2021 The NFT report by NonFungible.com is out!

For the market NFTs, the year 2021 was incredibly significant. Explosion in the number of wallet, of sellers and buyers, of projects or even of the amount in dollars exchanged … But also the arrival of superstars and international brands that have started using NFTs. Here are some important things from NonFungible.com’s annual report for 2021!

Who is NonFungible.com?

NonFungible.com provides structured and comprehensive information on the Digital Asset Market (NFT), NFT asset assessments, as well as critical news on various projects and background trends using proprietary collection and analysis technology.

The company was originally founded in 2018 to track Decentraland’s real-time transactions, and the company has since grown with the industry and is now one of the mainstays of the non-fungible token ecosystem as a provider of benchmark data and widely considered to be the most trusted NFT market research site.

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Global NFT statistics in 2021

non-fungible annual report 2021 global market
Source: NonFungible.com – Global NFT Stats in 2021

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

There was an increase of 21,350% in the traded USD volume and an increase of 1,836% in the number of sales made, respectively. Although these figures are impressive, this growth had already started in 2020.

It is also important to note this 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 health status of the market. Should the number of sellers exceed the number of buyers, it could mean the start of a bear market.

Another thing worth noting is the number of active smart contracts. Even with a growth of 401%, 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 been difficult to keep up with, which has had two main effects: The rapid rise in prices and 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 NFT. To facilitate the analysis of the entire ecosystem, this report is based on several segments:

  • Metaverse / Virtual World
  • Art
  • collectibles
  • Computer games
  • Utilities and decentralized economy

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

Here are some excerpts and important points to remember:

Art and NFTs

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

The artistic NFT sector raised $ 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 well-known names, the category continues to be one of the most stable parts of the ecosystem.

blockchain games

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

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

The blockchain gaming (or cryptogaming) 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 amount of active wallets in this segment, probably due to Axie Infinity’s ‘wallet’ system, which allows people to give other players access to their gaming accounts and share the generated earnings.

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 experienced 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 increase their investment in Metaverse projects, such as Nike’s acquisition of RFTKT.

NFT collectibles

Profit and loss of Collectible's NFT projects in 2021
Profit and loss of Collectible’s NFT projects in 2021- Source: NonFungible.com

With $ 8,471,807,117 on salethe category of collectibles is far from the most important category in terms of volume.

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

Utilities and decentralized financing (DeFi)

Sales volume and dollars traded for supply segment NFTs and DeFi
Sales volume and dollars traded for supply segment NFTs and DeFiSource: NonFungible.com

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

This market segment includes a wide range of financing, ticketing, insurance and community use cases, such as new social clubs such as Maxwell Tribeca, which require an NFT “passport” to gain access.

The next challenges in the NFT market

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

  • Primarily, user experience (UX). Reducing the number of clicks needed to complete a purchase is the key to a smooth online experience today. Although Binance or Crypto.com have developed extremely user-friendly solutions, this has happened at the expense of the decentralization of the asset.
  • For now, no platform has managed to find a balance between the two.
  • Next, the legal and fiscal framework. With a cryptocurrency regulatory framework that varies by country, the definition of the assets underlying NFTs is still unclear. This complicates the situation for both individuals and companies.
  • Market regulation also became necessary. Due to these legislative differences, the protection of the user of the various projects is difficult to implement. A balance must therefore be found between flexibility so as not to hinder new measures and the fight against fraud.
  • Ecology. The debate ignited the sphere last year, but the ecological issue today is a global emergency. The question of the mining footprint of mining in Proof of Work is central to the discussions, but no final answer has yet been reached.
  • Over-speculation of certain collections. In this context of effervescence, it seems that a competition is being established between the communities already present in the ecosystem and this year’s arrivals. Faced with all these powerful influences from outside, the biggest challenge of the future here will be to preserve 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 provide objective information on risk mitigation practices related to cryptocurrencies. But in addition, it must demonstrate acceptance and adaptation to new applications.

In addition to these challenges, another issue has gained momentum in 2021, namely market manipulation. In February 2022, Chainalisys published a report on the increase in laundry trade in the NFT market in 2021. As early as last year, NonFungible.com had already made this observation by publishing an NFT guide on best practices that allows you to recognize laundry trading techniques in NFT marketplaces.

Finally

The report concludes with several results:

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

Let’s keep a cool head, be aware of the next major developments and do not let ourselves be confused by all these voices»

completes 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 built the ecosystem since 2018 and this wave of newcomers, there seems to be a shift in long-term goals.

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