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Nonfungible tokens (NFTs) got off the ground in 2021, and Nonfungible.com reports that NFT game sales reached $5.17 billion over the year.
L’Atelier BNP Paribas and NonFungible.com released a report on the entire NFT market, saying that larger NFT sales for all markets in 2021 were $17.6 billion, 200 times more than $82 million in 2020 .
That means many people believed that NFTs, which use the transparency and security of blockchain’s digital ledger to authenticate unique digital assets, are the next big thing. But perhaps an equal number believe that NFTs are full of scams, pump-and-dump schemes, money laundering and other things that are bad for consumers.
The thing about blockchain is that it is transparent, and so it is not difficult to do this kind of accounting. L’Atelier BNP Paribas and NonFungible.com found that there are more than 2.5 million digital wallets holding or trading NFTs, up from just 89,000 wallets the year before. If all those portfolios participated in NFT purchases last year, that means the average purchase of NFTs during the year was $7,040. The actual number of NFT buyers increased from 75,000 in 2020 to 2.3 million in 2021.
“2021 was an incredible year. To many, the explosion that surrounded the Collectibles segment is considered a “bubble,” Dan Kelly, CEO of NonFungible.com, said in a statement. “On the contrary, we believe that every community created in 2021 today has a digital identity. It is essential that there are strong values supported by strong communities as we begin to build a brand new web3 industry.”
Kelly added: “Even if the numbers in all segments for 2021 are very encouraging, we can anticipate an overall decline in activity in 2022, but it will undoubtedly be more mature.”
I think this means there’s a very narrow base of cryptocurrency fans who loved buying NFTs as they got trendy over the year, explaining things like the artist Beeple who created an NFT artwork in March 2021. sold for $69 million. For whatever reason, buying NFTs became hugely popular in 2021, as did buying Bitcoin. But the market showed that what goes up can come down, and HODLing, or “holding on for life,” was not for the faint of heart.
The report said that by 2021, NFT projects moved from simple tradable collectibles to more sophisticated virtual assets targeting the metaverse.
In a separate report from Quantum Tech Partners, blockchain game companies raised more than $3.3 billion in 2021, compared to virtually nothing the year before.
More than $5.4 billion in total profit was generated when buying or selling NFTs, with 473 portfolios each generating more than $1 million in profit in 2021.
The most popular category of NFTs were collectibles, generating $8.4 billion in revenue. This includes collections such as CryptoPunks and Bored Apes.
NonFungible.com’s fourth annual survey tracked the rapid growth of a new asset class as the market became more mainstream.
NFTs are digital blockchain linked assets that, unlike cryptocurrencies, are completely unique and not interchangeable with other assets. Examples range from programmable art to physical asset ownership records and virtual land parcels in metaverse-like platforms. Because each NFT is unique and impossible to replicate, they can bridge the gap between the virtual and physical economies and provide a potentially huge market of valuable digital goods that can be scaled, collected and traded, according to Nonfungible.com.
The metaverse comes in the form of The Sandbox.
The report tracked all on-chain transactions on the Ethereum blockchain using the ERC-721 token standard, as well as other leading NFT blockchains Flow, Ronin and Starkware, all collected using proprietary technology.
The methodology ensured that wash trading, bots and trading volumes that could not be associated with a specific project, along with additional “noise” on the blockchain that cannot be considered legitimate NFT activity, were not included in the total sale for the year, in order to give a more accurate picture of the actual market.
Market activity also increased significantly. Of the more than 71 million active Ethereum addresses, a total number of active wallets trading NFTs (including buying, selling, holding or using in a blockchain application) rose from 89,061 in 2020 to more than 2.5 million in 2021 (2,574 .302); an increase of 1.822%.
NFT market by segment
Spatial can now show off NFT art in its virtual galleries.
NFTs have a range of use cases. The report found that collectibles were the largest category with sales of $8.47 billion, driven by the over-speculation on this asset class and the extremely high resale value by a small number of major profile photo collections such as CryptoPunks and Bored Ape Yacht Club. One of its biggest successes was NBA Top Shot, which, in partnership with Dapper Labs and the NBA, captured the highlights of basketball games.
Games were next with $5.17 in revenue, mainly due to the achievements of the blockchain game Axie Infinity, which allowed players to earn money from the sale of NFT items. There is an impressive number of active wallets in this segment, probably because of the “exchange” system in Axie Infinity, which allows people to give other players access to their game accounts and share the revenue generated, according to Nonfungible.com.
NFT art sales reached $2.79 billion. While this category may look small compared to collectibles and gaming, it remains a core feature of the NFT asset class; and as digital artists like Beeple and Pak become household names, the category remains one of the most stable parts of the ecosystem.
The metaverse category also saw revenue of $513.8 million. This segment saw the most growth in the last quarter of 2021, coinciding with Facebook’s decision to rebrand to Meta. This segment is expected to grow in the coming years as consumer brands invest more in Metaverse projects, such as Nike’s acquisition of RTFKT.
And utilities had revenues of $530.8 million in 2021. This is a market segment that encompasses a wide variety of use cases in finance, ticketing, insurance and communities, such as new social clubs like Maxwell Tribeca that require an NFT ‘passport’ for entry. This segment is probably one of the most complex and promising in the market.
The market hit is feverish in the summer of 2021 and peaking in August, when nearly $400 million worth of NFTs were traded in a single week. By the end of 2021, NFTs hit the mainstream: “NFT” was named the Collins Dictionary’s Word of The Year, and NFT artist Beeple appeared as a guest on The Tonight Show and Joe Rogan Experience.
“2021 was a breakthrough year for NFTs in terms of the volume and value of transactions, the interest of mainstream brands, the emergence of new digital communities and the tens of billions of dollars in funding that went into projects,” said Nadya Ivanova, chief operational officer at L’Atelier BNP Paribas. However, we have yet to see how much of that translates into real products and tangible value for users.”
Ivanova added: “In 2022, while the NFT market will remain volatile, I expect that the better projects will also mature technologically, socially and commercially. In addition to the focus on NFTs as popular collectibles, there is currently a real need and opportunity to build infrastructure and utilities for this emerging market and asset class, such as financial and risk management products. The NFT market has barely pushed the boundaries of the underlying technology.”
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This post Nonfungible.com: NFT game sales reached $5.17 billion in 2021
was original published at “https://venturebeat.com/2022/03/09/nonfungible-com-nft-game-sales-hit-5-17b-in-2021/”