If someone told me at the beginning of this year that NFT sales would easily exceed $1 billion, that well-known investor GaryVee would launch an NFT project, and that Axie Infinity would become one of the top five NFT games, I would answer: "I only believe in one of them. "
However, in this past quarter (Q2 2021), the top five NFT collectibles were worth over $750 million, the Axie marketplace generated $7.7 million in fees, and GaryVee has earned over $7.7 million from his NFT projects $1 million in royalties.
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01 NFT is a bubble?
The media's description that the NFT market is dead and the NFT bubble has burst is wrong. The media has mostly focused on crypto art and collectibles (like the NBA Top Shot), but the broader NFT ecosystem continues to grow.
In terms of NFT volume, OpenSea had its best ever record in June. Relative to OpenSea, Rarible's poor performance is largely due to not providing some popular NFT categories, such as NFT avatars, sports collectibles and virtual worlds.
OpenSea's NFT growth rate is a warning sign for us.
In June, OpenSea facilitated 210,000 NFT transactions from nearly 40,000 active traders. Overall, June was the month with the best trading volume for OpenSea and the second-highest month for active traders.
Although OpenSea is still the leader in the overall market,But Axie Infinity rose rapidly this quarter to become the fourth largest NFT market in the world.
Notably, Atomic Market — the go-to marketplace for NFTs on WAX — is currently the #8 NFT marketplace.
Axie Infinity's explosion follows phase 2 migration of its Ethereum sidechain Ronin, the side chain provides lower gas fees and better user experience.
While Axie can be traded on other platforms, 97% of Axie trading volume occurs on the Axie Market, which in turn passes fees (in AXS and ETH) to the Axie Foundation.
The Axie Foundation is now worth more than $21 million, 85% of which ($18 million) was accumulated through incubation and marketing fees in the last quarter.
Axie continues to grow, gradually differentiating itself from other crypto games. andAxie set for next major milestonefirst level title
02 Virtual avatar: not the last NFT
The most important trends in the past quarter wereContinuation of Avatar NFT。
NFT avatars—collectibles designed specifically for individuals to represent themselves on the internet (such as CryptoPunks)—continue to grow in popularity, with this nascent segment generating nearly $350 million in transaction volume in the second quarter of this year and throughout the first half of the year Created a transaction volume of nearly $600 million.
A magic number: 10,000.
In the summer of DeFi last year, many forked projects whose names were related to food were successful.NFT blue-chip projects like CryptoPunks have also experienced similar forks。
Most of these new projects bear the characteristics of CryptoPunks, including a limit of about 10,000 pieces, each NFT has varying degrees of scarcity, and a community focused on promoting the value of these avatars.
These include:
Meebits: 20,000 unique 3D characters designed by Larva Labs (creators of CryptoPunks) for avatars in virtual worlds. Existing CryptoPunks and Autoglyphs users can get a free Meebit.
Bored Ape Yacht Club: This is an NFT virtual avatar project with the appearance of an ape, with a total of 10,000.
Bored Ape Kennel Club: The image of NFT is a dog, and the total number is also 10,000, all of which will be airdropped to ape NFT holders.
Wicked Craniums: There are 10762 in total, the image is a skull portrait, each portrait is completely different and randomly generated.
My Fking Pickle: 10,000 in total, and the image is a variety of cucumbers.
Slumdog Billionaires: All kinds of dogs.
Larva Labs created Meebits for a reason. Since Meebits can be claimed by CryptoPunks and Autoglyphs holders,This amounts to providing added value to the Larva community. This leads people to believe that Meebits are related to the CryptoPunk's value narrative, rather than that the CryptoPunks' collectible value has been replaced by a new, unrelated NFT.
Additionally, Bored Apes generated more than $60 million in sales in the second quarter of this year, and currently ranks third on the NFT avatar charts (behind Punks and Meebits).
However, most avatar projects may end up with the same fate as Hashmasks。
Hashmasks, a once high-profile NFT project, has been stalled since its launch in February this year, with only $2 million in volume in the past quarter.
A more important dilemma facing the NFT avatar project is,These communities are small, with only a few holding。
Meebits has the largest user base, and its total volume is twice that of similar projects (20,000 instead of 10,000), but it still faces centralization problems, Gary Vaynerchuk revealed, He has 52 Punks and 54 Meebits.
NFT centralization helps drive scarcity in the market, but also reduces community growth. Similar to the luxury industry, the number of buyers here is limited. Also, as other avatar programs roll out, there may be less need for these legacy programs.
Virtual avatar company Genies recently raised $65 million in Series B funding. It has worked with Justin Bieber, Cardi B, Shawn Mendes, Rihanna and other stars, and is likely to establish partnerships with these stars. As celebrities sell their NFT products to loyal fans, these types of NFTs will steal most of the market's attention.
Avatar NFT is an emerging field that will eventually face a power-law distribution where a few will be valuable and most will be worthless.
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03 Web3 adoption reaches tipping point
The development of Web3 has been long-awaited but underrepresented due to the need for infrastructure for computing, indexing, data management, hosting, storage, and other important services. However, after years of building and continuing to grow, many Web3 protocols are already hitting their stride.
Livepeer is an Ethereum-based video infrastructure provider that processes millions of videos every week and generates thousands of protocol fee revenues.
The Graph protocol has officially migrated to its mainnet, allowing anyone to create and publish open APIs called subgraphs, which are now generating thousands of dollars in weekly fees.
The data marketplace established by Ocean Protocol can unlock sharing and selling data, and currently has a total locked value of more than $3.3 million in 419 data pools.
File and data storage networks have also been further developed:
Data stored on Arweave increased by 1.8TB (1800 gigabytes)
Sia's storage capacity reached an all-time high of 1.09 PB (1 PB = 1000 tb), with a capacity of 3.25 PB.
The total data stored on Filecoin now exceeds 23 petabytes
Additionally, the usage of Web3 protocols like Handshake is increasing, with nearly 1.5 million registered Namebase domains and over 100,000 Handshake domains currently in use. Helium's network is adding thousands of nodes every week, resulting in 147 billion data credits (equivalent to approximately 3,500 GB) and total net revenue of over $1.4 million (mainly for adding new hotspots).
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04 Celebrities, influencers and brand NFTs
Even if you fear and escape, fate will still come.
As celebrities such as Gary Vee become more invested in cryptocurrencies, the risk of other celebrities and influencers getting into cryptocurrencies is also decreasing.
Gary Vaynerchuk — more commonly known as GaryVee — is now entering the crypto industry with his new NFT project, VeeFriends. Since launching in early May, the experimental product of this "NFT+ brand" has been quite successful, generating $11 million in revenue in Q2.
Also, famous artists like Jay-Z are using CryptoPunk as his Twitter avatar. What's more, the rapper held an auction at Sotheby's for "Heir to the Throne," an NFT based on his debut album, which ended up selling for $139,000.
Musicians who have been struggling to make money from their works (except for concerts) have become the pioneers of NFT experiments.
Yellow Heart - an NFT ticketing marketplace - has developed and released NFT collections with Maroon 5 and The Kings of Leon, which come with perks such as front row seats, access to a listening party, portraits and more.
If personal brands can use NFT to achieve profitability, then large well-known brands will not be far behind. Twitter recently released a “Twitter 140 collection” of NFTs on Rarible, which contains NFTs of Twitter history and pop culture.
05 Epilogue
Sometimes nothing happens in one quarter, and sometimes a qualitative leap occurs in just one quarter. For Web3, the quarter was in the middle. The Web3 industry has gone through a period of stagnant growth and has reached some milestones, showing a steady upward trend overall.
From the perspective of mass consumers, the NFT market in the second quarter was relatively quiet, but from the perspective of data analysis, this is not the case. Crypto art trades are down, and NFT speculators are turning to new territories. The NFT landscape continues to expand and reach all kinds of new areas that have yet to be explored, even if it means we have to let celebrities open the doors of OpenSea.
What happens next quarter is anyone's guess, but if these trends continue, the second half of the year will be a memorable one for those concerned about Web3 and NFTs.
