Major NFT marketplace OpenSea has recorded a daily trading volume of about $52 million on Thursday, a dramatic plunge from its $323 million peaks in August, according to data revealed by Ethereum analysis provider Dune analytics.
Many have started to believe that the decline in demand is attributable to the NFT bubble finally bursting. However, some analysts believe that the NFT is still vibrant as ever.
Ong Joo Kian, a research analyst at Delphi Digital, noted that there were several notable projects in late August, with sales significantly increasing due to projects such as Mutant Apes Yacht Club. Hence, subsequent declines were not unexpected.
Other analysts also believe that the NFT market has only faced a temporary decline and will soar as new projects are unveiled.
Messari Senior Research Analyst Mason Nystrom told Coindesk:
“It’s possible we’re experiencing a top in certain NFT categories like PFP [profile pics] or avatar NFTs. But it only takes one new and exciting project to help the market reach a new top.”
However, since many projects are similar, it will be difficult to ascertain what projects would revitalize the market.
In a conversation with Coindesk, Martha Zhang, founder of NFT platform StarryNift, said:
“The number of projects with similar ideas – such as those Loot copycats – has increased, but we are not seeing more new participants coming into the NFT sector.”
According to Opensea, the highest-selling NFTs were “Loot,” “CryptoPunks,” and “Bored Ape Yacht Club.” But recently, CryptoPunks’ daily sales fell by more than 90%.
Talking about the latest development in the NFT sector, Delphi’s Ong remarked that as the Ethereum blockchain gets crowded, some of the NFT projects are moving to layer 1 blockchains, such as Solana, which is currently dubbed as “Ethereum killer”.
This move could’ve resulted in slowing NFT growth on the Ethereum blockchain as well.
According to Dune Analytics, Opensea’s gas bill for the past 24 hours has exceeded 1560 Ether (about $ 5.47 million), suppressing various DeFi projects. Many layer 1 blockchains, such as Solana, offer faster and lower-cost transactions than Ethereum, making them attractive to the NFT market.