NFTs first hit the mainstream in May 2014 when a digital artist Kevin McCoy minted a nonfungible token called Quantum on the Namecoin blockchain. Last year proved to be a great year for NFTs, thanks to an explosive surge in popularity that led to an increase in NFT supply as well as demand. Now market research from blockchain data company Nansen has revealed that for the first half of 2022, cryptocurrency users spent 963,227 Ether ($2.7 billion) minting NFTs on Ethereum’s blockchain.
The research showed that the minting happened from 1.088 million wallet addresses hosted on Ethereum’s blockchain, with most of this minting occurring at OpenSea.io. Half of the Ethereum cryptocurrency that was raised from Jan. 1, 2022, through June 30, 2022, remained with the NFT projects while 45.7% was disseminated to nonentity wallets. However, since Nansen could only follow transfers from the addresses of the NFT projects to the immediate transaction addresses, it could not capture any subsequent transactions to other parties.
This made it difficult for the firm to make probable conclusions regarding how the funds were used after the first transactions. According to Nansen, there was also a drop in the volume of raised ETH circulating to nonentity wallets from 52.3% eleven months ago to 45.7%. Compared to other coins, NFTs valued at around $77 million were minted using the Avalanche blockchain and $107 million using the BNB chain. Minting on the latter two blockchains happened across 263,800 unique wallet addresses.
ETH millionaires, NFT collectors, a couple of private wallets, Heavy Dex traders and wallets that have used EIP 1559 made up the top nonentity wallets. Around 8% (81,364 ETH) was raised by the top NFT collections within the same period, including World of Women Galaxy, Moonbirds, Pixelmon-Generation, VeeFriends, Genesis Box and Series 2.
In May alone, 69 NFT collections launched, pushing the daily minting volume past 120,000 ETH. In the past six months, 28,986 NFTs in total have been minted as well as sold on Ethereum’s blockchain. And although more than two-thirds of NFT projects failed to raise at least 5 ETH, 140 NFT collections raised more than 1,000 ETH. The median amount of Ethereum crypto raised by NFT projects in the first half of 2022 was 1.43 ETH while the average was 59.4%.
Nansen, the firm behind this research, has created index aggregates such as the NFT 500 to track how the leading 500 NFT collections on the Ethereum system perform.
Needless to say, companies such as BIT Mining Ltd. (NYSE: BTCM) are reaping the benefits of this heightened minting and trading activity involving various digital assets such as NFTs.
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