95% of NFTs:
A recent study by self-proclaimed crypto gambling site dappGamble reveals the current state of the non-fungible token (NFT) market. The results are shocking, as research shows that 95% of these digital assets are now considered “worthless”.
As cryptocurrencies have boomed, so has the NFT craze, which some see as the greatest high-risk, high-yield investment of the bubble. As of August 2021 alone, the monthly trading volume of these unique tokens reached almost $2.8 billion. However, while major cryptocurrencies have managed to maintain their value, NFT valuations have seen a significant drop. The latest data shows that weekly NFT trading volume is only $80 million.
DappGamble analyzed data from NFT Scan’s collection of 73,257 NFTs and came to a key conclusion: most NFTs have no market value. In fact, 69,795 collections were declared “worthless”, defined as having a market value of zero ETH (currently 1 ETH = $1600). Other key findings of the study are that 79% of all NFT collectibles are unsold tokens, indicating an imbalance between NFT creation and demand. Additionally, the lack of a clear use case, compelling narrative, or true artistic value makes both new and established collections attractive to investors. In addition, studies have also investigated the environmental impact of the establishment of NFTs. Because the minting process relies on blockchain technology, a large amount of electricity is used. The study estimates that without a clear owner or market share, a collection of 195,699 NFTs would require 27,789,258 kWh to produce approximately 16,243 tons of CO2 emissions.
Despite the dismal results, dappGamble still believes that NFTs are still the future. Research suggests that NFTs will either be historically significant and considered true art, or provide real utility to regain their value. The system aims to move away from the frenetic nature of the undifferentiated NFT market by mid-2021.