Analyze NFT market with blockchain data
Hello, this is Hanamura (Twitter: naomasabit) of catabira. Following on from Tomo’s article in our company, let me share a report that analyzes the NFT market using actual blockchain data.
It’s been a while since the terms Dapps and NFT came into use, now we can see a lot of reports on them. For example,Blockchain Market Report(March. 2019, Japanese only) from Metaps and Dapp.com Q1 2019 Dapp Market Report(April. 2019) from Dapp.com. This article adds some more objective facts to these reports and refers how catabira sees them.
Overview of Dapps
According to the report from Dapp.com, 1,304 Dapps are currently registered, and the total volume in USD is about 3.2 billion.
At first, let’s look at the overview of Dapps. Dapp.com reports that 1,304 Dapps are registered. It reports the ones running on four blockchain platforms, Ethereum, EOS, Steem and TRON, and Dapps on Ethereum accounting for 60% of the total. EOS accounted for 25% and TRON 10%.
As for the market size, the total volume in USD is about 3.2 billion, and most of the market are gambling and exchanges Dapps. For your information, gambling Dapps includes poker and blackjack which you can set a bet, and some of them can be called games, but those with a strong element of gambling are regarded as gambling Dapps.
The percentage of Dapps categories hasn’t changed much in this three months. As of April 1st, gambling accounted for the largest share at around 30%, followed by games at 25% and high risk at just under 20%.
With the exception of gambling Dapps, game Dapps has constant amount of transactions and the category is reasonably large, so the next chapter will dig deeper into the game Dapps and NFT, which is common concept to represent one type of tokens transacted on Dapps.
What’s NFT？
NFT stands for Non-Fungible Token. Non-Fungible, also called “irreplaceable”, means each token is specifically unique and cannot be replaced with another Non-Fungible Token.
For example, CryptoKitties, a digital cat game, Non-Fungible Token is used for making each cat unique. Each cat is given a unique ID and has attributes such as eye color, shape, body hair, etc., and cannot say “A and B are the same cat” even though the cats have same features (Like a real cat). Thus, it is said that NFT is suitable for game items because it can handle tokens with unique information.
Ethereum has standards such as ERC721 and ERC1155. Currently ERC721 is more widely used on working DApps.
NFT market
The NFT market includes the industry leader OpenSea and live commerce player Auctionity. As for Japan, bazaaar developed by BlockBase is one of examples. These are secondary distribution markets, but there are many DApps with in-game primary market feature. At CryptoKitties’ in-game market, you can buy and sell cats with ETH in the game, and MyCryptoHeroes can buy and sell equipments and heroes with GUM: off-chain currency.
To see the NFT market status, we analyzed data of Ethereum because the NFT standard is relatively well established there.
Analyze the NFT market
We analyzed transactions of the NFT standard ERC721.
【Methods】
・Period: October 1st. 2018～April 30th. 2019
・Targets of this analysis are the secondary distributions on Opensea and the transactions of ERC721 token on in-game primary market.
・Only Dapps meet the ERC721 standard. Tokens that are NFT but not in the standard ERC 721 format, like Decentraland, are not included in this analysis
・Analyzed only ETH transactions and do not include Wrapped Ether or original token transactions.
In terms of total volume in USD, Hero tokens from MyCryptoHeroes are the most popular, followed by CryptoKitties.
The total volume in USD during the analysis period was 48,565 ETH. The horizontal axis shows the NFT name(“NULL” is untitled token). Hero tokens from MyCryptoHeroes are the most popular, followed by CryptoKitties, extension items of MyCryptoHeroes, and NFT from MLBCryptobaseball, a baseball Dapp.
Although you can grasp the volume of each NFT, new Dapps released during the analysis period are also aggregated, so additional analysis would be needed to compare Dapps more equally.
Next, we analyze the transaction volume of each NFT taking into account the time series information.
CryptoKitties trading volume is shrinking while others are increasing
This area chart shows monthly trading volume of NFT. CryptoKitties’ transaction volume has tapered slightly, while MyCryptoHeroes’ transaction volume has increased.
Some of them saw a temporary increase in transaction volume. According to my research, those increases mostly occur during their NFT token sale.
As for MyCryptoHeroes, both Hero and Extension are high volume, and may be driven by high price.
Because of the large number of Dapps themselves, we have excluded Dapps with null name or with less than 1,000 ETH total transaction volume. A color legend is displayed on the right.
You can see from the chart that HyperDragons has a stable transaction volume and the transition of WarRiders.
It’s worth noting that MyCryptoHeroes is split between Hero and Extensions (equipment), but the Extensions are comparable in value to other Dapps games alone.
The median of traded ETH are shown in the figure above. MyCryptoHeroes, which has the largest market share, has a high median unit price at 0.325 ETH (at the time of writing, it was about 82.05 USD). It shows relevance to market volume.
Sum up
Although it is not complete because it does not include off-chain transactions or transactions with non-ETH tokens such as Wrapped Ether, data on the blockchain in this article has shown an overview of the NFT market.
Recently, the market of NFT such as OpenSea has been released, many NFT tokens have been exchanged there, and some Dapps have started to lead the market besides CryptoKitties. When measuring the activity of Dapps, the transaction volume is often focused on. However, these data show that the NFT unit price is also useful as an indicator since the market size is determined by multiplying the transaction volume by the NFT unit price.
