The 2021 NFT report by NonFungible.com is out!

For the market NFT’s, the year 2021 was incredibly significant. Explosion in the number of wallet, sellers and buyers, projects or even the volume in dollars exchanged… But also the arrival of superstars and international brands that have started using NFTs. Here are some key takeaways from NonFungible.com’s 2021 Annual Report!

Who is NonFungible.com?

NonFungible.com provides information structured and comprehensive digital asset (NFT) markets, NFT asset valuations, as well as critical news on various projects and background trends, using proprietary data collection and analysis technology.

Founded in 2018 initially to track Decentraland’s real-time transactions, the company has since grown along with the industry and is now one of the main pillars of the non-fungible token ecosystem as a provider. of benchmark data and widely regarded as the most trusted NFT market analysis site.

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Global NFT Statistics in 2021

Source: NonFungible.com – Global NFT Stats in 2021

Let’s start with the overall statistics of the NFT market in 2021. Compared to previous years, 2021 was the year of all records. What jumps out at first is the volume in dollars as well as the number of sales that exploded.

Respectively, there was a 21,350% increase in the USD volume traded as well as a 1,836% increase in the number of sales made. While these numbers are impressive, this growth had already started in 2020.

It is also important to note that the number of buyers is always greater than the number of sellers. This indicator is important to observe because it allows you to know the state of health of the market. If the number of sellers were to exceed the number of buyers, it could mean the start of a bear market.

Something else worth noting is the number of active smart contracts. Even with 401% growth, it was nevertheless the trend that was the most moderate. This indicator provides an overview of active projects during the year.

Here is NonFungible.com’s interpretation of this finding:

“In summary, we can see that demand has exploded, and that supply has struggled to follow, which has had two main effects: The rapid increase in prices as well as the multiplication of new “Quick win” projects, low added value »

Focus on the different NFT segments

It’s not just the Bored Ape Yacht Club or The Sandbox in the world of NFTs. To facilitate the analysis of the entire ecosystem, this report is based on several segments:

  • Metaverse / Virtual World
  • Art
  • collectables
  • Video games
  • Utilities and Decentralized Finance

For each of them, a detailed analysis of their performance was carried out. These different focuses make it possible to highlight how these different communities are doing.

Here are some excerpts and important points to remember:

Art and NFTs

Global Art NFT Stats in 2021
Global Art NFT Stats in 2021 – Source: NonFungible.com

The artistic NFT sector racked up $2,798,220,643 in sales. Although this category seems small compared to collectibles and games, it is still a core feature of the NFT asset class.

As digital artists like Beeple and Pak become household names, the category continues to be one of the most stable parts of the ecosystem.

blockchain gaming

Although currently NonFungible.com only supports Ethereum on its site, for this report on-chain data from Immutable X and Ronin could be used for Gods Unchained and Axie Infinity.

Dollar volume of the Blockchain gaming sector in 2021
Dollar volume of the Blockchain gaming sector in 2021Source: NonFungible.com

The blockchain gaming (or crypto gaming) segment achieved $5,177,192,804 in sales. This remains a top segment primarily due to the performance of the Axie Infinity blockchain game.

There is an overwhelming volume of active wallets in this segment, likely due to Axie Infinity’s ‘purse’ system, which allows people to give other gamers access to their gaming accounts and share the revenue generated.

Metavers or virtual worlds

Profits and losses from Metaverse-type NFT sales in 2021
Profits and losses from Metaverse-type NFT sales in 2021Source: NonFungible.com

With $513,868,780 in sales, this segment of the metaverse has seen the strongest growth in the last quarter of 2021, coinciding with Facebook’s decision to change its name to Meta.

This segment is expected to grow in the coming years as consumer brands step up their investments in Metaverse projects, such as Nike’s acquisition of RFTKT.

NFT collectibles

Profit and loss of Collectibles NFT projects in 2021
Profit and loss of Collectibles NFT projects in 2021- Source: NonFungible.com

With $8,471,807,117 in salesthe category of collectables is by far the most important category in terms of volume.

This was largely due to over-speculation on this asset class and the extremely high value sales of a small number of large profile picture collections such as CryptoPunks and Bored Ape Yacht Club.

Utilities and decentralized finance (DeFi)

Sales Volume and Dollars Traded for Utility Segment NFTs and DeFi
Sales Volume and Dollars Traded for Utility Segment NFTs and DeFiSource: NonFungible.com

Despite a “small” score of $530,836,246 in salesthis segment is probably one of the most complex and promising on the market.

This market segment includes a diverse range of finance, ticketing, insurance, and community use cases, such as new social clubs like Maxwell Tribeca that require an NFT “passport” to enter. to access.

The next challenges of the NFT market

Despite figures that have exceeded all expectations, there are still several things to be done for this market to be considered mature.

  • First of all, user experience (UX). Reducing the number of clicks needed to complete a purchase is critical to a seamless online experience today. Although Binance or Crypto.com have developed extremely easy-to-use solutions, this has come at the expense of the decentralization of the asset.
  • For now, there is no platform that has managed to find a balance between the two.
  • Next, the legal and tax framework. With a crypto legislative framework that varies depending on the country, the definition of the assets underlying NFTs is still unclear. This makes the situation complicated for both individuals and companies.
  • Market regulation also became necessary. Because of these legislative disparities, the protection of the user by the various projects is difficult to put in place. A balance must therefore be found between flexibility so as not to hinder new initiatives and the fight against scams.
  • Ecology. The debate ignited the sphere last year but the ecological question is today a global emergency. The question of the carbon footprint of mining in Proof of Work is central to the discussions, but no definitive answer has yet reached consensus.
  • Over-speculation of certain collections. In this context of effervescence, it would seem that a competition is being established between the communities already present in the ecosystem and the arrivals of this year. Faced with all these powerful outside influences, the biggest challenge facing the future here will be to keep the value that defines the NFT community: authenticity.
  • Education and acceptance of the NFT ecosystem. Faced with this influx of newcomers, the NFT community must continue to objectively inform about risk reduction practices related to cryptocurrencies. But in addition, it must demonstrate acceptance and adaptation to new uses.

In addition to these challenges, another issue has gained momentum in 2021, that of market manipulation. In February 2022, Chainalisys published a report on increase in NFT market wash trading in 2021. Already last year, NonFungible.com had already made this observation by publishing a guide to NFT best practices allowing to recognize wash trading techniques on NFT marketplaces.

In conclusion

The report concludes with several findings:

  • An industry both more mature and more immature than ever
  • The Metaverses: Predictable Catalysts
  • A milestone in development

Let’s keep a cool head, stay alert to the next big developments and don’t let ourselves be dazed by all these voices»

concludes the report.

The NFT ecosystem is still very young but despite this, in 2021 international brands and players have invested heavily in it. Between the first generation that has been building the ecosystem since 2018 and this wave of newcomers, a shift in long-term objectives seems to appear.

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We want to give thanks to the writer of this post for this remarkable material

The 2021 NFT report by NonFungible.com is out!


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