It’s no surprise to anyone that non-fungible tokens (NFTs) are the area of cryptocurrencies that has grown the most in 2021. A new report from The Block puts a figure on that growth, however: volume has increased by +42,988% since last year.
The volume of NFT transactions has exploded
According to a publication by The Block, $13 billion was exchanged in NFT sales during 2021. Last year, sales amounted to only $33 million. We can also see that the increase in volume was very clear from the summer of 2021:
Monthly volume on NFT marketplaces (Source: The Block)
We can also see that OpenSea’s hegemony is for the moment very little contested. NFT’s buying and selling platform accounts for 88% of the trading volume for all of 2021, or $12.5 billion.
However, it is possible that OpenSea’s dominance will diminish over the coming year. Several large centralized exchange platforms, including the much anticipated Coinbase or more recently Kraken, have indeed announced the launch of marketplaces for NFTs.
An “NFT mania” reminiscent of the ICOs of 2017
Not surprisingly, profile picture (pfp) NFTs dominate in terms of volume. With Cryptopunks, Art Blocks and Bored Ape Yacht Club (BAYC) NFTs in particular being the most popular this year:
Trading volume of art and collection NFTs (Source: The Block)
The Block’s report further states that the rush to NFTs is similar to the one that took place during the ICO explosion in 2017. It reminds us that “not all pfp can be Cryptopunks, just as not all Proof of Work cryptocurrencies can be Bitcoin”.
According to The Block, using NFTs with Ethereum is still very expensive, due to high transaction fees. This is why the arrival of scalability solutions, including second-layer solutions, would be crucial to foster the mass adoption of these tokens.
All this indicates that despite the enthusiasm surrounding the sector, it is still technically in its infancy. The arrival of new marketplaces and competitors to Ethereum will also help transform the NFT ecosystem in 2022.
