The crypto space was in turmoil, losing almost $268 billion in a week. And the total market cap lost nearly a quarter of its value within a few days. While BTC hit a multi-year low price near 15,600 dollars, ETH tested its support of the $1000 level. It was a brutal bloodbath for the altcoins. What’s the outlook and sentiment of NFTs?
The collapse of FTX has sent waves through the crypto ecosystem, and the NFT market is on shaky ground amidst all the chaos. Let’s see the most important news of the NFT space in the second week of November.
1) Solana NFTs Eco-system is Very Volatile
Solana NFTs are in for heavy volatility, as Solana, heavily backed by Alameda, nosedived to a low of $12.37. The total value locked (TVL) on the Solana chain has also tumbled to nearly half. Even scarier is the upcoming almost $1B SOL unlock. The ecosystem will implode even further if the unlocked Solanacomes onto the open market. Unsurprisingly, a large chunk of Solana users has already started the rush to the exit.
The monumental rise in the trade volumes of Solana marketplaces is a testimony to the strength that Solana NFTs have. There was a time when MagicEden’s weekly trade volume increased by a whopping 700%! The total number of traders also almost tripled to 1,00,000. Typically, a rise in volume and number of traders is a positive sign. It could mean that the ecosystem is getting more traction.
The floor price of the top 5 projects by volume on @MagicEden all bounced back very quickly on healthy volumes.
This just show how resilient $SOL NFT mfers really are.
Full Disclosure- I got huge bags in all 5 – except t00bs – down to only 1 t00b at the moment. pic.twitter.com/H3tQC01SrC
— S🟠L PRINCESS 👑 🇦🇲 (@SolanaPrincess) November 10, 2022
However, in the scenario we are currently faced with, Solana NFTs holders are liquidating their possessions and exiting the ecosystem. The recent crypto crash has amplified this. We saw users and holders exiting NFT holdings when Magic Eden announced it was allowing users to choose if they wanted to pay royalties. Since then it a downward spiral has taken place.
2) Buyers Drying Up With for Ethereum Based Collections
The NFT market is not what it used to be. A 0.1+ ETH from a single flip was common. Now with the lack of buyers, the days of flipping NFTs with ease are long over.
The zero royalty revolution led to October having a lower volume than its previous month. Since many projects solely relied on royalties for revenue, they wash-traded to attract exit liquidity.
We also witnessed the highest percentage of OpenSea Wrapped ETH volume VS ETH volume. It implies that sellers are accepting existing bids without bargaining. Usually, it is buyers buying at prices offered by the sellers.
3) Trade volume of Ethereum Bluechip NFT Collections
The floor price of nearly all prominent blue chips in Ethereum plunged this week except for Artblocks and Renga. And the trade volumes of almost every collection increased significantly compared to last week.
4) Top NFT Sales of Last Month
We did see a lot of NFTs going for mindblowing prices this month as well. If anyone was in doubt, NFTs are here to stay.
However, a piece of alarming news is that Alameda Research owns a 92-NFT collection. Within the NFT collection, rare Bored Ape Yacht Club NFTs are found as well as Otherdeed for Otherside tokens created by Yuga Labs. According to Ivan Yakovenko, the founder of the NFT valuation site DeepNFTValue, the collection could be worth between 4,000 and 5,000 ETH, or around $4.7 million to $5.8 million. Here are the Top 5 NFT collections.
Source: DappRaddar
The scenario is similar to the Three Arrows Capital disaster earlier this year, which threatened to liquidate the crypto hedge fund’s multimillion-dollar Starry Night NFT collection. We can only hope Alameda will not need to liquidate the collection.
5) Ethereum NFT Ecosystem
The market conditions of Ethereum NFTs are not as grim as Solana NFTs. But the persistent increase in the (lower pricepoint sales) volume is worrying. Could the ongoing chaos result in even more sell-offs?
A report from DappRadar states an 18% growth in monthly unique NFT traders. It could mean that the market is still in demand. The NFT market is far from dead, and its current slump is more a result of socioeconomic issues than a decline in collector interest. Here is a daily Ethereum-NFT sales report:
Source: Flipsidecrypto
6) Quick news round up
1) Bored Ape Founders Propose New NFT Royalties Model
- The creators of Yuga Labs defended NFT creator royalties and criticized marketplaces that do not accept it.
- They suggested an allowlist system that is community-run and gives creators control over which marketplaces can handle secondary sales of their NFTs.
2) The Bank of Russia suggests regulating NFT and smart contracts
- The central bank of Russia proposed a thorough framework for trading digital assets.
- The majority of the information in the document relates to digital assets issued in Russia in accordance with the 2020 law on digital assets.
3) Following complaints from creators, OpenSea promises to enforce NFT royalties
- OpenSea announced that it would keep enforcing creator royalty fees in future.
- The trading platform stated on 5th Nov that it would consider making them optional for traders.
4) Instagram NFTs Sell out instantly
- The NFTs of prominent creators are quietly released via the Instagram sites of the individual artists, and most of the drops have already sold out.
- The first NFT in the series, which is on the Polygon Network, from photographer Driftershoots has a 2.7 ETH floor price.
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