Museum of Pain

Market conditions have been brutal, with even the most hardened of optimists loosening their grasp on hopium over the past week. Not so long ago, NFTs were observed to be a potential derisking avenue back in just Q1 this year. Unfortunately this is no longer the case. 

Museum of Pain

Source: CryptoSlam

The NFT market was not spared from the bloodbath this week, with most networks recording much lower cumulative sales over the past seven days. Some such as Flow weathered the storm much better than others, but with the NBA Finals gearing towards its end next Monday this Friday, interests in NBA TopShot should start to fade as the offseason rolls around. 

BNB Chain, which previously soared in volume traded thanks (or no thanks) to the Chinese clampdown on STEPN, finally cooled down again once the rush to sell off STEPN sneakers ahead of the ban (15 June) finally dwindled. The 1-2 punch from this and the hobbling market dealt a staggering 53% drop in sales volume to BNB Chain, making it one of the biggest victims of this week.

Surprisingly though, Polygon defied expectations and logic to notch a positive week (+15%). While there weren't any notable events within the Polygon NFT space in the past week, there has been a notable increase in 7d volume for Decentral Games ICE Poker NFTs (+70%). Is this a spillover effect of the $1 million grant announcement from Decentraland late last month? Or is the result of crypto traders being lured by the prospect of quick wealth and fortune in these trying times? 

X2Y2 Goes Exponential

All eyes were on Magic Eden vs. OpenSea in the past few weeks as they tussled for the #1 spot on the NFT marketplace leaderboard. MagicEden may have won a couple of daily battles on the count of Trippin’ Ape Tribe, but OpenSea was still triumphant in the overall war.

Source: DappRadar

While everyone was focused on Magic Eden and OpenSea, someone came along and took the crown from OpenSea after all - just not from outside the Ethereum ecosystem like we had suspected. In a shocking twist, X2Y2 (X2Y2) swooped in to snatch the top position from right under OpenSea’s and Magic Eden’s noses, planting itself as the leading marketplace for the week by volume.

There were already signs that X2Y2 was on the rise but its sudden surge to overtake OpenSea’s volume came as a surprise. Word got around quickly that not only was X2Y2 taking a much lower cut of trading fees (0.5% vs. 2.5% on OpenSea), but 100% of the fee rebate would even be reimbursed in X2Y2. X2Y2’s fee structure isn’t new, but at a time when the market is trending downwards and with a great recession on the horizon, there seems to be renewed interest in its rebate program. Anything to help soothe the aches of realized losses right? 

The NFT space buzzed with activities as traders and collectors alike rushed to liquidate their JPEGs in this bear market, with top marketplaces OpenSea and Magic Eden registering significant upticks in transaction count in the past 7 days, despite the fall in total volume traded. 

Source: DappRadar

Oddly enough, X2Y2 was the complete opposite and saw a drop in user count and number of transactions in the past week despite leading in total volume traded. The high-volume-low-transaction-count phenomenon on X2Y2 coincided with the rise of expensive blue-chip NFTs to reclaim the top spots from Goblintown and the swarm of free-mint collections (more on this later).

State of the market - Apes back on top🙈🙉🙊

🥇.@BoredApeYC - BAYC 2.75k
🥈.@BoredApeYC - MAYC 1.23k
🥉.@OthersideMeta - 1.19k

Notables
🏅.@moonbirds - 984.6

Natural order of things is back w/ Apes, so Bull's coming back right?#nftcommunity #nftnews #bringbackthebull #NFT

— X2Y2 ⭕️ NFT Marketplace (@the_x2y2) June 13, 2022

It would seem that NFT whales are currently favoring X2Y2 as the go-to marketplace for their high-ticket trades, which barely comes as a surprise especially when they are the ones who stand to profit most from the rebates that X2Y2 offers.

Source: Dune (@rchen8)

It certainly doesn’t help that OpenSea is also now on pace to register the lowest monthly volume since July last year - just before the advent of NFT summer. We’re almost halfway through the month and yet OpenSea is only sitting at $372M in cumulative monthly volume. At the current rate, it will end up just shy of $800M by the end of the month. For context, the lowest recorded month since July last year was in November ($2.1B), which is more than four times the projected volume for this month. A large part of this can be chalked up to a slumping ETH price which translates to lower volume traded in USD. As mentioned earlier, transaction and user count for OpenSea for the large part have held up relatively well. 

Top Collections of the Week

Source: OpenSea; Snapshot taken 13 June 2022

Step aside Goblins, the apes are back on top…sort of.  

Blue chip collections such as Otherdeeds, MAYC, Clone X, CryptoPunks, and Moonbirds in general swelled in volume over the last week, buoyed by the typical flurry of trades that ensue during another crypto market slump as investors rush to dump NFTs for liquidity. That being said, how are the floor prices holding up? 

Source: CoinGecko

Not well. Not well at all. Like all its other crypto brethrens, NFTs are also drowned in a sea of red, with collections on average dropping ~20-30% in floor price over the past week. This coupled with a sinking ETH price presents a double-whammy for NFTs, which means that NFT (bag) hodlers are affected twice as much by the market collapse in dollar terms. BAYC, which is unquestionably the face of NFTs, has dipped below $100,000 in floor price for the first time since late August last year, which marks a >77% dip since its ATH at ~$420k just slightly over a month ago.

Source: SolanaFloor

The same collapse can also be seen for leading Solana NFTs, with their floor price in SOL also collectively dipped ~24% within the same period of time. A combination of falling floor and SOL price means that Solana NFTs, just like Ethereum ones, are even worse off in dollar terms (-45%).

Goblintown, which dominated the NFT ranking in the past weeks, experienced a milder decline in floor price compared to the Ethereum blue chips, but the -75% drop in volume traded suggests that interest in the no-utility, no-roadmap meme collection is slowly waning in the face of dire macroeconomic forces. The same goes for fellow free-to-mint collection We Are All Going To Die, which also saw both its floor price and volume tumbling over the past 7 days. 

Is this the end of free-to-mint NFT memes then? Fortunately or unfortunately, not yet. ShitBeast, acting like the shining beacon of hope for the NFT space that it is, not only surged in volume but at the time of writing, its floor price has actually appreciated against all odds to 0.81 ETH from ~0.6 ETH last week. Last week’s focus may have been on ShitBeast’s predecessor “ill poop it nft” but since then, a total of 7,791 out of 10,000 ill poop it nft have been burned to mint Shitbeast and $SHIT to this date, channeling a bulk of the volume and attention to its progeny instead.

Solana on the other hand continues the tradition of rotating collections into the Top 15, this time featuring a new collection that dropped on 7 June, JustApe. While Magic Eden and Solana are no doubt putting up a strong fight against OpenSea X2Y2 and Ethereum in the NFT market, they have yet to produce a true blue chip contender that can be likened to the Apes and Punks of Ethereum. Solana NFT traders in general seem to have a much shorter attention span, with “flavor of the week” collections pumping and fading just as quickly. The lower barrier of entry into the Solana ecosystem increases the accessibility of NFTs for retail traders, and that also includes a flock of flippers who are purely motivated by profits. While there are notable collections that look like they may yet break into the blue chip category (e.g. Okay Bears, DeGods), it is apparent that they have yet to garner the level of prestige and attention that the likes of Apes and Punks have. For now, it seems that Solana NFT activities are propped up by short term trades and flips. Longevity and sustainability call for a different approach, one that will draw the esteem of curators and collectors to hodl.

What Price for Your Name.eth

Source: Dune (@makoto)

Last month, ENS saw a record-breaking month which saw the highest number of .eth domains registered, topping out at 365,652 in total.

Source: OpenSea

The rise in ENS domain registration could be attributed to the emergence of the exclusive “10k club”, reserved only for the domain owners of 0-9999.eth. In fact, 555.eth was (poetically) sold for 55.5 ETH at 5.55am in late April this year, making it one of the most expensive ENS domains ever sold. At time of writing, these numeric ENS domains are being sold for a minimum of ~0.6 ETH, with auspicious/meaningful numbers such as 888.eth potentially fetching an even higher price. 

Source: OpenSea

The sudden ascent of the 10k club generated frenzied interest for the next “big thing”, with users registering domain names in the hopes of emulating the success of the 10k club domains. A quick look at the sale history of ENS domains shows a slew of transactions for ENS domains of the “Chinese 10k club” as well as the “20k club”. 

Source: OpenSea

Interestingly, these 10k club copycats have resulted in a new wave of interest for ENS domains, with daily trading volume rising significantly to the ~300 ETH region. In fact, ENS domains have consistently been a Top 5 gas guzzler according to Etherscan, which reaffirms the eye-test that there has been constant strong interest in ENS domains. 

Source: Etherscan

Interests in ENS domains also naturally spilled-over to its token, ENS. Shortly after the conception of the 10k club, ENS token price shot up to as high as $26.17 in early May. Just as quickly, the token price plummeted back down below $8.00 within a week but the momentum in ENS domain registration didn’t let up in May. At time of writing, ENS is trading at a price of ~$8.09.

Source: CoinGecko

This phenomenon however does not seem to extend to other NFT domains. Unstoppable Domains for instance, which offers 10x more domain ending options than ENS including .crypto, .wallet, .nft and more, is a far cry from ENS when it comes to interest. A total of ~319k domains have been registered with Unstoppable Domains to date vs. ~1.3M with ENS.

Source: OpenSea

For further contrast, the all-time volume for Unstoppable Domains is only 1,241 ETH, less than 4% of ENS domain’s. Its latest 7 day volume is 0.7 ETH, which averages out to merely ~0.1 ETH per day. That said, Unstoppable Domains does seem to perform better when not going head-to-head against ENS on Ethereum as seen by the total number of domains registered with them on Polygon (737k), even though the secondary market for these is pretty much non-existent. 

Turning our lens onto Solana Name Services, which offers arguably the second most popular domain .sol, is performing relatively better than Unstoppable Domains. At a glance, the secondary market for .sol domains is relatively lively at ~$1,500-$2,000 in daily volume within the past week, boasting ~170k in total domains to-date. Its all-time top sale of 💎.sol commanded $60k in price, a very respectable amount even when compared to ENS’ own top sales.

All in all, ENS is still seated comfortably at the top as the king of NFT domains in all metrics, even when compared against competitors within and outside of the Ethereum ecosystem.