IS THE NFT MARKET STARTING TO COOL DOWN? THE INDUSTRY WILL NOT BURST!
After record growth in March, the sales of non-fungible tokens have gone into decline. Experts explained what stage the market is in and whether the current situation is a bubble.
In early April, the market for NFT tokens (non-fungible tokens) shifted to a decline. While sales rose to a record $200 million in March, there is now much less activity in this market, according to marketplace Nonfungible.com. The average NFT value has dropped 67% from its peak in February — from $4,300 to $1,400.
Other data also point to the fall. On March 27, 179,000 tokens were sold on the site. Since then, that number has been declining and as of April 5 is 155,600. During the same period, the number of active sellers also decreased by 5.3% — from 20,600 to 19,500. In March, the NFT market showed growth — the volume of non-fungible token sales reached a record $200 million. This is more than it’s been sold for the entire year 2020.
When any new project enters the market, it is accompanied by excitement and pump, after which there is a correction, however, after the correction, usually, stabilization and smooth growth follow.
Potentially, there will be a correction now, but this industry will not burst, and there will be really strong players and projects that will still bring good profits.
The excitement around NFT will gradually pass away and give the way to normal and stable market development, technology can no longer surprise the art world, but NFTs can find “new ways to express themselves.”
NFT will not disappear, tokens will find their niche. There is great potential for non-fungible tokens in the financial sphere, for example, as a digital alternative of bearer shares or a tokenized version of gems.
NFT technology promises numerous implications, including ones that extend beyond the cryptocurrency industry.
NFTs are creating new tokenized markets for assets outside of the blockchain, bringing new people into the industry through the digitalization of art and collectibles, and laying the legal groundwork for dealing with tokenized assets.
The growth in the number of examples in NFT technology and, consequently, its value, is not as fast as many adherents would like it to be. As a result, the market of non-fungible tokens may be accompanied by corrections that many people may take for the bursting of the bubble.
How to create and sell your own NFT token
The most popular platforms for working with non-fungible tokens are Rarible, OpenSea and Mintable. They provide the opportunity to create your own collections of tokens. This requires an Ethereum wallet and content that will be linked to the token. Pictures, music, videos, and 3D models will do. You can also add the locked content when creating a token that only its owner can see.
Most tokens are sold in an auction format. But to be able to sell them, you will need to pay a transaction fee on the Ethereum network. OpenSea creates an NFT token after it’s been purchased and charges the buyer a commission. This saves the creator from additional costs. Rarible works on a different principle and charges the author a commission. The amount of commission will depend on the Ethereum network load. At maximum load, the commission can be over $80.
Buying someone else’s token
Thousands of virtual lots are already being traded on the Rarible, OpenSea and Mintable platforms. Domain names, digital art, virtual real estate, gaming items, and collectibles sets are among them. Purchasing these lots will also require an Ethereum wallet with digital coins.
The CryptoPunks collection can be found on OpenSea, which contains 10,000-pixel portraits. Initially, they were distributed for free by the authors, but now the drawings are valued at hundreds of digital coins. One of the drawings was recently sold for a record 4.2 thousand Ethereum ($7.49 million).
You can also find virtual real estate from The Sandbox on their website. For example, a piece of digital land was recently sold for 85 Ethereum ($146k), which is the same price as land in the real world.
Getting tokens for free
Various developers and creators of NFT projects often hold token giveaways on their social networks to attract new audiences. That’s what Don Wonton, one of the founders of the Avalanche project, does. To participate in giveaways, you need to follow his Twitter account and repost his posts announcing the free giveaway. You must also attach an Ethereum wallet in comments for the giveaway.