The Otherside of NFTs

The NFT space does certainly seem lively again! As Art Blocks and Pudgy Penguins make a comeback, we’re also seeing a new wave of projects with rather interesting narratives. With new projects looking to make a name for themselves and old projects experiencing quite the revival, there’s much to unpack here as we take a look into the NFT market for the past week.

Top Marketplaces of the Week

Source: DappRadar; Snapshot taken 18 July 2022

Over the past week, OpenSea has reclaimed its throne by a long shot, amassing a weekly volume of close to $120M. Just a few weeks ago, other NFT marketplaces like Magic Eden and X2Y2 seemed like they were poised to reign supreme; however things are not looking too pretty now. Both these marketplaces are pulling in just $15M worth of trading volume each in the past 7 days, barely 13% of OpenSea’s total volume. And to make matters worse, the quiet resurgence of the CryptoPunks have generated over $27M in trading volume on its native marketplace, almost equivalent to Magic Eden and X2Y2’s volume combined.

While it may be too soon to say who might come out on top, we can definitely say that it will be a continuous battle to become the top marketplace. Even as competitors such as X2Y2 and LooksRare offer lower fees and token incentives for listing and trading NFTs on their platform, it may be difficult to retain these users once the rewards run dry. However, OpenSea shouldn’t be sitting too comfy yet, as there is always the constant threat of newer and more innovative NFT marketplaces ready to eat more of OpenSea’s lunch, with one such contender emerging as recently as last Monday…

Can’t stop, won’t stop - GameStop

Within just a week from its ruthless announcement of aggressive staff cuts, the meme stock giant soldiered on against the headwind of crypto winter with the launch of its own NFT marketplace. The new marketplace is part of GameStop’s extensive business strategy in pivoting into becoming a tech company, with blockchain and NFT of course being some of the top priorities. After months of pent-up longing from its supporters, GameStop’s NFT marketplace (which is built on Loopring, an Ethereum L2 network) marched strongly into the scene to the tune of $2 million volume on the first day, netting a grand total of…$45,000 in fees earned. For context, GameStop takes a cut of 2.25% for all transactions on its platform. By contrast, OpenSea’s fee is a tad bit higher at 2.5%, whereas the likes of LooksRare and MagicEden charge only 2%. 

While the fee earned may not seem like alot (it’s not), especially when considering its meager size compared to its $16.5 million daily sales, GameStop’s NFT marketplace put up a more than respectable performance against the NFT bear. Led by the heroics of MetaBoy and other GameStop-exclusive collections, the new marketplace managed to generate ~$6.7 million in 7D volume despite a slowdown in the latter days - good enough for a #6 spot right behind its veteran competitor, LooksRare. GameStop’s first week volume is almost double that of Coinbase’s ALL TIME NFT trading volume (~$3.5M), and even more when compared to the NFT marketplaces of FTX and Crypto.com. Buoyed by the successful launch of its NFT marketplace and upcoming stock split, Gamestop’s stock, GME also jumped by 11% since Monday last week.   

GameStop NFT probably fared as well as one could hope right in the midst of a slumping market. This only makes us wonder how much they would have done back in the heyday of NFT earlier this year, back when OpenSea was raking in more than 10x its current volume. Its ongoing $100 million grant program in partnership with ImmutableX tells us where GameStop has its sights set on. If L2s such as ImmutableX and Loopring take off, one can also imagine GameStop also establishing early-mover advantage and presence within these up-and-coming ecosystems. Now that NFT is showing signs of life once again, perhaps GameStop can start benefiting from taking a larger share of the market.

Top Collections of the Week

Source: OpenSea; Snapshot taken 18 July 2022

There has been a surprising resurgence in demand for CryptoPunks, thanks to improving market conditions for crypto in the past week, as well as a high-profile purchase of an incredibly rare Punk. One out of only 24 Ape Punks, CryptoPunk #4464 was sold for a staggering 2,500 ETH, or approximately $2.6M. The broader floor price saw a marked increase of 30% to 83 ETH, amidst an impressive week for ETH and BTC. Yet, the party doesn’t end there as several other rare ‘Hoodied’ Punks have found new owners for approximately 300 ETH (~$450k), not a small sum in this current market environment.

👀 0x32cc..7bb5 ↗️ flipped ↗️ CRYPTOPUNK #6137https://t.co/dug3tSvae2

🏆 status: Diamond Hands
🛒 in: 7.77 ETH
💰 out: 350.13 ETH
😬 hodl: 1 year 9 months 5 days

Ξ profit: +342.36 ETH 🔥

💲paid: $2,727 (10/2020)
💲made: $472,049 (📈 +17,310%) pic.twitter.com/PKO9CNT0fV

— Flip McBot (@nftsalesbot) July 17, 2022

However, the major highlight of last week centered around the infamous Bored Apes as the Otherside’s First Trip tech demo was held, providing an early glimpse into Yuga Labs’ metaverse. Over 4,500 Otherdeeds holders participated in the event on Jul 16, 2022, using virtual avatars that looked like they came from the Tron:Legacy movie. Players were invited to explore the ‘Biogenic Swamp’ which is the central hub of the Otherside universe, and other selected locations to test out their avatar and interact with their 3D environment.

Otherside First Trip (Source: M1Cyborg)

Although Yuga Labs has more ‘trips’ lined up exclusively for Otherdeed holders, it seems that the ‘First Trip’ was a smashing success … at least, based off the community’s reactions. Yet, from a price perspective, the reactions were a little more lackluster. While the Otherdeeds land plots (required to access the Otherside metaverse), have seen an uptick just three weeks ago, floor prices have seen little movement since then. Even after the events conclusion, floor price for Otherdeed lands have remained  fairly stable along with the Bored Apes and Mutant Apes projects. Perhaps this initial test is still way too early to convert the many skeptics of the broader NFT space into the Bored Ape clan. As more demos are released in the coming future, we might just see more NFT enthusiasts who are willing to pay to reach the Otherside.

Otherdeeds daily floor price (Source: CoinGecko)

Art Blocks Renaissance

In other news, Art Blocks continues to enjoy its renaissance, with Fidenzas and the latest curated collection, Running Moon, in the top 15 collections of the week. Overall, the various curated collections of Art Blocks generated over 4,470 ETH in trading volume, approximately $6.2M at today’s prices. However, a new challenger is climbing through the ranks and quickly making waves across the NFT scene. 

Gm.studio, a platform hosting generative works of art from various artists, is gaining popularity after its most recent collection, Factura, was launched just a few days ago. The collection features 999 generative art NFTs, which ballooned from an initial floor price of 1 ETH to just just over 4 ETH in a matter of days, thanks to some crypto influencers, who may (or may not) have likened it to being ‘the next Fidenzas’.

Subsequently, the other projects from gm.studio, including their gmDAO governance NFT, saw a surge in activity. Collectors were quick to sweep through the three previously launched collections, propelling floor prices by 2-3 times. Some of these collections, such as Koripo by Rich Poole and Plasticity by p4stoboy even reached their all-time highs in terms of ETH.

Although we are unsure of how long this trend will continue, it is quite clear that the excitement for generative art is still very much alive, and we are pretty sure that most NFT enthusiasts are now aware and highly anticipating the next NFT drop from the platform.

A step in the right direction?

APE Realm to go live at 10am UTC 18th July
Genesis/OG/Enhancement APE Shoebox will airdrop to eligible users’ spending accounts
Once APE Realm's live, pl note:
1️⃣ Sneaker Enhancement requires m>=2 instead of m>=3 Sneakers
2️⃣ All Realms’ Minting cooldown goes from 72 hrs to 48 hrs

— STEPN | Public Beta Phase IV (@Stepnofficial) July 17, 2022

STEPN ran hand-in-hand with BAYC into the spotlight this week, with Ape Realm officially going live as of 18 July. The move-to-earn game’s venture into Ethereum marks its third foray into a new ecosystem, with SOL Realm and BNB Realm being the first two. Within just minutes of going live on OpenSea, throngs of bids and sales poured in for STEPN Shoeboxes, with floor price shooting up as high as 3 ETH at one point in time. Even with just a day of sales, STEPN Shoeboxes managed to cement a spot in OpenSea’s Top 10 7D volume chart. The initial redhot demand has cooled down since then, with floor price having dipped to ~1.6 ETH at time of writing, which is still an impressive showing for a free-mint (albeit only exclusive to BAYC holders). 

By its own admission, Ape Realm is STEPN’s attempt to woo and rope in the largest NFT community. Leveraging BAYC’s influence could prove to be useful in establishing a presence within Ethereum, a huge onramp opportunity for millions of users. STEPN’s issuance of free-mints to BAYC holders is their grand plan of aligning interests between the two parties, and Apes transforming into players is the best endorsement that STEPN could get, one that could easily snowball into an avalanche of word-of-mouth organic marketing. But this could only work if the OG Apes HODL onto their sneakers and actually start playing the game. Paperhanding STEPN Sneakers is counterproductive to STEPN’s long term plan of converting the BAYC community into players and by extension, endorsers.

Source: Nansen

According to Nansen, ~30% of the 2,108 Ape Real OG Shoebox still reside with the original BAYC owners. In many cases, market movers are usually just a select few thought leaders so with this in mind, the number presented isn’t all that bad. As the old adage goes, quality over quantity. So out of the remaining sneaker owners, whom does STEPN have standing in its corner?

Source: Nansen

According to Nansen, only 11 out of all remaining owners are considered as “Smart Money”, prolific traders with a proven track record of trading. Gigabrain influencer types (think @Zeneca_33 or @mevcollector) with known wallet addresses are also commonly grouped under this umbrella. Unfortunately for STEPN, the list of BAYC celebrity owners such as Stephen Curry, Post Malone and Jimmy Fallon (which are name-dropped in STEPN’s Medium announcement) are also noticeably without any STEPN sneakers. Also do note that there are only 2,108 Shoeboxes minted so far, out of a possible 10,000 BAYC wallets on top of eligible existing STEPN users as well. Of course, this alone doesn’t spell disaster for STEPN but it is worth noting that their scheme to engage and ultimately convert the BAYC community isn’t exactly going according to plan.

Source: CoinGecko

Source: CoinGecko

Meanwhile, STEPN sneaker prices on Magic Eden have plummeted to <1 SOL, GST price on Solana has been sliding, and although GMT has made a mini run-up (~12%), it still underperformed against major coins such as ETH, BTC and SOL. While STEPN’s latest reported Q2 quarterly profit of $122.5 million is certainly impressive, the Daily Active User (DAU) count has started to dwindle from its April / May 2022 peak. 

STEPN Solana DAU*
Source: Dune Analytics (@nguyentoan)

STEPN BNB DAU*
Source: Dune Analytics (@gankthisway)

*Note: STEPN DAU figures are from different sources that query a different set of data.  These data also differ from official numbers reported by STEPN themselves, likely due to differences in accounting for “active users”.

Dune Analytics shows that the move-to-earn pioneer is averaging <25k DAUs (Solana + BNB) in recent days, a far cry from when it was close to cracking 100k players on a daily basis back in May. Although, STEPN claimed to have >800k DAU in around the same time frame, a figure which is likely taking into account off-chain activities that are tracked on their app. Regardless, it does seem like the player base of STEPN is not what it once was. Yes, its massive quarterly earnings are good for extending its runway into the foreseeable future, and its recent announcement of GMT buyback & burn scheme could help keep the price of the token afloat to retain users, but all signs still point to the game slowly fading into irrelevance. Not to mention the many up-and-coming competitors such as Genopets and Sweatcoin which are gaining steam. Could Ape Realm revitalize STEPN? The Apes aren’t biting (or running) based on what we’ve seen from their quick mint-and-dump, but perhaps Ethereum’s massive user base might just be enough to usher in a wave of renewed interest. This however remains to be seen.

This article was written in collaboration with Win Win. You can follow him on Twitter at @0x5uff3r.