Trade Volume for NFTs in January Reached $941 Million - A Record

DappRadar, which tracks and analyzes decentralized apps, reports that non-fungible tokens are making a comeback

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DappRadar, a company that tracks and analyzes the activities of non-fungible token markets, reported $941 million in volume for non-fungible tokens in January 2023, an increase of 38% from December.

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In 2021, a $69 million digital art piece by Beeple spurred interest in non-fungible tokens, which provide proof of ownership of digital assets. As well as CryptoPunks, the Bored Ape Yacht Club and the Bored Ape Yacht Club saw high popularity in 2014.

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According to Sara Gherghelas, blockchain analyst at DappRader, the surge in NFT markets in January was primarily driven by Yuga Labs' collections, which accounted for 34.3% of the NFT trading volume in January with a trading volume of $324.8 million.

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Cartoon apes are the subject of the 10,000-piece Bored Ape Yacht Club collection from Yuga Labs. The $4 billion valuation of Yuga Labs was reached in March 2022 with a $450 million capital raise. In addition to Justin Bieber, Jimmy Fallon, Serena Williams, and many others, the award has been held by a number of prominent individuals.

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It was announced in January that Yuga Labs had launched an exclusive online game called Sewer Pass. A lot of excitement was generated in the NFT world with the release of the Sewer Pass collection, according to Gherghelas.

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The anticipation of Blur, an NFT marketplace, launching a popular token in February also contributed to the high NFT trading volume in January. As a result of the token, Gherghelas said that users were motivated to be more involved in NFT trading, resulting in better returns.

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Although Blur is a newcomer to the marketplace, it has become one of the fastest-growing NFT marketplaces, with $187 million in trading volume, representing 20% of the market.

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OpenSea remains the leading NFT marketplace, according to the same report by DappRader, with a 66.58% rise in trading volume last month. In total, 58% of NFT's trading volume was represented by this volume. Also, Ethereum ETHE, +6.56% is the dominant blockchain in the NFT blockchain space, with 78.5% market share.

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Over the course of 2022, NFT trading volume has decreased by 97%. By December 2022, OpenSea had only $250 million in trades, down from $4.8 billion in January 2022.

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As a result of this slump, NFT projects were also sparked by a series of controversy. In October, Yuga Labs was investigated by the Securities and Exchange Commission for unregistered offerings. A class action lawsuit against Yuga Labs for compensating celebrities to promote their products, without disclosing it, was filed in December by Justin Bieber, Steph Curry, Paris Hilton, and Jimmy Fallon, among others.

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During the bear market, trading and creation of digital art diverged, according to a Jan. 31 report by Ark Invest, an asset management firm based in St. Petersburg, Florida.

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In 2022, NFT trading volume increased 15% year-over-year, primarily due to collectible projects such as Bored Ape Yacht Club and Crypto Punks. According to the report, however, the percentage of NFTs issued has shifted toward utility-based projects. The shift toward utility is a positive development since it focuses on underlying value rather than speculation.

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The focus has shifted from just showing still images of the artwork to creating communities through perks like digital memberships and exclusive events.