The crypto sub-sector saw a reasonable boom last year. And it’s only increasing.
Ethereum and the rise of NFTs
The non-fungible token (NFT) market grew by leaps and bounds in the past year, seeing a brief growth in mid-2020 and a sudden rise in September. And now, there are over 630,000 such wallets that have been involved in some way in the sub-sector.
Alex Atallah, the CEO of NFT platform OpenSea, said in a tweet this morning, “There are now over 630,000 distinct wallets that have created NFTs or semi-fungible tokens (ERC721 or ERC1155).”
He compared the numbers to the internet’s rise in the late-90s, stating that at the time, only 23 blogs were “live” on the web in 1999, while six years later, that number expanded to over 50 million.
Non-fungible tokens are used to create verifiable digital scarcity, as well as digital ownership, and the possibility of asset interoperability across multiple platforms. They majorly find their applications in art, collectibles, and gaming, but can be used to prove the ownership of just about anything.
Gaming-related NFTs made their appearance after 2016, when Bitcoin-based trading cards, issued by projects like Age of Chains and Rare Pepes, made the rounds. Later on, the launch and popularity of Ethereum saw the NFT market grow further.
June 2017 saw the launch of the “punk” character trading platform CryptoPunk. Later that years in October, DADA.art was built from the CryptoPunks model and launched the first marketplace for rare digital art.
— CryptoPunks Bot (@cryptopunksbot) January 20, 2021
Most of the NFT market back then (and even now) focused on art. However, the launch of popular blockchain games like CryptoKitties, a cat-breeding and trading game, opened up the niche of in-game collectibles for blockchain games.
This was made possible as NFTs represented the ownership of in-game assets and were wholly controlled by the user instead of the game developer. This gave the holders true ownership of their in-game assets.
NFTs are based on Ethereum’s ERC-721 standard, which allows tokens to be issued in the same smart contract while remaining unique. This meant a single smart contract would containing tokens of varying value, each defined by their age, uniqueness, or rarity.
The niche has boomed so far. As CryptoSlate reported last December, Nifty Gateway, a leading NFT marketplace, oversaw the sale of an NFT to the tune of $777,777—an art collection created by digital artist “Beeple.”
— beeple (@beeple) December 13, 2020
Meanwhile, the relatively tiny NFT market continues to flourish. As per NFT tracker NonFungible, the past week saw over 15,000 NFTs sales that generated over $3.6 million in volume. Of that, the CryptoPunks platform saw the biggest revenue, overseeing $766,000 in trading volume.