I’ve been thinking about the NFT market quite a lot lately, mostly scratching my head at some of the prices folks are willing to pay for certain ownership signatures on particular blockchains. I just can’t get that excited about a pixelated ape.
Notably, I am in the huge majority on that point, even amongst the crypto faithful. Data from DappRadar indicates that in the last 24 hours, just 31 traders swapped a mere 18 Bored Ape Yacht Club NFTs. That’s a pretty darn slim market. You might even call it illiquid.
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But there are areas of activity in the NFT market that are both liquid and lower cost that make far more sense to me.
Again leaning on DappRadar data, the busiest hive of NFT activity is Axie Infinity, which has seen 56,099 traders execute 88,027 transactions in the last day. Axie’s world is seeing a multiple of trading activity that the second-busiest NFT grouping saw in the last day, NBA Top Shot with 16,113 traders and 27,929 total transactions.
We can divvy up the NFT market into a few categories, I think, to help understand what we’re seeing here:
Value-extracting NFTs: The transference of real-world value into a digital item. A famous sports moment, for example.
Value-defending NFTs: Low-volume image sets that earn digital cachet, leading to low-volume but expensive digital items.
Value-generating NFTs: NFTs that unlock an activity that are not artificially supply constrained.