Analysis of NFT volume trends
ERC20 is not the underlying protocol standard for NFT, but understanding ERC20 will help us understand ERC721.
ETH plays an important role in the ecology of the blockchain industry, and one of the reasons is that ETH is the king of “issuing tokens”.This has two meanings: firstly, ETH has a complete ecology, so there is a consensus basis for issuing tokens on Ethereum, for example, the DeFi field is basically grown up on ETH this summer. Secondly, the token-issuing program written in ETH’s solidity language is very simple and convenient, and some integrated websites can issue tokens in one key, which is very efficient and requires low cost and short time.
The tokens in the above chart are basically issued by the ERC20 protocol, that is, “ERC20 tokens”, which can be issued on the ETH public chain without the need to build additional public chains. At present, the top 50 ERC20 tokens have a market capitalization of $60 billion (as of November 25, 2020), and the transaction amount has reached $10 billion.
- This site contains 853 ERC20 tokens from all over the world. The $60 billion in the preceding article is the result of ETHERscan data accounting: https://ETHerscan.io/tokens?sortcmd=remove&sort=marketcap& order=desc
2. On-chain data related to the ERC721 protocol, the most commonly used in the NFT space, can be found here: https://ETHerscan.io/tokens-nft
3. ERC1155 on-chain data: https://ETHerscan.io/token/0x5963fd7ca9b17b85768476019f81cb43d9d1818e
DeFi rose in April 2020, peaked in September and then turned down, while the NFT market had its high moment, climbing strongly from September onwards. And reached its annual high on the 27th, trading at $540,000 in a single day!
NFT Daily Trading Volume
At the beginning of November, NFT daily trading volume remained around $300,000-$400,000, which is a positive trend maintained after the NFT market slowly climbed, as the trading volume remained stable in the range of $200,000–300,000.
“In September 2020, the NFT market volume successfully exceeded $7 million, surging by more than ten times during the month; in October 2020, the volume exceeded $8 million, and the upward trend continued; as of October 17, 2020, the NFT market volume had exceeded $136 million, and 5 million NFTs were sold at an average price of about $27.3. In recent months, there has been a clear trend of growth. In addition to this, the NFT auction unit price has also set a new record for a single NFT sale, with Block 21, the 21st painting in the Portraits of a Mind series, successfully selling at Christie’s in New York on October 8 for over $130,000, more than six times its initial estimate.”
These are some of the reported data. With a daily trading volume of only $300,000 or so, the overall NFT market cap is still small and the market under the ERC721 is still in its infancy. There is a thousand-fold gap from $300,000 to the $10 billion market cap level of ERC20 daily trading volume, which means two things:
First, the NFT field is still in its early stages and has a long way to go before it truly matures.
Second, the NFT field has a very broad prospect. If we evaluate the possibility of landing scenarios, ERC721 and ERC1155 protocols are better than ERC20, which means that this field has at least a thousand-fold growth rate, which is a very imaginative field.
Industrial upgrades of the scalping party
According to some data, the number of people buying e-tickets worldwide in 2019 will be around 1 billion. Of course, this figure may be problematic because it’s hard to count and it’s smaller, just think about how many people there are in China every year during the Spring Festival. Though it’s not about tickets we would discuss today, still, it’s one of the biggest future landing scenarios for NFT.
So someone made an optimistic estimate, assuming there are 1 billion people transacted each year, and 10 million blockchain-related people (practitioners + people who have transacted BTC) worldwide (although many people don’t think it’s even 10 million), then 1% of 1 billion people could double the traffic in the blockchain space if they converted. This is true in theory, but it’s only theoretical, and there’s no telling how long it will take for NFT to land. Over the past two months, all NFT concept tokens such as Rari and Whale have similarly halved in value.
As long as there is room for speculation on a ticket for a period of time, a secondary market can be formed, and then the NFT can step in. Of course, a scalper can step in too.
Let’s take the example of tickets to a boxing match (think of a fight between Mayweather and Pacquiao), where, say, a ticket costs $10,000, but you can’t actually get it for $20,000, and the scalper is born.
According to the different information of each ticket, such as number, location, etc., the NFT of the electronic ticket can be formed, and then it can also be traded directly in the secondary market online and the audience can enter the competition site based on the NFT blockchain information.
Of course, admission is not the most important thing, but the most important thing is that the secondary market for this ticket is most suitable for NFT. This memorable ticket can also be used as a personal collection after watching the match, and the ticket NFT can become a collectible NFT and create a market.
This situation also applies to the concerts of such a superstar like Michael Jackson, when Michael’s last concert, due to his death, could not go on properly, but most fans still treasured the unused tickets rather than choosing to return them. This would have been a good secondary market if the tickets had been made in NFT.
Theoretically, the biggest landing application of NFT is the industrial upgrade of the scalping party.
In terms of data, whether the token prices or trading volume, the NFT field is not an exciting field. But in terms of the landing scene, NFT and the real world are very close, and this “close” is not NFT art trading. I personally do not support the speculation of NFT digital art, but it is possible to add NFT game props in large online games, and the biggest landing scene is the electronic bill service and the industrial upgrading of related scalping party.
Article from Chidu Blockchain
Translated by Yang(Mengyan Finance)