Bright spots in the NFT market

Bright spots in the NFT market

Nineteen-year-old digital art star FEWOCiOUS just sold a David Bowie NFT for six figures. [Image by Tyler Blint-Welsh]

There’s never a dull moment on the blockchain. Here’s what you need to know this week:

How the NFT market is navigating broader declines. From Meta’s latest non-fungible feature to the momentum of Solana NFTs. 

Noteworthy numbers. The price Elon Musk is now offering to purchase Twitter, and other key stats to know this week.

Around Coinbase. A new Coinbase documentary and more of the latest updates from us.

I WANT MY NFT

Corners of the NFT market are quietly defying the crypto market slump

Around this time last year, NFTs were rocketing toward peak pop-culture ubiquity, having notched a record $10.7 billion in sales in Q3 of 2021. This year, of course, has been a different story. Pressured by the same macroeconomic factors — inflation, the Fed’s rate hikes, the war in Ukraine — that have pummeled stocks and crypto, the NFT market has seen big declines too. Since January, NFT trading volume has dropped about 82% from $5.4 billion to $947 million in September. But it’s not all bad news! Let’s take a closer look at the latest developments.

Meta announced NFT functionality for Facebook and Instagram users in more than 100 countries, including the U.S.  

  • After enabling select artists and collectors to post their NFTs in May, Meta now allows users to connect supported digital wallets (including Coinbase Wallet) to their social media accounts, so they can share and crosspost NFTs on Facebook and IG feeds without any fees. 

  • One developer explained the feature’s appeal to Blockworks like this: “You could own lots of NFTs but the question is — how could I showcase it? At the end of the day, NFTs are about clout.” 

Disney, Starbucks, and Ticketmaster have also recently signaled investments in NFT tech. 

  • On Friday, Disney posted a job listing for a lawyer focusing on “NFTs, blockchain, metaverse, and decentralized finance” — the media giant’s latest web3 development since a July announcement that its accelerator program would focus on “the future of immersive experiences,” and select Polygon as a participant. 

  • Over the summer, Starbucks announced a customer-loyalty NFT platform, and Ticketmaster partnered with Dapper Labs to experiment with NFT tickets, offering some fans collectible digital memorabilia that serve as “proof of attendance.”

Solana NFT sales nearly doubled from August to September, gaining ground on the Ethereum-dominated space. 

  • SOL-based NFT sales jumped to $135 million last month, boosted by projects like y00ts and ABC. Per DappRadar, Magic Eden, the top Solana marketplace, saw $127 million of volume in September, compared to top NFT platform OpenSea’s $350 million — a potential sign that the NFT market is diversifying. 

  • In July, Magic Eden launched a gaming venture arm, betting that NFTs will eventually become crucial infrastructure for video games, despite backlash from some gamers. (Post-Merge, the energy usage for the mainly ETH-based market has been drastically reduced, addressing a common concern.)

Some NFT art collections are still garnering serious buzz and hefty bids, though the frenetic speculation has calmed significantly in 2022.  

  • Last week, Tyler Hobbs, the artist behind last year’s popular Fidenza project, dropped his new generative art collection called QQL, whose 900 modern art pieces quickly sold out for nearly $17 million, despite the market slump. 

  • On Monday, 19-year-old digital art wunderkind FEWOCiOUS sold his contribution to the David Bowie estate’s 15-piece “Bowie on the Blockchain” NFT collection for 96.5 ETH (about $130,000).

  • Meanwhile CryptoPunk #2924 (CryptoPunks are a “classic” NFT collection from 2017) just resold for a cool $4.5 million.

Why it matters… Although the NFT market has declined alongside, well, virtually every other market in 2022; investors, creators, and brands are still eyeing the potential of the technology now that the mania has subsided. From digital sports memorabilia to smart contracts that automatically pay artists royalties when their work is resold, the promise of NFT tech reaches across industries — even if some use cases are still a ways off. Describing the promise of NFTs in gaming, Magic Eden CEO Jack Lu told Decrypt his platform is “waiting for the most promising game studios to have time to build … and then work out what is the secret sauce of how to use NFTs.”

NUMBERS TO KNOW

$5 million

Total amount that investment giant Fidelity has raised since last week with its new Ethereum Index Fund, which offers institutional investors exposure to ETH via minimum investments of $50,000.

$1.26 million

Amount that Kim Kardashian agreed to pay in penalties to the U.S. Securities and Exchange Commision to settle allegations that she violated disclosure rules in her promotion of the EthereumMax cryptocurrency (which has no connection to Ethereum) on social media. Kardashian, who neither confirmed nor denied the accusations in her settlement, was said to have touted the coin without disclosing that she had been paid to do so.

$54.20

Price per share that Elon Musk is reportedly offering this week to purchase Twitter. If that amount sounds familiar, that’s because it’s the original offer price that Musk agreed to acquire the company for back in April. Since then, the Tesla CEO has engaged in a highly public effort to exit the deal — including accusations that he was misled about how many of Twitter’s users are actually bots — that was due to go to trial later this month. 

8%

Amount that Dogecoin jumped on Tuesday following the news that Elon Musk had made a new offer to buy Twitter. What’s the connection between these two events? Basically just that Musk has for years hyped the memecoin on Twitter — maybe ironically, maybe not — with his tweets tending to send the price of DOGE to the moon. But as Decrypt notes, a Musk acquisition of Twitter could have real upside for Dogecoin, given that the Tesla CEO has previously suggested DOGE could be added as a payment method on the social media platform.  

6%

Percentage of total crypto transactions in Sub-Saharan Africa that are on peer-to-peer (P2P) exchanges, the highest share of any region in the world. A recent report from Chainalysis on how crypto is serving residents’ everyday needs in Africa highlighted the “deep penetration and integration of cryptocurrency into everyday financial activity for many users” across the region. 

AROUND COINBASE

Coinbase documentary debuts, Cybersecurity awareness month, and the latest from Around the Block

  • Nearly three years ago, Coinbase began working with Emmy®-winning documentary filmmaker Greg Kohs on a movie about the company's story. The resulting film, COIN, will be released on October 7 and chronicles, as CEO Brian Armstrong put it, "the crazy ups and downs of building a tech startup all the way to us becoming a public company," while also helping to demystify crypto technology. You can watch the trailer here, as well as pre-purchase through platforms including iTunes and Amazon

  • As mentioned in Bytes a few weeks ago, Coinbase is supporting a challenge by six individuals (including two Coinbase employees) against the Treasury Department’s sanctions of open source software associated with Tornado Cash. On the latest episode of our Around the Block podcast, we speak with four of them about why they got involved in this legal challenge, and what they hope to accomplish.

  • As part of Cybersecurity Awareness Month, Coinbase’s Chief Information Security Officer, Jeff Lunglhofer, has published a blog post about our commitment to user safety. The piece includes information on Coinbase’s approach to continuous security innovation and providing a safe and secure platform for our users to participate in the crypto economy, as well as resources to learn more about how to stay safe.

TOKEN TRIVIA

What is Uniswap?

A

A centralized exchange

B

A decentralized exchange

C

A decentralized autonomous organization

D

Ethereum’s next upgrade

Find the answer below.

Trivia Answer

B

A decentralized exchange