From left to right: Collectibles/Games, Artwork, Metaverse, Services
NFT market overview
NFT market transaction volume since January 2019. Source: Dune Analytics, Josepimpop
According to data from Dune Analytics, in November, the NFT market volume remained high, totaling $9.3 million. Including the NFT market trading volume from December to the present, the cumulative trading volume of the NFT market in 2020 will be nearly 46 million US dollars.
NFT with the highest transaction volume in the past 30 days
The collectible game project Axie Infinity is one of the projects with the highest transaction volume in the past 30 days, reaching 1.8 million US dollars. (Note: nonfungible.com only tracks Ethereum-based NFTs. The above chart does not include NBA Top Shot data. NBA Top Shot data is based on the Flow blockchain or any NFT on the WAX blockchain, such as Bitcoin Origins.)
NFT art market SuperRare and fantasy football card game Sorare are second only to Axie Infinity in transaction volume, both exceeding US$1.2 million.
Decentraland and CryptoPunks are the two longest running NFT projects on Ethereum. In the past month, both projects were very popular, with transactions exceeding RMB 300,000.
In the past month, the NFT service system ENS (Ethereum Name Service) had the highest transaction volume among similar systems, exceeding US$140,000.
This month’s report will further introduce several top-ranked NFT projects in different categories in the past month.
1. Axie Infinity (collectibles/games)
2. Sorare (collectibles/games)
3. SuperRare (artwork)
4. Decentraland (metaworld)
Axie Infinity
Axie Infinity is a digital pet game inspired by Pokémon. Players can collect, train, breed and fight Axie in the game. Each Axie has unique genetic data stored on Ethereum. The game (blockchain game/NFT collection) was developed by Vietnamese game studio Sky Mavis. The studio was established in 2018 and focuses on technology development games.
Axie Infinity has a variety of animated characters and multiple game settings, and is the first such game built on the blockchain. In the Axie Infinity universe, community builders can independently build tools and get experiences, and all art assets and Axie genetic data are available to third parties.
Axie can have 6 body parts among more than 100 choices, each body part has its own combat method, and the permutations and combinations have unlimited possibilities. In each part, Axie has three genes: dominant gene, recessive gene and minor recessive gene. The dominant gene determines which body part Axie presents. Axie can be used in battles and competitions, where players can get opportunities and win rewards.
The reproduction mechanism of the game introduces the characteristic of scarcity, because Axie breeds only 7 times. The breeding cost of Axie is 0.005 ETH plus a certain amount of SLP (Small Love Potions). The number of SLPs will increase as the number of Axie breeding increases. In the breeding process, every three genes may be passed on to the next generation. The possibility of dominant genes is higher, recessive genes are lower, and minor recessive genes are lower.
Another major component of the game is Lunacia (Axie Metaverse). Lunacia can be divided into tokenized land plots (a type of NFT, similar to Axie and items, such as SLP). Players can find AXS tokens in these plots and find rescue nodes. Landowners have priority over all breeding resources on their land, which can be used to upgrade Axie and land.
The number of Axie Infinity users (left axis) and transactions (right axis). Source: DappRadar
Axie Infinity has its own internal market, the Axie market. Players can buy, sell and auction items in the market, and can also accept quotes from others.
Axie can be sold in multiple NFT markets, but most transactions are conducted in the Axie dedicated market. In the past few months, this market has grown rapidly.
Since the beginning of September, the number of users and transactions has increased nearly 10 times.
In November, the number of daily users reached a peak of 6,727, and then began to decline. In November, the daily trading volume reached a peak of 15,747.
Axie NFT average price (in USD). Image source: nonfungible.com
The value of Axie is determined by its scarcity in the game and the level of utility (because the player can win the game by winning).
Scarcity: The number of NFTs is scarce and varied. Different types of Axie are scarce. For example, insects and birds are more scarce than other species. The Axie with mysterious body parts is not only scarce, but also because it can be transformed into a legendary Axie, so the price will be higher. The project recently added Chainlink’s Verifiable Randomness Function (VRF) to ensure that the newly generated Axie has provability, fairness and randomness.
Utility: There are different types of Axie, which is also the strategy of the game. By acquiring different types of Axie combinations with complementary strengths and different weaknesses, players are expected to win in battles and competitions to earn profits.
With the continuous development of the game, the effectiveness of Axie has continued to increase. The average price of Axie has exploded from less than $10 at the beginning of the year to a peak of $715 in October, and then dropped to about $64. The Axie with the highest transaction volume last month was named Greg-successfully sold for 150 ETH, about 95574 USD.
Greg has three mysterious body parts and is one of the most scarce Axie. The initial purchase price on September 12, 2018 was only 10 ETH, which was approximately US$3,000 at that time.
After two years of planning, Axie Infinity launched its own ERC-20 governance token-Axie Infinity Shards (AXS) in early November.
AXS is similar to UNI, the governance token of the Uniswap protocol, and has introduced a retrospective reward distribution system. Any user who participates in Axie Infinity before the snapshot event on October 26 can enjoy AXS tokens.
The token will gradually realize the decentralization of the ownership and management of Axie Infinity. Players can earn rewards by staking tokens, participating in games, and voting for major management decisions. They can also earn AXS by participating in Axie Infinity games or user-generated games.
In the third quarter of 2021, the complete ecosystem of AWS will be launched, including mortgage, governance, game reward earning and the first version of community land game settings.
At the beginning of 2021, Community Treasury will be launched and will begin to receive the income generated by Axie Infinity and some mortgage rewards. Once the network is decentralized, this Treasury will be governed by AXS mortgagers.
Top 10 NFT tokens by market value. Source: CoinGecko
In the past 30 days, Axie Infinity Shards (AXS) has appreciated 66% against the U.S. dollar, becoming the third-ranked token among the NFT coins with the highest market value. In the past 30 days, the prices of RFOX and MEME have appreciated by nearly 100% against the US dollar.
Axie Infinity Shards (AXS) levels (USD on the left axis and BTC on the right axis). Source: TradingView
The above chart also reflects the upward trend of AXS on Bitcoin (BTC) and the U.S. dollar (USD).
The top is the current blockchain stacking structure, and the bottom is the future blockchain stacking structure. Source: Axie Infinity White Paper
Sky Mavis is developing an Ethereum sidechain called Ronin specifically for Axie Infinity.
Axie Infinity currently uses both Ethereum and Loom network sidechains. Axie and SLP are both ERC-721 tokens on the Ethereum main chain, while land NFT, items NFT, Loom ETH and Wrapped ETH are on the side chain of Loom.
Ethereum will transform the future blockchain tiered structure and connect with other blockchains and Ronin side chains. At that time, all NFTs (Axies, land and items), AXS tokens, SLP and multiple generations will be supported on the Ronin side chain Monetized resources.
Ronin sidechain entered the public test chain in July 2020. The asset transfer from Axie to the Ronin sidechain will be completed in the first quarter of 2021, and the audience for the collection of games will be much larger by then.
Sorare
Cristiano Ronaldo (Cristiano Ronaldo) card
Sorare is a football card game based on Ethereum. It adopts ERC-721 protocol and is certified by more than 150 football clubs.
Sorare was released in May 2020, working with organizations such as Ubisoft and major football data provider Opta, and has now become a popular NFT project. The project employs Barcelona defender Gerard Pique as a strategic consultant, and its staff also includes former football players Andre Schurrle and Emmanuel Seuge.
The Sorare card is a digital collection representing football players, linked to a specific football season. Fans can collect their favorite player card, which is provable and scarce, has a fully digital history record, anti-counterfeiting and anti-plagiarism. There are three levels of Sorare card scarcity in the 2020-21 season: unique card, ultra-scarce card (10 types) and scarce card (100 types).
Sorare cards can be traded at will and can be used in a variety of applications and games. Players can use officially authorized digital cards to compete and win rewards in the global fantasy football game every week.
Sorare’s 5-a-side (SO5) is the first fantasy football game that can use Sorare cards. Players use 5 cards to form a team of players, and the scores won are determined by the performance of the selected players in the actual football match.
The number of Soare users (left axis) and transactions (right axis). Source: DappRadar
Since May 2020, the number of Sorare users and transaction volume has grown steadily. In November, the number of daily active users reached a peak of 110. However, the number of transactions failed to break the record of 1219 in September 2020.
Sorare NFT average price (in USD). Source: nonfungible.com
The value of the Sorare card can be measured in three ways:
Collectible value: Each card has a unique degree of demand and has different values for different players (because of the subjective nature of favorite players, clubs, nationalities, etc.).
In-game value: Cards can be used in global fantasy football games, and players can earn money from them every week.
Third-party game value: Sorare cards will eventually be valuable in multiple games, and game developers will build different new game experiences based on Sorare cards.
Since May 2020, Sorare NFT has been supported by many top football clubs (such as Bayern Munich in November, Real Madrid in December), and the average price has increased to approximately 8 times the original price.
In the past month, one of the cards with the highest sales was the only Sorare card, Kylian Mbappé, which was successfully sold for 116.15 ETH, which was approximately US$66,000 at the time.
Sorare auction amount (ETH). Source: Soraredata
CryptoKitties has led the Dutch auction, or reduced price auction, as the precedent of the NFT price discovery mechanism. In a reduced-price auction auction, the auction item starts at a high price and decreases sequentially until the first bidder responds or reaches the reserve price.
Unlike many popular NFTs such as CryptoKitties and MyCryptoHeroes, Sorare uses British auctions, that is, increasing price auctions. This type of auction is often used on platforms such as eBay. Bidders bid for the Sorare star card, and the highest bidder succeeds in bidding after a certain period of time. If other bidders have higher prices, the bids will be refunded in full at the end of the auction.
The above chart shows that on November 29, the Sorare auction set a record, reaching 194.14 ETH. Another peak of auction sales exceeding 100 ETH appeared on December 17. The increase in auction volume indicates that people’s interest in Sorare cards is rising, which drives the rising valuation of Sorare cards.
Sorare was originally built based on Loom Plasmachain (later renamed Basechain), and later decided to migrate to the Ethereum mainnet because Plasmachain was eventually discarded.
Sorare also plans to actively participate in all phases of Ethereum 2.0 to ensure that the football card game can be scaled, popularized, and free from network congestion. As more and more football clubs grant licenses and more and more third-party applications are built within the Sorare ecosystem, Sorare’s number of users and transactions is expected to continue to grow.
In order to promote user adoption, Sorare is considering to increase user adoption, and Sorare is considering expansion plans such as SKALE and zk-Rollups. SKALE is a flexible decentralized blockchain that supports thousands of independent ledgers, side chains and other Ethereum sub-chains.
zk-Rollups is a huge potential expansion solution that uses zero-knowledge proof to convert hundreds of transactions into a single transaction, reducing network congestion and reducing transaction costs. Smart contracts will be used to deconstruct and verify all transactions in a single transaction. After zero-knowledge proof, it is used to display and publicly record the legality of Ethereum blocks, reducing the amount of resources and data required for transactions.
SuperRare
@notsatoshi’s work “Where is Satoshi Nakamoto?” “, SuperRare available
Established in 2017, SuperRare is a market platform for users to collect and trade unique digital artworks. All artworks created by each artist can be tokenized into digital collections for possession and collection.
The SuperRare platform has more than 600 artists, and so far these artists have earned more than US$2 million. SuperRare’s transaction volume has been sluggish in the first year and a half, and will rebound in 2020, reaching over US$4.5 million. The highest paid artist has earned about 1004 ETH.
Like most NFT projects, SuperRare uses the ERC-721 protocol. Collectors can use ETH to purchase works of art. Artists can get 85% of the proceeds from primary sales.
The Ethereum smart contract has added a secondary market sales franchise to bring passive income to artists. These tokenized artworks can be traded in the secondary market, and artists can receive 10% of the secondary market royalties.
NFT interoperability: SuperRare and Decentraland have reached a cooperation, artists can display their works in a virtual reality environment or the world.
NFT artwork monthly turnover (color examples from top to bottom are known sources, Async Art, MakersPlace, SuperRare). Source: Dune Analytics, rchen8 (excluding Nifty Gateway)
The NFT art market transaction volume has increased from less than US$20,000 in October 2019 to nearly US$1 million in December 2020, spanning four major projects: Async Art, Known Origin, MakersPlace and SuperRare.
SuperRare is one of the major NFT art platforms, accounting for the majority of transactions on such platforms.
The growth of SuperRare artists (lower broken line) and collectors (upper broken line). Source: Dune Analytics, rchen8
The gap between the total number of collectors and artists in SuperRare continues to widen, indicating that the demand for token art is rising.
On this platform, there are twice as many collectors as there are artists. At the beginning of this year, there were 263 artists and 363 collectors. At the beginning of December, the number of artists increased to 658 and the number of collectors reached 1,357.
SuperRare: The number of users (broken line) and transactions (blue area). Source: DappRadar
In 2020, the number of SuperRare transactions has steadily increased, with an increase of over 50%. The number of daily transactions dropped briefly in the fall, reaching an annual peak in mid-September-rising to 632 on September 23.
The number of daily users has increased from less than 80 in January 2020 to approximately 120-140 in December 2020.
From left to right, the header of the table shows the items and the average price. Source: nonfungible.com, data as of December 17, 2020
In the past 30 days, among the top NFT projects by transaction volume, the price of SuperRare NFT belongs to the highest category. As of December 17, the average price reached $1,682.67. Its average price is second only to Async Art and Cryptopunk. At the end of November, the average price of SuperRare NFT reached its peak, exceeding US$3,500, an increase of more than 2200% from the beginning of the year.
Average price of SuperRare NFT (in USD). Source: nonfungible.com
Like Sorare, SuperRare also uses British auctions. In December, SuperRare added two new limited-time auction mechanisms, and the platform fully introduced trust-free British auctions. Artwork and bidding results are not subject to interference from other people, and all auctions are guaranteed on the chain. Ethereum has a set of open source smart contracts as the auction house, which can prevent various fraudulent behaviors (such as ghost bidding, a false bid) that appears in traditional auctions.
Decentraland
Live music performance on Decentraland platform
Decentraland is a continuous and open social virtual reality world built on Ethereum. It raised a total of 26 million U.S. dollars in the initial coin offering (ICO) in August 2017. The nodes running on computers all over the world have loaded content, which means that Decentraland cannot be shut down and will permanently appear on the blockchain.
Decentraland is one of the oldest NFT projects, reminiscent of popular games such as Minecraft and Second Life. On this platform, players can purchase, build, and explore virtual structures, as well as social activities.
Each land package on the platform is an NFT using the ERC-721 protocol and has unique coordinates on the Decentraland map. The distance between the land parcel and the hot area usually determines its value. In external markets such as Decentraland Market or OpenSea, players can buy, sell and lease land.
The new crown epidemic brings lockdown restrictions, which makes Decentraland an advantageous position to hold online meetings/events and provide new advertising methods. Decentraland functions involve: digital artwork display, live music, games, event/conference hosting. Players can not only buy virtual land plots and scenes, but also buy names and wearable equipment for characters.
Decentralized Autonomous Organization (DAO) allows users to participate in the creation and operation of virtual worlds.
Decentraland: The number of users (broken line) and transactions (blue area). Source: DappRadar
Despite being one of the projects with the highest NFT transaction volume, the number of daily users and transactions of Decentraland in 2020 is basically sluggish except for the surge in February.
Decentraland NFT average price (in USD). Source: nonfungible.com
Among the top NFTs by transaction volume, Decentraland has the highest land parcel price (refer to the table below). However, the average price is relatively stable for most of 2020, below $2,000. It soared to over $10,000 on December 7.
From left to right, the header of the table shows the items and the average price. Source: nonfungible.com, data as of December 17, 2020
In order to solve the expansion problem, reduce transaction costs, and increase transaction speed, Decentraland users can use Matic’s Proof of Stake (PoS) side chain, which is a Layer 2 expansion solution built for Ethereum (previously named Plasma) .
Source: MATIC
Matic’s Plasma allows developers to port the protocols in Ethereum to the side chain, which is compatible with the Ethereum Virtual Machine (EVM).
In the test, the side chain has been proven to increase transaction speed, supporting 7,000 to 10,000 transactions per second. Compared with conventional on-chain transactions, the cost is only 1% of gas fees. It can be seen that Matic can encourage Decentraland to support a larger user base.
Future outlook
The user volume, transaction volume, and transaction volume of the top NFT projects are all on the rise. This trend is expected to continue into 2021. In 2021, the cumulative transaction volume of the NFT market is expected to reach US$1 billion. The NFT project has begun to implement and test expansion solutions (such as Loom, Ronin, MATIC, and zk-Rollups), and is considering using (or already using) these solutions to reduce transaction costs and avoid clogging the Ethereum blockchain network.
The development of games and artworks is the two main engines driving the popularization of NFT. People are increasingly interested in NFT fields. The projects listed in this report can fully prove the benefits of this development trend:
Such as the most popular NFT project Axie Infinity. Based on its success, Axie Infinity will introduce land game settings and launch mobile games in 2021. After joining the land game setting, the game will include land plot trading activities, similar to Metaverse games such as Decentraland. At the same time, the game is expected to introduce farming income as real farming.
Sorare is one of the top transactions in the NFT project. Sorare combines blockchain technology with popular licensed card games. Sorare, NBA Top Shot, F1 Delta Time and other projects are spreading the concept of cryptocurrency to more people.
SuperRare is one of the leading art markets. In 2020, the number of artists and collectors will increase steadily. The average price of SuperRare NFT also shows an upward trend, indicating that there is a strong demand for NFT artworks. As more and more artists join the platform, SuperRare’s transaction volume, transaction volume and number of users will further increase in 2021.
Decentraland is the most successful Metaverse NFT project, with the highest transaction volume among such platforms in the past 30 days. As the AR/VR world passes through the early stage of adoption, more and more people become familiar with AR/VR, and more people will definitely adopt the Metaverse NFT project.
