Drop NFT series released by Pepsi-Cola, the floor price has fallen from the high point and has died, and the daily trading volume is only single digits. When traditional manufacturers enter NFT, they often think highly of themselves and do not start from the perspective of the community. The high popularity of their NFT works is often firstly due to its reputation in the traditional field. When the heat dissipates, traditional manufacturers may have already looked elsewhere.

The domestic NFT market is also actively developing. Limited by the current policy situation, the concept of Token in NFT has been deprived, and it has gradually evolved into the concept of digital collections. The most noteworthy thing is that Ali's digital collection platform Jingtan (formerly Ant Chain Vermicelli), based on the Ant Alliance Chain, cooperates with many well-known IPs to launch digital collections. However, the platform does not support transactions for the time being, and the transfer can only be initiated after the user has held it for 180 days. However, the obstacles in terms of conditions did not affect the speculation of speculators. On the second-hand trading platform Xianyu, Ali Auction and other secondary trading or auction platforms, there have been hypes for conducting futures trading of AntChain digital collections.

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According to the "Notice on Further Preventing and Dealing with the Risk of Hype in Virtual Currency Transactions" issued by the central bank and other departments, the content of this article is only for information sharing, and does not promote or endorse any operation and investment behavior. Readers are requested to strictly abide by the laws and regulations of the region and do not participate in Any illegal financial conduct. Wu said that without permission, it is forbidden to reprint or copy the content, and those who violate it will be investigated for legal responsibility.

According to the "Notice on Further Preventing and Dealing with the Risk of Hype in Virtual Currency Transactions" issued by the central bank and other departments, the content of this article is only for information sharing, and does not promote or endorse any operation and investment behavior. Readers are requested to strictly abide by the laws and regulations of the region and do not participate in Any illegal financial conduct. Wu said that without permission, it is forbidden to reprint or copy the content, and those who violate it will be investigated for legal responsibility.