The hype around NFTs—non-fungible tokens, or digital items with certificates of ownership minted on the blockchain—has cooled considerably since its frothy market peak back in 2021, and now the sector is looking quite grim. According to a new report from finance and blockchain technology experts at dappGambl, most NFTs are now worthless.
The study identified 73,257 NFT collections, finding that 69,795 of them (nearly 95 percent) have a market cap of 0 Ether. That means the vast majority of NFTs do not have any monetary value.
A large part of this is due to oversupply. While high-profile collections (most notably the celebrity-endorsed Bored Ape Yacht Club) were in high demand, the study found that 79 percent of NFT collections have not reached 100 percent ownership. That means almost four out of every five collections haven't completely sold out. This undercuts the price for owners and investors.
In fact, less than 1 percent of top NFTs are now priced at $6,000 or higher. You might recall celebrities like Steph Curry, Jimmy Fallon, Tom Brady, and Meek Mill shelling out over $200,000 for NFTs not too long ago, with some deals even reaching into the millions.
But even with low prices, buyers aren't swooping in. Trading volume has also cratered. At its peak in August 2021, monthly trading volume for NFTs reached $2.8 billion. In July 2023 it was $80 million, a 97 percent decrease.
Meanwhile, minting NFTs continues to be an energy-intensive process due to the computing power required. The study identified thousands of NFT collections with no owners that nonetheless created huge carbon emissions.
The study posits that NFTs still have a future, but they'll have to present more real-world use cases. Some ideas include gaming, real estate, event and membership access, and digital identity. But for now, the prognosis is bleak.
from Men's Journal https://ift.tt/4Gkn6AL
No comments:
Post a Comment