Linked to the world of digital art and music, non-fungible tokens experienced massive growth that peaked in April this year, to later reduce activity.However, they have returned with greater force, now driven by projects. Axie Infinity and CryptoPunks, based on Ethereum.
Daily ERC-721 token transfers, the standard used to create collectible NFTs on Ethereum, are close to an all-time high, notes Coin Metrics in its most recent report on the state of the network.
NFT’s daily transfers had fallen nearly 14% after they hit an all-time high of 55,000 on July 21. However, on August 1, more than 53,000 operations were registered, that is, just 3% below the record, as shown by the graph of the data provider.
In the last two months the trading volume of collectible tokens has risen more than 300%, if one takes into account that on May 13, 13,000 transactions were recorded daily, and currently more than 50,000 transactions are processed per day.
The CryptoPunks project is responsible for the growth of NFT transfers on Ethereum. This has been in evidence in recent weeks, especially on July 30, when 104 of these collectible pixelated faces entered a single network block. It happened after a user bought them for $ 7 million, as seen through the Etherscan blockchain explorer.
As part of the effervescence that NFT trading is going through, the Three Arrows Capital investment fund bought 12 punks. A single buyer acquired another 88 of them for USD 5.5 million, while a collector’s token enthusiast, Gary Vaynerchuk, bought an ape, one of the rarest punks, for about $ 3.7 million.
Meanwhile, as demand for these NFTs has grown, prices have also risen. This is evident in the prices of the apes and zombies that are among the most expensive pieces of CryptoPunks, with a value above 32 ethers (ETH), about USD 98,240 according to the price of the cryptocurrency at the time of writing this note. Another of these tokenized faces is being offered for $ 90 million.
In the same style of the pixelated punks from the Larva Labs collection, the CovidPunks project was recently launched with 10,000 faces aware of the pandemic, since they all have masks. Users only needed a few minutes to exhaust the collection, which generated a lot of network congestion and with this, the prices of transaction fees rose, as detailed by analysts at Coin Metrics.
Along with CryptoPunks, the Axie Infinity project is also responsible for the high volume of NFT trading in the last three months. In fact, your own Tokenized digital pet market is the second with the highest volume trading after Opensea, which leads Dappradar’s list of 33 of these platforms.
But nevertheless, Opensea beats Axie Infinity by a slim margin, with a sales volume above USD 1,700 million against USD 1,200 million registered by Axie. Although it is to be considered that the first is a market that any user who wishes to sell an NFT of any type can go to, while the second is exclusively for the sale of pets and lands of the metaverse of the game.
In Axie Infinity each pet is a unique NFT with several associated characteristics that will determine its performance in battle or in other areas of the game. Additionally, there are the tokens that represent the parcels of land within this universe of digital pets.
These digital lands can be acquired by the participants to develop structures on them with special characteristics. Under this formula, each user has the possibility of owning a part of the land that defines Axie Infinity in the virtual world.
In any case, if Axie Infinity has 1 million active users per day, and each of them requires three digital pets to participate in the game, then it is possible to imagine the magnitude of the demand for new NFTs in this economy that revolves around to this project.
NFTs: a difficult to contain tsunami
With increased demand and with dozens of new projects emerging, the volume of trade in NFTs is growing with such magnitude that it is becoming a kind of gigantic tsunami that is flooding the Ethereum network.
In fact, in its Coin Metrics report, it makes the observation that several project launches with NFT caused temporary network congestion and consequently the price of transaction fees was raised on August 5.
As reported by CriptoNoticias, it was precisely on August 5 when the hard fork occurred (hard fork) London in Ethereum, with which the long-awaited EIP-1559 improvement proposal was incorporated that seeks to reduce the high cost of network commissions which will end up benefiting all those who transfer NFT.