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Eight must-see transaction data for investing in NFT



The NFT industry appears to be a major player in the blockchain universe, and more specifically, at the heart of the Ethereum blockchain. How does this manifest itself? Are NFTs a big part of Ethereum activity? Will Ethereum Become the Most Used Blockchain for NFT Projects? (1) NFT transaction volume vs global on-chain transaction volume 2020 NFT transaction volume vs the total transaction volume of the Ethereum blockchain (black is the NFT transaction volume, yellow is the total transaction volume of the Ethereum blockchain) First of all, it should be noted that , there are two independent variables in the above figure: NFT transaction volume and the total transaction volume of the Ethereum blockchain. There doesn't seem to be a clear connection between the two. In addition, it can also be noticed that compared with the total transaction volume on the Ethereum blockchain, the average weekly NFT transaction volume is extremely low; the weekly transaction volume on the Ethereum blockchain exceeds 5 million, while the NFT transaction volume is 12 million. Ten thousand. (From top to bottom, the total amount of NFT transactions; the total amount of Ethereum blockchain transactions; the ratio of the upper and lower) Compared with previous years, during 2020, the NFT transaction volume has dropped significantly. The reason for this relative decline is the rise of sidechains. Side chains allow projects and encrypted game publishers to provide players with a large number of off-chain interactions without high costs and reduced delays. At the same time, projects and encrypted game publishers only need to interact with the main chain for key transactions, such as assets in user wallets trade. Sotheby’s and Future Perfect Ventures invest $20 million in NFT tech company Mojito: Golden Finance reports that Mojito, a suite for creating non-fungible token (NFT) marketplaces, has secured $200 million from Sotheby’s and Future Perfect Ventures million in funding, valuing the company at $100 million. The round was led by Future Perfect Ventures. Other participating investors include Connect Ventures, an investment firm comprised of Creative Artists Agency and venture capital firm New Enterprise Associates, Moore Strategic Ventures, CMT Digital and Sfermion. (CoinDesk) [2021/10/22 20:47:28] (2) NFT market size vs encryption market size From the perspective of transactions, it can be seen that compared with the total amount of activities on the chain, the industry size of NFT is still smaller. Now that NFTs are viewed by many as a store of value, how does the market cap of NFTs compare to the market cap of major cryptocurrencies? Is the NFT market growing every year? Market value Note: The market value of NFT is calculated according to the formula, that is, the total supply of each NFT Ticker X the average value within one year, and takes into account the relative liquidity rate of each NFT Ticker. The annual cryptocurrency market capitalization is calculated based on the average daily cryptocurrency market capitalization over a year. Tesla's stock market value has evaporated by $215 billion since the disclosure of Bitcoin investment: Since Tesla disclosed its investment in Bitcoin on February 8, Tesla's stock market value has evaporated by $215 billion. At present, Tesla CEO Musk's worth has fallen back to the third place in the world, ranking behind Jeff Bezos and Bernard Arnault. (Golden Ten) [2021/2/24 17:45:40] It can be seen that in 2019, NFT has achieved solid growth during the crypto winter: NFT accounted for more than 1% of the entire Ethereum market value, and it has a significant impact on the Bitcoin market value. There are also certain benefits. The stable value of NFTs compared to these two major cryptocurrencies should be interpreted. During 2020, the value of BTC (Bitcoin) and ETH (Ether) has grown significantly, which proves the solidity of the NFT industry, although the developing ecosystem of NFT is much smaller than the other two. Almost like other cryptocurrencies, the value of ETH has fluctuated wildly during 2020, rising from $107 in March to over $650 by the end of the year. Will the value fluctuations of Ethereum's core cryptocurrency have an impact on the NFT industry and market? If yes, is this impact positive or negative? Compared with the basic cryptocurrencies in history, the independence of the NFT industry proves that this young ecosystem will continue to liberate, continue to develop, mature, and achieve self-sufficiency. (3) Number of Active Buyers & Sellers vs ETH Price 2020 Weekly Number of Active Buyers & Sellers vs ETH Price Circle received a strategic investment of US$25 million from DCG The annual on-chain stablecoin transaction volume is nearly US$600 billion: Circle and Genesis established With a strategic partnership, it will add yield and lending services to USDC products. In order to promote the use of USDC, Digital Currency Group, the parent company of Genesis, made a strategic investment of $25 million in Circle. Digital dollar stablecoins have experienced tremendous growth in 2020, recently surpassing 12 billion in circulation. Research firm Messari estimates that on-chain stablecoin transaction volume will approach $600 billion this year, second only to PayPal's total transaction volume of $712 billion in 2019. (Circle official website) [2020/7/30] (Red is the number of NFT buyers, blue is the number of NFT sellers, and green is the price of ETH) Source: In the last quarter of 2020, with the recovery of the value of Ethereum and A simultaneous decrease in network costs and a significant increase in the number of NFT buyers/sellers. It is difficult to attribute this surge to either of these factors alone. (4) Transaction volume vs ETH price Weekly NFT transaction volume vs ETH price in 2020 (yellow is NFT transaction volume, green is ETH price). On the contrary, there is no direct correlation between ETH price and transaction volume. On the contrary, as the price of ETH continues to rise, the transaction volume has dropped sharply in the past six months. Hubble Chain received a strategic investment of US$300 million from Baisha Holdings: According to official news, on February 28, 2020, at the ongoing Hubble Chain Consensus Galaxy Asia Forum, Baisha Holdings announced a long-term strategic investment in the Singapore Hubble Chain Foundation. The total investment is 300 million U.S. dollars, and the annual investment is 100 million U.S. dollars, which will be distributed continuously in 3 years. It is reported that this batch of funds will be used for the related research and development of Hubble Chain’s Silicon Valley Technology R&D Center in the United States, and fully assist the independent research and development of Hubble Chain’s core technology. Baisha Holding Group is a large-scale chain operation enterprise integrating hotel catering, commercial trade, real estate development, shop leasing, tourism development, etc. Hubble Chain is a public chain with a decentralized trading system. It focuses on the three-step strategy of smart mining, smart center and smart incubator to create a global blockchain financial ecology. HB is the native token issued on the main network of Hubble Chain, with a total issuance of 678 million pieces. [2020/2/28] The report believes that this phenomenon is related to two factors: the pre-sale of NFT projects that began in the first half of the year. Additionally, when the price of a certain cryptocurrency is relatively low, buyers and collectors take the opportunity to fill their portfolios with new assets. If the market is benchmarked against ETH, the dollar sales will not be excessive anyway, so the dollar price of the asset will automatically increase. All in all, the crypto winter appears to be a good opportunity for collectors and NFT buyers to expand their portfolios, potentially storing this acquired value and using it when prices improve. (5) ETH transaction volume vs ETH price dynamics | Bitmain completed investment in Bizkey to deploy digital currency offline payment: Recently, Bitmain announced the completion of investment in Bizkey to lay out digital currency offline payment infrastructure. It is reported that the investment will bring support from the BitcoinCash community to Bizkey. Previously, Bizkey has received joint investment from Viking Capital and JRR Crypto, as well as investment from Qifu Capital, DCM, Bixin, Mars Consensus Lab, Biworld, Yuandao Capital and other institutions. [2018/8/2] Weekly ETH transaction volume vs ETH price in 2020 (blue is ETH transaction volume, green is ETH price) In September, ETH's transaction volume soared sharply, which is related to the decline in Gas fees rather than the increase in ETH prices There is a big relationship. This September spike is likely due to Ethereum’s previous liberation from unprecedented network congestion that kept the market on standby. During this surge, the price of gas fees fell, allowing ordinary users to return to the market. In this specific context, most users who want to buy and sell NFT have to wait for the price of network fees to drop before taking action. When mentioning NFT, it is inevitable to mention Ethereum, and when it comes to Ethereum, it is impossible to bypass Gas fees. What is the gas fee? How will it affect the performance of NFT? Gas is a unit used to measure the amount of computational effort required to perform a specific operation on the Ethereum blockchain. It can be seen from the name that the principle of Gas is similar to gasoline, which is used as the energy of the car to ensure that the car can run normally, while the Gas on the Ethereum network "refuels" the transaction behavior of the blockchain and allows users to perform different tasks. operate. Gas (GWEI) fee is to support Ethereum Virtual Machine (EVM) transactions. Whenever a transaction occurs on the Ethereum blockchain, the wallet that initiated the transaction must pay a network fee, called Gas or GWEI, which is used to pay miners. The Ethereum Virtual Machine is a Turing-complete machine that can execute arbitrary code, which is one of the main reasons why Ethereum is so powerful. But at the same time, this also makes it more susceptible to the halting problem (determining from the code and input of an arbitrary computer program whether the program will end or continue running forever). In order to prevent various situations from happening, Ethereum has introduced the Gas mechanism. After the introduction of Gas, users cannot execute a program that will never stop. The cause of this problem may be a code problem, or someone may interfere with it. Gas fees can prevent the program from running forever and prevent the entire network from coming to a standstill. The price unit of Gas is gwei, and the unit of gwei is smaller than Ethereum, and 1 gwei is equal to 0.000000001 ETH. In most cases, Gas has very low transaction fees and has no direct impact on the market. But in 2020, with the emergence of decentralized finance (DeFi), the number of transactions that the Ethereum network needs to manage has exploded. The transactions are particularly complex due to the variety of financial instruments used in these transactions. The direct consequence of this to users is that the Gas fee for all transactions has risen sharply, and the price of NFT has risen rapidly. In some cases, transaction fees are even more expensive than the asset itself. The sudden increase in Gas fees will have a visible impact on the NFT ecosystem, and there is a dependency between the technical situation of the Ethereum network and the non-homogeneous token market it supports. Next, this article will use the latest data report, that is, the data report as of 2020, to detail the negative impact of rising Gas fees on NFT sales, average sales, and the number of buyers. (6) NFT sales VS Gas fees Comparison of NFT sales and Gas prices in 2020 (black is NFT sales, red is Gas prices) The above figure clearly shows that the sharp increase in Gas (GWEI) fees has prevented many users from Conduct NFT transactions. Throughout July and August 2020, sharp price increases in GWEI reduced weekly NFT trading volume. Starting from mid-September, when the gas cost begins to drop to a price that users can afford, the sales volume will automatically increase. The conclusion of this first analysis is that there is a predictable and clear correlation between gas cost and the activity level of low-end users. (7) Comparison of average NFT sales value VS Ethereum Gas fee in 2020 Sales, but also affect the average sales. During peak gas fees, only large holders, NFT collectors, so-called “whales” can continue to trade NFTs. The above figure can show that the average price of NFT transactions has risen sharply with the surge in Gas fees, and the average price of NFT has increased. This does not indicate that the value of the NFT itself increased, but rather that only particularly expensive NFT transactions were still possible during this period, and that these fees accounted for only a small fraction of all transactions. (8) Number of NFT buyers VS Gas fee Comparison of the number of NFT buyers and Gas price in 2020 (yellow is the number of NFT buyers, red is the gas fee) In addition to the two points mentioned above, the gas fee also affects NFT buyers The number of , that is, the impact of high Gas fees on the corresponding number of NFT users or wallets during this period. The graph above shows that this effect is also visible, although not as pronounced as the previous two comparisons. It is not difficult to observe that when the Gas fee rises, the number of NFT users will gradually decrease. There is no doubt that the NFT ecosystem is full of vitality and great potential, and the exploration made by existing projects is only the surface of this industry. NFT is still a young, early-stage development field, and many new ideas and projects are brewing. Even so, this ecosystem has a profound impact on other mature industries, and this profound impact will continue.


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