Melania Trump,Two years after the tech wave swept away artists and celebrities, researchers estimate that 23 million people are worthless investments.
Once considered the latest tech craze and attracting celebrities, artists and even Melania Trump, tens of thousands of NFTs have now been declared almost worthless. dappGamble reviewed data from NFT Scan and CoinMarketCap and found that 69,795 out of 73,257 NFT collectibles have a market cap of 0 Ethereum, rendering the investments of 95% of NFT collectibles (or 23 million people) worthless.
NFTs, or non-fungible tokens, are a type of crypto-asset used to prove the ownership and authenticity of a digital archive, including images, videos or text. The report comes almost two years after the NFT craze took over celebrities and artists, with many rushing to buy Bored Ape Yacht Club and Matrix incarnations of NFT collections.
In March 2021, cryptocurrency entrepreneur Sina Estavi made headlines by paying $2.9 million to buy the NFT of former Twitter CEO Jack Dorsey’s first tweet. Meanwhile, in December 2021, the former first lady launched an NFT collection called Melania’s Vision, which included limited-edition digital art of her eyes.
The sharp market decline around such crypto-assets “highlights the need for careful due diligence before making a purchase, especially for high-value purchases,” the report said. “This frightening reality should serve as a sobering check on the euphoria that often occurs in the NFT space. Between stories of digital artworks selling for millions of dollars and stories of overnight success, it’s easy to overlook that the market is full of pitfalls and potential pitfalls. ” it added. The report shows that 79% of all NFT collections remain unsold because demand is insufficient to keep up with supply in what the researchers describe as a “highly speculative and volatile market”.
To analyze the current state of the best NFT funds, dappGamble researchers surveyed the top 8,850 NFT funds according to CoinMarketCap. They found that 18% of these top collections had zero reserve prices, making them essentially worthless. The report notes that 41% of the top collections are priced between $5 and $100, which may indicate a lack of value for these properties. Additionally, less than 1% of collections are worth more than $6,000, a stark contrast to the multi-million dollar deals that dominated the $22 billion market in 2021.
The study also analyzes the costly environmental impact of the NFT redemption process. The researchers identified 195,699 collections of NFTs with no apparent owner or market share and found that the energy required to mint the NFTs was equivalent to 27,789,258 kilowatt-hours, resulting in the emission of approximately 16,243 tons of carbon dioxide. To put this staggering number in context, the report shows that 16,243 tonnes of carbon dioxide is equivalent to the annual emissions of 2,048 households. It is also equivalent to the annual emissions of 3,531 cars or the carbon footprint of 4,061 passengers flying from London to Wellington, New Zealand. Furthermore, the report revealed that the number of dead NFTs could be even higher.
“MacContract’s Ethereum base price is $13,234,204.2, but its historical sales volume is only $18,” the report said, adding, “The glaring discrepancy between the quoted base price and actual sales data reveals weaknesses in the NFT market. A big problem – Inflated ratings do not reflect actual buyer interest or transactions in the real world. “It is clear that much of the NFT market is characterized by speculative and hopeful pricing strategies that are far removed from the actual trading history of these assets,” it said
Despite the volatility of the NFT market, dappGamble researchers said they believe NFT will still have a place in the future. To survive market downturns and have lasting value, NFTs must be historically significant (such as the first edition of Pokémon cards), be true works of art, or provide real utility, the report said.