Lynn Johannson, Advisor, Sustainability and ESG
January 4th, 2024
Lynn Johannson, President of E2 Management Corporation and Catalyst for THE Collaboration
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OpenSea best month ever, NFT Avatars trend continuation, and Web 3.0 tipping point
Messari | Mason Nystrom | Jul 8, 2021
If someone walked up to me and said at the beginning of the year, NFTs will easily surpass $1 billion in sales, GaryVee will launch an NFT project, and Axie Infinity becomes one of the top five NFT marketplaces, I would have replied, “I’ll believe one of three”. But, the past quarter (Q2’21’) witnessed over $750 million across the top five collectibles, Axie’s Marketplace generated $7.7 million in fees, and GaryVee has already earned over one million in royalties from his NFT project. Let’s break it down.
NFT Bubbles It’s Bubble
The media narrative that the NFT market is dead or that the bubble has popped is objectively mistaken. The media largely focused on crypto art and collectibles (e.g. NBA Top Shot), but the broad NFT ecosystem continues to grow. In fact, OpenSea recorded its best month ever in June in terms of NFT sales volume. Rarible’s poor performance (relative to OpenSea) can largely be attributed to the marketplace not providing access to some NFT categories that boomed over the past few months including NFT avatars, Art Blocks, sports collectibles, and virtual worlds.
See: 10 Highlights From Goldman Sachs’ June 2021 Digital Asset Thought Piece
OpenSea is telling a canary in the coalmine for NFT growth. In June, OpenSea facilitated over 211,000 NFT sales across nearly 40,000 active traders.
Overall, June marked OpenSea’s best month ever for NFT volume, a record number of NFT sales, and its second-best month of active traders.
While OpenSea remains the overall marketplace leader, Axie Infinity surged throughout the quarter becoming the four largest NFT marketplace. Notably, Atomic Market – the go-to marketplace for NFTs on WAX – now ranks 8th in NFT marketplaces.
Avatars: Not The Last NFTs
Perhaps one of the most significant trends throughout the past quarter was the continuation of NFT avatar projects. NFT Avatars – collectibles specifically designed for individuals to represent themselves across the internet (e.g. CryptoPunks) – continued to grow in popularity as the emerging sector generated nearly $350 million in secondary sales throughout Q2’21 and nearly $600 million in the first half of 2021.
Web3 Adoption Hits Tipping Point
The proliferation of Web3 has been long awaited, but failed to manifest fully because of a need for infrastructure across computation, indexing, data management, hosting, storage, and other vital services. However, after many years of building and continued growth, many Web3 protocols are starting to hit their stride.
Middleware layers that have been continuously building for years are now experiencing the on-set of product-market fit. Livepeer a marketplace for video infrastructure providers and streaming applications is processing millions of videos per week and generating several thousands in protocol fee revenue.
Ocean Protocol’s data marketplace – which lets individuals issue data sets as balancer liquidity pools – possesses a TVL of over $3.3 million across 419 data set pools.
File and data storage networks also continue to gain adoption:
- Data stored on Arweave grew another 1.8 terabytes (1,800 gigabytes)
- Storage capacity utilized on Sia has reached an all-time high of 1.09 PB (1 petabyte = 1,000 terabytes) with a capacity of 3.25 PB.
- The total data stored on Filecoin now exceeds 23 petabytes.
Elsewhere, Web3 protocols like Handshake are experiencing increased usage with nearly 1.5 million registered Namebase domains and over 100,000 Handshake domains in use today. Helium’s network adds thousands of nodes per week, resulting in 147 billion data credits spent (equivalent to ~3,500 GBs) for total net revenue of just over $1.4 million (mostly used to add new hotspots).
FFCON21 On-demand Video: The Future of Web 3 0: Decentralized, Open Source and Peer to Peer Technologies
Still, while many individual components of Web3 are poised for their breakout moments, the full stack has yet to find a way to interoperate with DeFi, NFTs, or other Web3 protocols. Web3 is no longer a star in the distant future. The stack is coming together and the stars are quickly aligning.
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